Profit or purpose? Businesses can no longer afford to choose
Navina Barlett, Virgin StartUp Ambassador & founder and Boss Lady, Coconut Chilli, talks to Business Leader about the ‘whys’ of business and how purpose can trump profit when it comes to business growth.
What does your business stand for? Perhaps a more accurate question would be – why do you run the business you do?
Running a business can be tough. The long nights, crappy pay (at least in the beginning), and constant pressure can all take their toll, but only if you stop to think about the ‘why’.
Coconut Chilli started out of a desire to change the way the food industry operates at scale The drive for profits and efficiencies in the global food supply chain means ‘food fraud’ is taking place on a daily basis and workers are being exploited.
My true passion is using Coconut Chilli to challenge conventional food manufacturing and as a vehicle for change in a bid to create sustainable food systems around the world. That’s my ‘why’.
It’s so ingrained into the company culture that we’re eschewing the traditional route of scaling a food startup and selling online directly to office-based customers. The plan is to grow as a B-Corp – a for-profit business that has social and/or environmental outcomes as part of its mission.
At startup companies like mine, we’re all about the ‘why’ as opposed to the ‘what’ – wanting to make the world a better place, changing people’s lives through technology, or in my case, revolutionising the food industry. Whatever yours is, it’s a more powerful tool than perhaps you realise when it comes to attracting and, crucially, retaining customers.
Eighteen months ago, the head of Unilever admitted that the brands in its portfolio that had a purpose were growing twice as fast as those that didn’t. In an age where discount promotions have become the norm, brands and businesses can no longer expect to grow if they compete on price alone.
Take Dove as an example, now seen as a champion for ‘real women’ or Ben & Jerry’s the fair trade ice cream company. These brands do well because customers feel they know what they stand for and that by choosing to buy their products, consumers are serving a higher moral purpose of their own.
Millennials as a generation are the most likely to be motivated by outcomes other than money, and with their buying power set to grow quickly over the next decade – to the tune of an estimated $41 trillion in transferred wealth – it’s a strong message for brands to tap into. By aligning profit goals with a strategy that best communicates your company purpose, consumer trust will soon translate into money in the bank.
Billionaire philanthropist & Virgin Start Up founder Sir Richard Branson believes the companies who will thrive in the future are those with ‘purpose before profit’. This is something I wholeheartedly agree with, but it’s the philanthropists or investors with a social conscience, backing the businesses who know why they exist, that will be the ones who ultimately kick-start the pace of change.
There’s now a moral and a business case when it comes to putting purpose ahead of profit – so the question is no longer how can you do both, but rather why wouldn’t you?