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Weekly Short
18 February, 2022
Corporate purpose. There’s a lot of it about, not all of it good. We weren’t on Terry Smith’s side recently when he took Unilever to task for putting sustainability ahead of performance, but we did share his view that mayonnaise doesn’t necessarily need a purpose.
But purpose as a guide for a principled course for business? Absolutely. Done well, it gives a business a reason for being that can help make decisions at all levels of the business that balance short-term profits against other imperatives. Deep Purpose is a new book from Harvard Business School Professor Ranjay Gulati that looks at the ways in which purpose done well (“deep purpose”, defined as “an existential statement that expresses the firm’s very reason for being”) can support successful, sustainable growth that empowers employees and allows good decisions to proliferate.
Along the way, he takes a look at what purpose done poorly looks like – “purpose-on-the-periphery” would apply to many so-called purpose driven companies, where the division between doing good and making profit is clearly drawn or the even more problematic “purpose as win-win” where only those socially valuable projects that also generate financial returns are prioritised. And like any business book, there’s an abundance of case studies from Microsoft to Etsy and an in-depth look at the difficult trade offs that need to be made when you balance the needs of all stakeholders. Purpose isn’t about being nice, it’s about finding the right way forward – the case of urban farming company Gotham Greens’ pursuit then abandonment of sustainable packaging in favour of single use plastic is an illuminating example of how sometimes the purpose-driven decision isn’t the obvious one.
If you’re a purpose cynic, you won’t necessarily be persuaded by this book. But if purpose is an operating system, it requires a manual. If your purpose needs some maintenance, or you’re wondering how to get it up and running for the first time, then this is the book for you.
By Claire Jost