A License to Operate: Does Your Business Deserve to Exist?
It was about 15 years ago when I first began to work on ‘purpose’ and understand its value; way before ESG became trendy.
Today, the value of being clear about your company’s purpose is more important than ever. And I have to be honest, being really clear about your purpose isn’t always easy.
The world as we know it is facing unprecedented challenges. The climate and ecological crisis, social inequality, and economic disparities are wreaking havoc on people and communities.
In the UK alone, poverty rates remain stubbornly high, with over 14 million people, including 4 million children, living in poverty. When it comes to the environment, global climate scientists agree we are facing a catastrophic future without radical and urgent climate action and adaptation. We’re approaching tipping points which may cause irreversible damage to our life-giving systems. Read this powerful recent update from Johan Rockstrom, Swedish scientist, internationally recognized for his work on global sustainability issues.
Globally, wealth inequality continues to rise, with the richest 1% owning more wealth than the rest of the world combined.
As a business leader, it's time to ask yourself a crucial question: What is the true purpose of your business? In a world where the challenges are so profound, can any business justify its existence if it's not actively working towards a positive impact on people, communities, and our planet?
Why Purpose Matters More Than Ever
In today's rapidly changing world, the traditional approach to business—prioritising profits over everything else—is becoming obsolete. The public is demanding more from businesses, and the numbers back it up. A recent survey from B Lab UK reveals that 76% of the UK public believes that businesses should have a legal responsibility to prioritise people and the planet alongside making a profit. Consumers, employees, and investors are no longer satisfied with businesses that extract value without giving back. They want to engage with companies they can trust—businesses that have a clear purpose.
B Lab UK image illustrating how B Corps outperform
Purpose-Driven Companies Outperform
The B Corp movement exemplifies how businesses with a clear purpose not only do good but also perform better. Compared to other SMEs, B Corp-certified businesses in the UK show faster annual growth in turnover (26% vs 5%), higher employee retention rates (8% vs 16-20%), and greater levels of community engagement (93% vs 50%).
Five Steps to Understanding Your Purpose
If you're unsure of your company's purpose, you're not alone. Discovering and articulating your purpose is a journey, but it's one that can pay dividends in the long run. Here are five steps to help you get started:
Start with Why
Simon Sinek's famous TED Talk reminds us that understanding why your business exists is the foundation of everything else.
What is the driving force behind your company?
What problem are you solving, and why does it matter?
Identifying your "why" will help align your business decisions with your greater mission.
Engage with Stakeholders
Your purpose isn’t just about what you want—it's about how your business impacts everyone it touches. Engage with your employees, customers, suppliers, and communities to understand what matters to them and how your business can make a positive difference, and what, if any, may be the negative impacts of your business on your stakeholders.
Look at Your Impact
Assess your business's current social and environmental impact. Use tools like the B Impact Assessment, which evaluates your company's governance, ethics, and transparency, to gauge how well you’re aligning with your purpose. This assessment will help you identify areas for improvement and ensure your business structure supports your mission.
Incorporate Purpose into Governance
Governance is key to embedding purpose into your business. The B Impact Assessment considers mission/purpose and engagement as fundamental to governing a business that acts as a force for good. Make sure your governance structures reflect your commitment to social and environmental impact, not just financial returns.
Communicate Your Purpose
Once you’ve identified your purpose, make sure it’s communicated clearly, both internally and externally. Your purpose should guide decision-making at every level of the business and be a core part of your brand identity.
Purpose Makes Business Decisions Easier and More Authentic
When you have a clear purpose, decision-making becomes easier. Every choice you make as a leader should align with your purpose. This alignment creates authenticity and trust, which in turn fosters stronger relationships with your customers, employees, and partners. Purpose-driven companies like Elvis & Kresse, which rescues and transforms waste materials into luxury products, and Boughey Distribution, which has embedded sustainability into its logistics operations, are shining examples of how purpose can drive both positive impact and financial success.
UK Businesses Leading the Way
Several UK businesses are setting the standard for purpose-driven leadership. Ration L, a sustainable fashion brand, focuses on creating positive change through responsible consumption. Brabners, a UK law firm, has embraced purpose by prioritizing social and environmental responsibility in its legal practice, demonstrating that even traditional industries can lead with purpose.
The B Corp Advantage: Purpose and Outperformance
B Corp certification has become a benchmark for purpose-driven businesses. B Corp SMEs in the UK outperform other businesses in key areas, such as growth, employee engagement, and community impact. They are also more successful in securing equity finance, with 70% of B Corps securing all or more of the funding they seek, compared to 56% of other SMEs
Conclusion: Act with Urgency, Lead with Purpose
The challenges our world faces are immense, and businesses have a unique opportunity and responsibility to be part of the solution.
By leading with purpose, you can create a positive impact on people, communities, and our planet.
The time to act is now—before the license to operate without purpose is revoked by the changing expectations of society.
Are you ready to lead your business as a genuine force for good?