There is a mountain of evidence that purposeful businesses – those that understand and articulate a purpose above and beyond maximising shareholder value – are more successful.
As far back as 2015, Harvard Business School released a report entitled, “The Business Case for Purpose“, which found that companies where purpose was articulated and clearly understood saw revenue growth almost 50% greater than those that did not.
Or look at Havas Media’s Meaningful Brands report. In the 2017 edition, they reported that purposeful brands have outperformed the stock market by 206% over the last 10 years.
Or look at this report on the ‘New Conscience of Wall Street’, including this quote from Larry Fink, the founder, chairman and CEO of BlackRock, the world’s largest asset management fund.
“Purpose unifies employees, helps companies see their customers’ needs more clearly, and drives better long-term decision-making.”
We’ve reached a point where the singular pursuit of profit is unlikely to be the best way of running a business. Where an understanding that the pressures of quarterly reports to the stock market create a short-termism that can derail companies and force bad decisions.
Or, to put it another way, moving away from trying to solely maximise shareholder value might be the best way in the long term to achieve exactly that.