When capitalism reforms

It was way back in the last century when economist Milton Friedman, declared that the social responsibility of business was to make a profit. Each business had to demonstrate to its shareholders that it could grow – faster and faster every quarter. There was no strategy for people or planet, only for profit.  Leaders became so wrapped up and distracted in going harder, faster and stronger, that they forgot and overlooked their reliance on a healthy planet and happy people.

Thankfully, times are changing. Gradually, capitalism is being reformed from a system where shareholders are the only stakeholders to one where, in Joe Biden’s words, companies “have responsibility to their workers, their community, to their country.”

I’ve worked in responsible business for nearly two decades. And over that time, I’ve seen the change in business as leaders recognise that their businesses aren’t just providers of goods and services, but organisations that have a vital role to play in solving humanity’s greatest challenges.

And people want that too. I recently read that 81% of people believe that businesses should improve society. And two-thirds (65 percent) of CEOs said that the public is looking to businesses to fill the void on societal challenges.

This is important stuff. There’s an expectation that brands stand for something more meaningful and leaders are doing something about it. 57% say they have increased their focus on brand purpose compared to three years ago and 64% feel purpose is critical to everything they do. Not just important. Critical.

The brands that do this enjoy effortless loyalty from their customers, employees and others. Brands like Pukka Herbs, Lily’s Kitchen, IKEA and hundreds more. These brands know that people don’t buy to give a brand a greater profit margin. They buy because they believe in what that brand stands for.

This is how brands lead with purpose. The era where strong financials are the only predictor of success has gone. In this new world where capitalism considers happy people and a healthy planet, profits are the result of doing other things really well – like fighting for the environment, paying farmers fairly and standing up for equality.

Victoria Page is a corporate purpose leader and brand strategist who works with leaders to put purpose into practice. For more information on how to accelerate your purpose journey, head over to www.victoriapagecomms.com or email victoria@victoriapagecomms.com