The growing trend of purpose-driven businesses and their societal impact

In today’s business world, it is important to understand and foster purpose-driven leadership. Customers and clients expect more from companies than they ever have before. This means companies are under regular scrutiny when it comes to their guiding principles and goals and the effect they have on society and the environment.

Figuring out ways to be socially and environmentally responsible while making an acceptable profit can create challenges, but many companies are realizing that after an initial period of change, they can actually increase their business and even profits by making smart choices.

Defining purpose-driven leadership 

Purpose-driven leadership is based on aligning your goals with a purpose that benefits more than just the company itself. This could mean reducing waste within your company, which increases profits but also has a significant positive environmental impact. Purpose-driven leaders can have a lasting impact on all aspects of society. Ehsan Bayat is a great example of a business leader that has helped develop businesses that improved communications and access to energy for an entire country by making ethical and value-driven decisions.

Personal values create a more cohesive work environment and foster innovation

Companies that encourage strong personal values and sharing tend to have a better team environment. When employees are working towards a higher purpose and feel good about what they are doing and the impact they are having on the world, they perform better. A comfortable work environment with a higher purpose also encourages innovation. When everyone feels valued within a company, they are more likely to share their ideas and discuss any issues that may arise, which helps reduce conflict.

Transparency is expected

Customers and clients expect companies to be open about their policies and practices. This often includes having a mission statement and environment impact statement. Customers want to know how materials are sourced for the manufacture of goods. Labor practices are also important to many people when they are making a purchasing decision.

If a company is hesitant in providing this information or doesn’t offer it up without a customer having to dig around a lot, they may be seen as dishonest or as having something to hide that is not considered ethical. For example, if a major fashion designer doesn’t state where their clothes are sewn and their labor practices, customers may not be as likely to choose them for a luxury purchase.

Authenticity can improve profits and build customer trust

Honesty and authenticity are key to creating a company with a purpose. Customers and clients want to feel good about the purchasing decisions they are making. While providing competitive value is something to consider, it is also worth considering that there are plenty of customers that will pay a higher price to ensure that their purchase is not negatively contributing to society or the environment.

When a company makes an effort to appear honest with their customers, they build trust that can lead to life-long customers and improved reputation in their niche market.

Involvement and interaction

There is an unfortunate trend in corporate environments of leaders becoming disconnected from their employees and customers alike. Great purpose-driven leaders make sure that they are aware of what is going on in their business at every level from the cleaning crews to those in other management roles. The more a leader knows, and the more authentic they seem to their employees, the better they will be at making important decisions and developing effective strategies for business success. This means interacting regularly and finding ways to ensure that employees are comfortable and have a voice when they feel the need to bring up an issue, or even better, have an idea for improving the company.

Purpose-driven leadership means always looking at the big picture

Sticking to the core values and higher purpose of their company is a key characteristic of purpose-driven leaders. Thinking ahead and analyzing every aspect of a plan or strategy to make sure that it aligns with the overall goals and purpose of the company may take some time, but it is critical if a company is to maintain its authenticity and customer trust.

The way of the future

In the future, companies that fail to appreciate the value of purpose-driven leadership and high ethical standards will lose their market share to those that do. Now is the time for companies to re-evaluate and start to make positive changes in the way they do business.