Does purpose really lead to profit?
Researcher Raj Sisodia compared the performance of S&P 500 companies between 1998 and 2013. Those that operated with ‘a clear and driving sense of purpose’ outperformed their less noble competitors by a factor of fourteen.
Customers expect companies to address big societal issues like sustainability, transparency, and inequality - and those values influence buying decisions.
Humans tend to behave in ways that reinforce a positive self-concept. Purposeful consumption lets us think well of ourselves. Purpose-driven messages are also more salient, making the related products and services more appealing.
The best purpose-led companies don't just talk about making a difference. They build social and financial goals into their business plans, and pursue and measure both. As a result, they attract and retain workers - of all ages - who are looking for purpose over a paycheque. That means greater loyalty and productivity, and fewer turnover costs, which can equal greater profit.
What's your purpose?