Leading Impact

More private sector leaders are taking a purpose-driven approach to business. There’s good reason. More people are recognizing the role of business in contributing to positive social outcomes. Purpose-driven businesses are a vehicle for leaders to perform as their best selves, and for companies to be unique forces for good in ways that build the community and build business. They can also increase market share, attract talent, draw conscious consumers and appeal to impact investors. 

Despite the benefits, leading a purpose-driven company can be tricky. Without access to guidance and support when it comes to implementation, companies often default to tick-the-box programs that do not produce meaningful outcomes. In this three-part article, collaborators Randy Poon, Joni Avram and Roman Katsnelson offer a guide to understanding purpose-driven business and delivering meaningful results.  

Dr. Randy Poon: What do we mean by purpose, particularly in a corporate and organizational context? Purpose is distinct from mission and vision. Mission is about the day-to-day. Vision speaks to aspirational goals over time. Purpose is about ethos -- who we are at our very best. It’s about the “why”. It’s the answer to the question, How can we uniquely meet the needs of the world by helping, giving, and serving others.

There’s a North Star-like quality to purpose. It creates a unifying vision for everyone from employees to customers, partners, shareholders, and the larger community. It drives ethics and guides culture. It elevates business as a force for good. Over the past 18 months, I’ve interviewed dozens of purpose- and impact-oriented business leaders. One thing I’ve learned is that a purpose-oriented culture flows from within. It flows from the heart of its leaders and employees throughout the organization.

Evelyne Nyairo is the founder and president of Ellie Bianca–--a purpose-driven skincare company. Her company’s mantra, Kind to Your Skin. Kind to the Earth. Kind to Women, summarizes Evelyne’s commitment to empower women through business and education. Growing up in Kenya, Evelyne was immersed in a culture of stark gender inequality. She developed an admiration for the resilience and grace of the women in her community. Their quiet strength coupled with their beautiful, healthy skin became a foundation of beauty for Evelyne on which the company was built. The product’s fundamental ingredient, shea butter/oil, is personally sourced by Evelyne from women-run co-ops in Africa. In the process of growing her business, Evelyne nurtures more than skin. She is helping grow a network of female entrepreneurs who share with and learn from one another as they pursue their dreams and grow in confidence, pride and love.

Evelyne’s story beautifully illustrates how business leaders can integrate purpose into work. And it's more important than ever. People want their work to matter. They want their personal lives to matter. Increasingly, the distinction between these worlds is waning. 

The Great Resignation, the unprecedented mass exit from the workforce (whether physical or mental), is not just a result of the pandemic. It began long before. And it significantly impacts the critical human resources that companies need to innovate and grow. Business can’t carry on the way it used to. Could purpose, both individual and corporate, provide a new way forward?

Yes, work pays the bills and offers material enjoyment. But what if there’s an opportunity for more? Seth Godin, in his new book The Song of Significance, offers this challenge to employers: “What if we created the best job someone ever had? What if we built an organization people would genuinely miss if it were gone? How much better would our work be if we could simply talk about the work without hesitation? What if the work we did made things better?”

Part of the purpose-journey for Colin Schmidt, CEO of TerraPro, an earthworks and matting company based in Sherwood Park, Alberta involves putting people and relationships before strategic plans or bank accounts.  For Colin, purpose is a matter of saying who you are and then walking in complete alignment with that statement.

In contrast, some take a less than authentic approach to social purpose. As conscious consumers, activist employees, and impact investors demand more from business, some leaders default to tick-the-box initiatives driven by the need to deliver on metrics and appease stakeholders – rather than reflect the deep-seeded ethos of the company. Social purpose that does not flow from the heart of a business can breed mistrust and lead to backlash. To succeed, leaders need to integrate purpose into all aspects of the business. As Evelyne Naiyaro says, “Impact has to be weaved in.”

Social purpose that does not flow from the heart of a business can breed mistrust and lead to backlash.

Joni Avram: How do you ‘weave in’ impact into a business? One way is to zero-in on a problem you can uniquely help solve.  A good example is Interface Carpets, a player in what has been one of the world’s dirtiest industries—carpet manufacturing. Interface is now known for its environmental leadership, but it wasn’t always that way. When Ray Anderson founded the company in 1973, he knew nothing about the environmental impact of his industry. In 1993 he calculated the company’s environmental impact. The results made him want to throw up. He set a target of net zero impact within 25 years. Mission Zero motivated Interface employees, customers, and supply chain. The company hit its target a year early and found millions in quadruple-bottom-line (people, planet, profit, purpose) benefits. In process, they doubled in size. 

Interface’s success is linked to something companies often underestimate: the power of evaluation. Interface’s measuring and reporting process helped their customers learn about – and want more – sustainable products. As buying decisions evolved, the entire industry began to change. Through evaluation and reporting, Interface did more than change their own environmental footprint. By weaving in impact into their business, they changed their industry. The commitment to evaluation flowed from the company’s deep commitment to Mission Zero.

Organizations that prove they’re achieving their purpose build credibility and trust, which leads to increased support, and even bigger impact. But what happens when organizations can’t show the same results? Could it undermine impact?   

Let’s Talk Day (BLTD) is an initiative by Bell Canada to remove the stigma around mental health through greater awareness and more talk. Historically the campaign has donated five cents for every text, call, and social post generated on #BellLetsTalk day, generating nearly $140 million to mental health programs and services. Bell can be applauded for increasing access to services. Unfortunately, without impact outcomes to point to, critics have questioned both the motives behind the campaign (is it more about marketing than mental health?) and whether Bell has been completely ethical in its own handling of employee mental health issues. 

Too many companies really don’t know if their efforts are producing good results.

Many companies fall into the “Simplification Trap”, treating complex purpose-driven initiatives as simplistic, and not using current evaluation methodologies to test assumptions and learn about real impact. This isn’t for lack of care or desire to do the right thing. It’s because reality-testing our assumptions is difficult. For example, although BLTD generates high volumes of online suicide-related content, a study found the campaign had no impact on suicide rates. One reason: posts are mostly generalized comments about the problem of suicide. In contrast, stories of recovery and resilience are linked to decreased stigma and incidents. What if Bell encouraged its network to help reduce rates of suicide through this simple act of positive story sharing? What impact would such an initiative have on the community, on Bell employees, and on the impact of BLTD?

As employees and the public expect companies to lead societal change, they’ll trust and respect the ones who deliver meaningful outcomes. But too many companies really don’t know if their efforts are producing good results -- which undermines their effectiveness, their credibility, and their impact. Many focus on activity rather than outcomes, leading to a missed opportunity to contribute to meaningful impact and align with organizational purpose. 

Roman Katsnelson: Modern evaluation science has developed new approaches and platforms to support more robust, more integrated active inquiry into impact. This has been articulated as a shift from “Impact Measurement” to “Impact Management.” 

Impact Measurement relies on a narrow set of quantitative indicators, chosen for their measurability. It asks “what” questions, focused on activities. How many impressions did we generate? How many backpacks did we distribute? How many wells did we build? How many people came to our awareness trainings? These are critical questions, to be sure, but on their own they do not deliver sufficient learning value. They do not protect against the Simplification Trap.

Impact Management adds two critical evaluative dimensions to the “what” question – it asks, “So What?” and “Now What?” The “So What” questions are meaning-making in nature – given the metric-based output we see, why should we care? Why should anyone else? What changed as a result of those activities? How did awareness campaign impressions actually change attitudes? How did the changed attitudes actually change behaviours? What did the children do differently after they received their backpacks? What did their families do differently? Did our wells deliver the health benefits they were meant to? What social relationships were impacted by the presence and proximity of those wells? And how do any of these changes align with our purpose?  

Even more important are the “Now What” questions, which are strategic in nature – given the metric-based output we see and the meaning we ascribe to it, what should we do differently going forward? Taking this question seriously unlocks the opportunity for a “weaving-in” of purpose throughout the organization. Genuinely purpose-driven businesses provide both supports and expectations for all units – from sales and supply chain to human resources and operations – to be governed in alignment with their social purpose.

Some links from purpose to practice are easier to spot than others. In the case of Interface Carpets, driving a net-zero agenda would link very clearly to supply chain and manufacturing. Perhaps less clearly to sales and HR. In the case of Bell Let’s Talk, it might be easier to spot impact integration in HR, and more difficult in other departments. The field of Impact Management provides developmental and evaluative structures to guide the hard work of “weaving-in” across all aspects of the organization. 

The evaluation approach that I have found most helpful in guiding this work is Principles-Focused Evaluation. This approach, pioneered by Michael Quinn Patton, identifies principles as guidelines for action that are adaptable to various contexts, rather than rigid protocols to be followed. This adaptability to various contexts is exactly what purpose-driven organizations are after, when the context shifts internally from operations to marketing, or externally from national to international operations. Articulating the principles of impact that a company is guided by goes a long way to making its efforts evaluable. 

Some businesses derive such principles externally. For example, a company might join the global movement to align with the Sustainable Development Goals, or choose to register as a B-Corporations, aligning with the principles articulated by the certification process. These are effective and powerful approaches. Other organizations derive their own principles, as further articulations of their own purpose. In any case, having a clear set of principles working as operating guidelines brings the full organization into the scope of purpose. 

In a purpose-driven business, all units are supported and expected to be governed in alignment with social purpose.

In a time when corporate purpose is gaining momentum, a shift from tick-the-box initiatives to authentic purpose-driven leadership is essential. Purpose isn’t about compliance or appeasement, but about an intrinsic ethos that guides actions and decisions. Real-world examples that demonstrate how leaders have succeeded in weaving purpose into their businesses show the possibility of generating profit and positive social impact in parallel. 

The path to a successful purpose-driven business goes through several stages and needs explicit supports to mitigate risks and avoid traps. In the first stage, purpose must flow from within. Founders and leaders can benefit from focused coaching supports to articulate an aspirational purpose which will inspire people and align efforts. In the second stage, purpose must be woven-in across the organization in an intentional way. Leaders and teams responsible for strategy and operations can benefit from organizational design supports to build opportunities for de-siloed, integrated impact. In the third stage, purpose must be reality-tested and refined. Organizations can benefit from impact management supports to articulate their guiding principles and build evaluative capacity for continuous learning and adaptation. 

Dr. Randy Poon is the Chief Story Officer and Executive Coach with the Purpose + Performance Project.

Joni Avram leads Cause & Effect, which offers training and consulting in design, execution and evaluation of social impact strategies.

Roman Katsnelson leads KRD Consulting, and Organizational Development consultancy providing leadership, research, evaluation, and facilitation expertise to local, national and international organizations.