Purpose//

Want Innovation and Growth? Future Fit Firms Have a Secret – They Are Purpose-Led

The idea that disruption is potentially bad, rather than an opportunity to shape a world more in line with our values, echoes something else business leaders have been hearing for decades: that they can either do good or do well.

Nearly every day, business leaders are warned that unstoppable waves of disruption will soon descend upon their organizations. Thanks to technology and digitization, before they know it their employees will be replaced by robots and their business models will be rendered obsolete.

In this tale, disruption is an outside force — something happening to us. But what if we reject that view? What if we recognize disruption for what it is — a consequence of growing technological capabilities and digital innovations yielding dramatic improvements in the human condition — and decide to make it work for us? What if we determine the direction of travel?

The idea that disruption is potentially bad, rather than an opportunity to shape a world more in line with our values, echoes something else business leaders have been hearing for decades: that they can either do good or do well.

Their performance, they’re told, will be measured by what they return to shareholders in the short-term, not the value they create for society over the long term. They can either make money or make a difference — but they can’t do both.

Like a lot of the choices society presents us with, that supposed profit/purpose trade-off is flat-out false. So is the notion of technological determinism that says the tech genie is out of the bottle and we all adapt or perish. When deeply limiting beliefs like this persist, it sets artificial barriers on what human beings can accomplish for and with each other.

These challenges drove hundreds of corporate executives, startup CEOs, and market influencers from around the world to Amsterdam to put their heads together at EY’s Innovation Realized ‘18.

As we saw at Innovation Realized and heard from bestselling Sapiens author, Yuval Noah Harari, future-fit organizations are rejecting false constraints and working with a sense of urgency and sense of purpose to shape the direction of disruption. They’re not innovating for the sake of innovating. They’re doing so to build a better, more sustainable, world. And voila – that is what is unleashing their innovation and powering growth.

EY Beacon Institute urges companies large and small to cast aside false “either-or” choices in favor of an aggressive “yes, and” approach that delivers for the bottom line and for society.

Using your organization’s unique strengths and leveraging the increasing abundance of information and digital capabilities is a great formula for doing some good for the world and the bottom line.

For a starting point, consider the world’s 17 global goals (Sustainable Development Goals, or SDGs). This business plan for the world is a big opportunity for businesses who match their capabilities to the world’s needs. They’re a chance for firms to collaborate with new partners — and a potential $12 trillion business opportunity, according to a report from the Business & Sustainable Development Commission.

Plenty of businesses are already building innovative cultures and unleashing growth by harnessing their existing core competencies to be purpose-driven. Take a look at some of the CEOs and other senior executives who are linking profit and purpose:

 How can you move purpose from rhetoric to reality

These thoughts echo two key themes we heard at Innovation Realized:

1. Think big — and think long term.

Thus was a message delivered by Anima La Voy, who heads Airbnb’s social impact experiences.

Today, Airbnb is recalibrating its worldview beyond short-term profits to what its CEO calls an “infinite time horizon.” As Anima told us, when you’re thinking on a global scale — beyond a single generation, let alone a single earnings report — you’re forced to take on big problems that affect a range of different stakeholders. You’re forced to make disruption work for you.

Today, the speed of that disruption can leave your head spinning. Business models of the past can barely keep pace today, and certainly won’t keep up tomorrow. Leaders can’t afford to wait around for someone else to find the answer. They have to leverage what they do well to build a world that works better.

That idea was at the heart of the second message we heard at Innovation Realized.

2. Build your purpose on your core strengths.

Use what you already do well as a foundation for innovating and driving purpose-driven growth.

Rob van Leen is the chief innovation officer for Royal DSM, a global firm that uses science to improve health, nutrition, and sustainable materials. DSM has used what it has long done well — scientific innovation — as a springboard to transform itself from a coal mining company into a world leader in fighting climate change and malnutrition.

As Rob told us, you may have to change your business model, but that doesn’t mean giving up your company’s core competencies. You may have to find new ways to collaborate, but that doesn’t mean forgoing your competitive edge. In fact, in a disrupted and uncertain environment, an ability to collaborate is precisely what makes you competitive.

Whether it’s skeptical shareholders or cynical observers who question your motives, Rob warns that you’ll inevitably encounter headwinds on your purpose journey. But uniting under a common purpose and staying the course, as DSM has done, is worth it. Here’s a look at how Rob and other leaders have united money and meaning:

 What if money and meaning go hand-in-hand

For leaders who share EY Beacon’s core belief that business has a responsibility to a broad set of stakeholders, including society as a whole, the UN Sustainable Development Goals are a useful tool for companies to bake purpose into their business model.

But the global goals aren’t the only tool. Many different threads can tie together profit and purpose. When it comes to guiding an organization in disruptive timesthe task for leaders today — the challenge is figuring out which thread you’ll use and how you’ll use it. No matter the thread, thinking big and building your purpose on what you do well provides both the aspirational vision and the practical foundation to make it real.

As Rob and Anima told us, there are few more effective tools to build a culture of innovation than uniting experience and expertise with a deeply held sense of purpose. 

Leaders today are thinking big. They’re rejecting constraining notions of disruption happening to us in favor of making disruption work for us. They’re taking what they do well and using it to do a little good. And in doing so, they’re showing how purposeful businesses can put both money and meaning at their core.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

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