The sales trend #4 of the 12 Sales Trends for 2015 is ‘Doing Meaningful Business’. Here’s a summary of the trend.
Over the years companies have become very focused on only creating value for their shareholders (and by value we mean dividends). This extreme focus has meant that making a profit too often took priority over the well-being of employees, communities, and the environment.
However, this model has proven to be unsustainable and in some cases brought about a backlash of undesired consequences: job cuts, longer commuting times for staff, a decreased quality in products manufactured, and contamination or exhaustion of natural resources, to name a few.
The current corporate setting where there’s a frantic chase for more and more (immediate, short-term) profit is not sustainable. The more some companies accumulate and distribute profits amongst their shareholders the more the inequality in communities deepens.
Given that communities are what keep companies going, it seems ironic that many companies do not look after their local communities to ensure their well-being and prosperity. Smart companies are aware of this connection and have started (some of them over 20 years ago) a different way of doing business; with a purpose—a social or environmental purpose—in mind. These are called social enterprises.
Welcome to the era of the social enterprise
A social enterprise is a business that has both social and commercial goals. What makes it different from other enterprises is that it places a firm emphasis on tackling social problems. This positive impact is as important to its business objective as any financial bottom line.
According to the Social Enterprise Alliance (SEA), a social enterprise is a “business whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas.” Additionally, B-Corps state that they are people using business as a source of good.
A social enterprise, because it operates as a business, does things that make money, such as selling goods or services; unlike a charity which relies on donations. This could encompass a whole host of activities and you’ll find social enterprises with every legal structure in almost every industry.
There are many reasons why building such a company, transforming an existing one into a social enterprise, or working for one makes sense (besides the fact that it may align with the board/ owners’ personal values).
Having a purpose beyond profit is a proven means to attract and retain staff, particularly the Gen Y and Millennial professionals. It’s a great point of differentiation from their competitors. Several sources also claim that social enterprises have better employee engagement and satisfaction.
However, a few critics have appeared who claim that social enterprises have failed. Their main point is that social enterprises are too small and lack the infrastructure of governments and big corporations to be able to scale up.
Maybe they have a point. Maybe they are small but they still make a positive impact and that’s a big improvement. The biggest impact is, however, how these social enterprises are influencing companies in the traditional business model. So maybe they are not the solution for every business at the moment, but getting companies to get closer to a better way of doing business by considering all stakeholders and the environment is what is coming next.
What does this mean for you?
Well, considering people and the planet when making business decisions makes sense. On a more practical note, it gives you a competitive advantage.
Consumers in B2C transactions (and more and more in B2B now as well) care about companies that have purpose beyond profit, or that at least minimise their impact in the environment; but this purpose has to be honest and transparent. It cannot simply be a statement on your website. It has to be real.
Think about your employees and the communities where you operate; there won’t be a lack of causes to choose from. Choose the one that makes the most sense with what you do or how you do it.
Remember, everybody lives by selling something.