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Brain Circuits
Four questions to ask while building a purpose-driven businessÂ
As purpose-driven businesses seek to solve problems for society, they must leverage their relationships with multiple stakeholders and stay profitable. The question is: How can they achieve their social goals at the same time as achieving financial success?Â
What do a Danish shipping company and a premium pet food provider have in common? They elevated their corporate purpose and have what we call advocacy-based business models, which are succeeding as they focus on targeted stakeholders. Â
AP Moller-Maersk and Royal Canin (part of Mars, Inc.) are two of the 12 companies that we studied as they were implementing new organizational orientations centered on purpose. We found four things that successful companies do well as they navigate these very different industries. Ask yourself if your company exhibits any of the following four traits.Â
… take a stance?Â
Taking a stance on societal or environmental problems is key to advocacy-based business models. Maersk, the pioneer in container shipping that enabled global trade, pledged to pursue decarbonization of ocean transport. The company signed nine agreements to produce green methanol and successfully launched “ECO Delivery,” then the only carbon-neutral shipping option in the industry. Between 2019 and 2022, the demand for ECO Delivery grew 170% year-on-year, driven by Maersk’s largest customers, which include Nike, H&M, Disney, Novo Nordisk, BMW, and Volvo.
 … extrapolate from what’s already in place to better support your corporate purpose?
Instead of chasing a wide range of investment opportunities, the company built upon the premise that knowledge creates recommendations for its tailored nutrition, sold through vets and specialty retailers. It allocated resources to specific health areas such as start of life, obesity, and healthy aging. This strategy has resulted in new niche products that anticipate health issues for better pet health outcomes and mutual value creation for stakeholders and the firm.
… boast strong leaders who accept vulnerability? Â
Along with bold efforts to create higher-order impact, leaders should be willing to acknowledge the risks that stem from pursuing a new model. For example, when Maersk announced its capital-expenditure investments, it was not sure whether green methanol would be the fuel of the future. Adopting an advocacy-based model created vulnerabilities, but the company’s leaders have taken them in their stride as they try to stay ahead of the curve.
… have an enabling culture?Â
Companies can only create a higher-order value for multiple stakeholders when those stakeholders are aligned in their pursuit of a purpose. Royal Canin developed a culture with absolute clarity about the company’s purpose, which Mars Petcare trademarked: “A Better World for Pets.”™ This has meant making purpose central to decision-making with a focus on the pain points of strategic stakeholders – and on the long-term impact that the company can have.
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