Why Companies Are Choosing Purpose Over Profits
Originally published in The Startup here.
The Rise of the Ethical-Economy Part II
When I wrote ‘The Rise of The Ethical-Economy’, I covered the consumer-facing side of the coin — how the world is changing and making consumers more conscious of the products they buy, and the companies they purchase from.
The flagship example of such companies who have excelled in this economy is Patagonia — a company whose always been focused on a higher purpose, to be more than just sustainable products, who have the monumental mission “to save our home planet”.
But it goes deeper than just selling purposeful products, in fact, Patagonia receive a whopping 9,000 applications for every open internship role.
This is the other side of the coin of the Ethical Economy — how employees are also becoming more deliberate in the organizations they choose to work for.
Employees want to work for ethical companies
On one side, you have the consumer and the products you build which is outward-facing but there’s also an inward-facing side — the relationship between employee and employer which has been shifting too.
Not only are consumers becoming more conscious of the products they purchase but employees are also becoming more conscious of the organizations they choose to work for.
A recent study performed by LinkedIn, surveyed 26,000 members globally revealed that 74% of candidates want a job where they feel like their work matters.
Similar stories can be found everywhere. A study done by Cone Communications in 2016 showed that 75% of Millennials say they would take a pay cut to work for a responsible company, and 64% said they wouldn’t take a job if the employer doesn’t have strong corporate responsibility practices.
Harvard Business Review also published a similar story, stating that 9 out of 10 people would forgo some pay in order to do more meaningful work. And in 2011, they also published this great piece brilliantly titled “Meaning Is the New Money”.
Perhaps the most popular and widely known compilation of research into this space is Dan Pink’s book Drive and his top viewed TED Talk. Dan Pink distills the vast amount of research into workplace motivation and simply puts it down to three things; we are motivated by purpose, autonomy and mastery.
Seeing purpose in there comes as no surprise. I’m sure like many others, you also crave meaning in life.
We want to be part of something larger than ourselves, to have purpose. For many this need drives deep, it becomes a core identity and subsequently determines our choices in life, including the companies we choose to work for.
This is only on the rise, as we get more conscious of our purchasing habits we also start to scrutinize other actions in our lives — can I really justify continuing to work for a company who are damaging the environment whilst trying to lower my carbon footprint in other aspects of my life?
What this means for organizations
Whether you like it or not, you’re in a war for talent. It’s real.
If you think you’re a bank and don't compete with startups or SaaS companies then think again. Because for a Product Manager, Engineer, etc you do. And for those domain-specific roles, think again, neo-banks and fintech startups are all on the rise — many companies, like Bank Australia, are capitalizing on the ethical-economy to drive sales and recruitment.
It’s human nature to avoid discomfort, we don’t like to hangout with people who we don’t get along with and the same goes for the workplace. When people’s values don’t align with the organization's friction is created. We begin to feel frustrated by the companies actions, alienated and uncomfortable. This can lead to employees resigning and seeking out a place whose values align with their own — I’ve been one of those people.
76% of Millennials consider a company’s social and environmental commitments when deciding where to work.”— Cone Communications, 2016
A story a previous colleague told me — Sara (not her real name) was a big animal rights supporter, she even volunteered in shelters in their spare time. Now for those who aren’t aware, Australia hosts one of the largest Horse Racing events in the world, the Melbourne Cup. This event happens at 3:00 pm on the first Tuesday of November and has become so ingrained into the culture here that it is known as “the race that stops the nation” — in the state of Victoria, where Melbourne is the capital city of, it’s even a public holiday.
For many this event is a BIG one, they dress up, go out, bet, drink and have a good time. But for others, Sara (and myself included) this event is nothing but a sad affair fuelled by alcohol and poor behavior. For someone like Sara, she wants no part in this event whom regularly has horses die on the track during the race. Unfortunately for her at the time, she worked at an organization where most, especially the senior managers, were big fans. On the day, they had organized an event at work and streamed it live on the TVs around the office.
Feeling outnumber Sara still mustered the courage to voice her values and made sure it was known that the event would make her uncomfortable. Although they did acknowledge her perspective they still carried on with the event regardless. That for Sara was a turning point, one which made her conclude that she could no longer continue to work there.
It may seem trivial but the companies values did not align to hers and that mattered — a lot.
Fast forward a couple of years when I had the privilege of working with her. The day she told me this story was the day before Melbourne Cup and the organization we were both working for acknowledged that not everyone was a fan. And for the second year in a row, they did not stream or host any activities for the race.
Rather they allowed Sara to self-organize a fundraiser to donated money to discarded race animals like horses and race-dogs. Also acknowledging that some still wanted to watch the race, they didn’t prohibit it but they did make a note to be respectful of others' values and therefore if you wanted to watch the race to please do so down at the local pub and not in the office.
At the end of the day, people just want to feel supported and respected. This includes by those we work with. If a company isn’t being inclusive and supporting equity, there’s plenty of other organizations that do.
More than financial: the human cost of COVID-19
Post the coronavirus I’m betting we’ll see a spike in resignations as people have been shown their company’s and leader’s true values.
For some people this crisis has shown them their employer's true colors and where they, as employees, really sit on their list of priorities (at the bottom).
This recent blog post from corporate-rebels shared one such story, which they labeled as “the shittiest lay-off in corporate history” — they also continue to share a number of good and bad corporate responses to this crisis.
Another story they shared was about employers resorting to using tracking software to spy and report on their employees — something which I got wind about* before reading their blog.
*forewarning some of the stories in that link will make you cringe.
The reality is that for some managers remote working is a nightmare to them. Their lack of trust and no longer being able to view “bums in seats” from 9–5pm make them resort to using all kinds of immoral actions like using software to track and even to be able to view their employee's screens at any time. This is honestly the last thing anyone needs right now is their managers spying on them. Talk about a toxic work environment.
Stories like these are examples of how this current pandemic is shining a spotlight on companies and their leaders’ true colors. It’s shown their true values, not the ones which are printed on the office wall.
For many this has been a sober realization that their company's values don't align to their own. And when all the dust settles we will likely see a number of these people have a newfound drive to go work somewhere else.
But it’s not all doom and gloom. For others their experience during this crisis will be nothing short of the complete opposite. Their bond with their colleagues, managers and employer will be strengthened, as they witness the actions of those around them in a crisis.
Some leaders have been acting with honesty and putting their people first. As a result, their people will come out of this stronger than ever — inspired, passionate and generally proud to call their company home.
Ultimately as a leader, you get to choose how you respond — for the sack of those you’re responsible for, I hope you choose the right one.
“Your actions define your character, your words define your wisdom, but your treatment of others defines REAL you.” — Mayur Ramgir
Read part 1 here 👉 ‘The Rise of the Ethical-Economy’
