Small and medium sized businesses make up 95% of all companies, and they provide 60-70% of the employment in OECD economies. They represent the backbone of the business community around the world; they are the places where innovation hatches and entrepreneurship blooms. Arguably, smaller businesses will be far closer to their own mission than larger, more sophisticated companies where it is easy for the leaders to become disconnected with their original raison d’etre.
So why is it that we rarely hear the positive, exemplar stories about purpose-led strategies being pursued by SMEs? Howcome it is the multinational global brands that dominate the headlines around sustainability leadership? Coca Cola’s “Pay it Forward”; Marks and Spencer’s “Plan A” and Unilever’s “Sustainable Living Plan” are all too familiar to those of us working in the sector.
I have spoken to many smaller businesses who are a little intimidated by the scale of the challenges they are now expected to impact on – such as climate change, poverty alleviation and inequality. The seemingly all-encompassing nature of the today’s much-vaunted purpose strategies can make the prospect of embarking new business strategies to meet these growing expectations more than a little daunting.
This feeling is compounded by the fact there is a growing regulatory framework around corporate responsibility, with increasing red tape to be negotiated on governance issues such as Modern Slavery, the Gender Pay Gap and GHG reporting. For many, tackling the whole social or environmental purpose area is viewed as a can of worms they’d rather keep shut, rather than an opportunity to be exploited for potential growth and business success.
But smaller businesses don’t need to feel overwhelmed by placing purpose at the heart of their business. Instead they should view purpose as an opportunity and not a threat. There are many significant opportunities both financial and cultural for businesses of all sizes in transitioning towards a central business purpose that goes beyond profit. For a start, smaller businesses are also more agile and able to make the necessary internal changes that bring about positive social and environmental outcomes. in spite of what you read, there are many accessible ways in which smaller businesses can start to make a significant impact.
So here are five tips on how businesses can take their first steps along the journey towards being more purposeful.
- Talk to and involve your staff
The richest and most authentic source of your purpose beyond profit lies in the passions, sensibilities and energies of your workforce. It goes without saying that your staff are people first and employees second, so tapping into what motivates them to get up and come to work in the morning is an invaluable resource for building your strategy. The most effective company cultures evolve when we amass like-minded people and let them pool their collective energies, using passion to solve challenges they have helped to identify as important.
It’s vital your purpose is truly authentic and resonates with your people as well as aligns with your leadership philosophy. Recent research has shown that almost half of workers say their company does not act in line with its purpose and values, and over half say their company’s purpose does not reflect reality.
Run a simple questionnaire asking people to identify what motivates them, which areas beyond financial success they deem most important and where they’d be willing to spend some of their personal time and energy both outside and integral to their day jobs. By involving your staff in the process you will avoid this pitfall and also collect some great ideas about where you can make the biggest difference along the way.
- Consider your neighbours
Whether that’s your HQ, your manufacturing plant or the location where you source raw materials, your impact is felt beyond the four walls of your organisation. By paying attention to the needs in these communities and recognising you have a symbiotic relationship with them, you will build greater trust and goodwill between your business the wider world. This can also open up opportunities for collaboration, providing employee volunteering options, and creating shared value for both the communities and your business. Another example of where a relatively small amount of investment in time or money can make a big difference.
- Identify your unique contribution
Many businesses feel they are too small to have a significant impact on the vast global issues we read about in the media such as climate change, poverty and inequality. Although it can be off-putting when faced with such macro-economic factors, by focusing on your core competence – whether that be in technology provision, specialist professional expertise or manufacturing excellence – your company’s unique contribution will emerge.
Perhaps you can offer your engineering skills to a local authority to help them solve a problem for the public good? Or maybe you can open up your facilities for local schools and colleges to use? Maybe your products can be adapted at little cost to provide a pilot solution to an NGO working on a global issue. Or perhaps through manufacturing efficiencies you can recover some energy or waste in your supply chain that can be diverted to a deserving cause?
There are multiple ways in which you can combine your core business operations with creating positive social and environmental impact that maximise your expertise and don’t take you away from your day to day mission.
- Return to your roots
For many companies, the answer to the question “why do we exist?” lies in its history. The inception of a company is often the most optimistic and clearly focused time – and whilst most businesses start out with the explicit aim of making a profit, all good businesses are solving some kind of a problem or challenge too. Tapping into that original promise and optimism, and thinking about the early goals you set out for your business and the governing principles you’ve employed to help you achieve them, will often provide you with the answers to your purpose theme.
- Consider your long-term business sustainability
Finally, there is increasing evidence from the investor community that both individual and institutional investors are looking for companies to consider a much longer time horizon in their corporate strategies than the traditional 2-3 year window. In January of this year, Larry Fink, CEO of Blackrock – the world’s largest investment firm – wrote a letter to all CEOs of firms they invest in urging them “to serve a social purpose” and show how they make a “positive contribution to society.” There is firm recognition that pursuing what has become known as ‘triple bottom line’ (social, environmental and financial) goals naturally takes companies into longer planning cycles. It takes time to work on big problems- such as reducing your carbon footprint, replacing plastics in your packaging, narrowing your gender pay gap, tracing all your products back to their sources and eradicating unsustainable raw materials from your supply chain.
Small businesses should not be afraid to start looking further into the future in order to address these types of issues and build evidence of their positive impacts. But one thing is for sure, your stakeholders will thank you for having a strategy that is focused around shoring up the business for the long haul.
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At Fit for Purpose, our goal is to provide businesses of all sizes and at any stage along their journey with practical tools and objective counsel that helps you to identify, demonstrate and communicate your purpose beyond profit. Please do get in touch if you have a project or need to discuss.
 Source: OECD
 Kin & Co’s 2018 Survey “How To Avoid F****ing Up Purpose”