How To Reboot The Purpose Disconnect In Global Business

Though other timely concerns have come along, like the battle against inflation, for five years the concept of Purpose has become a central issue of debate in American business.

Recall the famous Business Roundtable decision of August 2019 to formally redefine the overall Purpose of a corporation as being to promote “An Economy That Serves All Americans.” Signed by 181 CEOs at some of the U.S.’s biggest enterprises, the idea was that they were now going to lead their companies for the benefit of all stakeholders — customers, employees, suppliers, and communities—and not just their shareholders.

Tricia Griffith, President and CEO of Progressive Corporation and a leader within the Business Roundtable, encapsulates the essence of the internal Roundtable debate that shaped their stance: “CEOs work to generate profits and return value to shareholders, but the best-run companies do more. They put the customer first and invest in their employees and communities; in the end, it’s the most promising way to build long-term value.”

Most observers noted that deciding Purpose is the official “end goal’ of a public corporation marks a huge sea-change from traditional capitalist thinking. After all, Milton Friedman in 1970 famously declared that the sole responsibility of any business is to increase its profits—a viewpoint that has dominated C-suite thinking ever since.

What’s changed since 2019? The global pandemic and ensuing health crisis reframed how we thought about responsibility and the nature of leadership and society. Business Roundtable members, for instance, collectively contributed $863 million in monetary donations towards COVID-19 response efforts, exemplifying a shift in how businesses perceive their role amid crises.

However, amidst the current economic and social turmoil, one could question whether the notion of Purpose retains the same resonance as it did during periods that now appear comparatively more stable.

I wonder, in turbulent times like these, does the pursuit of Purpose hold equal sway? There are certainly stakeholders who point out the complexity of making the idea work in practice; leaving me to also wonder—can purpose scale in multi-national organizations?

In 2023, Unilever CEO Hein Schumacher stated in his company’s Annual Report, for example, that while the company’s focus on Purpose’ is laudable and inspires many people to join and stay with the brand and so “we must never lose it,” he also warned that, “I don’t think we advance the cause of purpose by force-fitting it across every brand.”

It appears this sentiment is shared by others. A 2023 survey of a thousand business leaders found that 70% agreed its importance has increased over the last five years. Furthermore, 89% of CEOs contacted said their organizations definitely have a defined Purpose, yet only 63% use it to inform their business decisions.

The discourse may be confused by the growing emphasis on ESG (Environmental, Social and Governance) considerations; is Purpose essentially addressing those metrics? Or is it cantered on cultivating great EX (Employee Experience) and enriching the workplace fulfilment for teams? Alternatively, is it a strategic endeavor to showcase a meaningful ethos that resonates with younger employees and new hires.

So we want Purpose in business, but we may not have figured out how to make it work and become routine. Maybe, as the Business Roundtable has called for, a transition from the original definitions of Purpose to Purpose 2.0 is called for. Reports like this make us wonder, have the lofty original intents from companies like Google and Apple—(Google) “[To] organize the world’s information and make it universally accessible” and (Apple) “[To deliver] technology [to] lift humanity and enrich people’s lives in all the ways people want to experience it”—led to a purpose disconnect.

What Can A Serial Entrepreneur Tell us About Purpose

I think Purpose is a great idea and agree it should be a deliverable, but maybe it’s a concept that has to emerge organically rather than any forced implementation. Nonetheless, at the heart of any business proposition I agree there should be a commitment to making a positive difference for society.

I don’t have the final answer to the Purpose problem, because I believe, and teach executives, that purpose at work is fleeting for employees and needs to be ignited, and personally cultivated, situationally for each person, season to season. You personally have to bring your own sense of purpose to work. One way I teach that is to play with and juggle the fleeting experiences found in the connected tissue between Fun, Money, and Impact.

Beyond teaching this and experience it running companies as a Serial CEO, I’ve met with and interviewed dozens of CEOs and serial entrepreneurs who’ve made impacts to business, society and their employees, like John Chambers, Sridhar Vembu, and Bracken Darrell, to get a better understanding of what we can do to make that Business Roundtable slogan a reality.

I talked with Joel Hyatt, of Hyatt Legal Services fame. Over the past couple of decades, Joel’s disruptive startup ventures have made big differences in the world of legal, media, and now technology. He effectively democratized legal services. As recently as the 1970s, lawyers weren’t allowed to advertize, an archaic ban he more or less busted on his own, so helping the broader population finally get easy access to good legal help on the open market.

Seems like he was only getting started. After winning an antitrust case that broke up some of the big media strongholds and rules, he and Al Gore launched Current TV, which from 2005 to 2013 pioneered user-generated content and which received multiple Emmys, Peabody, Livingston Awards, investments from Comcast and DirecTV, and so on.

Not satisfied with having made positive differences for the participants in two hugely important pillars of American life and business, Joel has decided to take on one more: procurement. Procurement—talk about a sector that needs Emmy Awards.

While procurement may seem less glamorous, it is, in fact, a profoundly important domain that, if properly disrupted’ could vastly improve the working lives of millions. Simultaneously, it would provide small and medium-sized businesses (SMBs) with unprecedented opportunities to secure lucrative contracts with the larger corporations, who they have previously just been invisible to.

Harnessing AI To Solve Societal Problems

Joel’s latest venture, Globality, is all about streamlining and enhancing the procurement process for businesses. Leveraging both machine learning and generative AI, the company offers something totally unique it calls “autonomous self-serve sourcing.”

And what’s interesting is that this is no 2024 VC-backed start-up leaping on the AI bandwagon. Joel has been developing this solution slowly for years, and so has both learned what works and what doesn’t, and more importantly garnered an impressive global customer list that includes the likes of Fidelity Investments, T.Rowe Price, Adidas, BT, Tesco and Santander Bank.

Just a money-making venture, as Friedman said a company should be? Yes and no. Joel spotted an opportunity. But it turns out at every step of his career, Purpose seem to have been a priority, stating: “There’s nothing more exciting than taking an idea, turning it into reality, building something that’s important and that addresses an important need, building teams, creating culture, adding value—but in each of the cases where I’ve started a company, it’s really been about identifying a societal issue, and believing that there was a private sector solution that could address that issue and have a positive impact. Each of my business stories started with that.”

Industry Democratization Has Undeniable Discontents

The genesis of Globality once again came from a societal issue: how can we make globalization work better? In other words, How can we drive the benefits of globalization deeper into the world’s economies, thereby helping more people and more companies?

“Globalization has undoubtedly benefited many, many people,” he says. “Over two billion people in the developing world have come out of poverty due to its impact, as all over the world the costs of goods and services have decreased because of it.

“But a lot of people were lost amidst the seismic shifts of going from national economies to global economies, going from manufacturing economies to service economies, and going from analog economies to digital economies.”

Joel points out that people who were adversely impacted by the forces of globalization have seen many well-paying, middle-class jobs disappear. “Public policy didn’t really help those individuals get through those transitions,” he points out. “So what happened is a populist uprising against globalization; people came to believe it was benefiting only the rich and powerful and the elites.”

The right response, in his view, is to make sure that the benefits of globalization are more transparent and diverse supply chains become obvious and help more people. “The way to do that is to enable smaller firms to actively participate in the global economy.”

Now that we all live in a digital world, why does a firm have to be local, regional, or even national: why can’t it compete for business all over the globe? Why can’t small firms get giant Fortune 500 companies as customers? Why can’t a firm in Milan sell to a U.S.-based company that wants to do a marketing campaign in Western Europe

“So, we built an AI-powered platform to do that and when we took it out to the market and we talked to big companies, we said, Look, you ought to buy from smaller firms, you ought to buy from diverse firms. You ought to buy from local firms in the many countries in which you do business.”

“And that’s what we’re doing today. We have companies worldwide who now put billions of spend through our platform. We’ve built a transparent, fair, new ecosystem for how companies do business together, and I’m very proud of that.”

Empowering Every Employee To Make An Impact

Many believe that AI can globalize the economy in a way that means there are more participants than just large companies.

Reinforcing just how this really is Purpose in practice, it’s also a mission Joel’s employees believe in too. “I think the reason that we’ve attracted that talent is not just the size of the opportunity that we saw, but the importance of that purpose,” he says. “The idea that we could change how business was being conducted, that we could build a new ecosystem for global trade, that we could empower every employee in a company to do a better job for their company, and that we could create good new jobs in smaller firms as they grow by becoming global, makes all of our people feel good about how they’re using their talents.”

People want to have a purpose to their professional lives, and smart leaders are beginning to provide their people with platforms (opportunities) where they can begin to experience that. As more employees experience purpose, so will customers, suppliers, communities, shareholders and stakeholders.

And if Purpose can galvanize and inspire more leaders like Joel Hyatt and create more companies like Globality, then I think the idea will be with us for a very, very long time.