There is a danger, of course, that the word ‘Purpose’ will also become threadbare with misuse. But Wood and McGibbon argue that companies are changing their mission and values to accommodate something larger than themselves. This new corporate idealism comes out of a sense of urgency because the world faces crises on a global scale: accelerated climate change, intolerance and xenophobia, new fears of nuclear conflict, deepening inequality and poverty.
The book tells us that for a long time there were only two types of companies: for-profit and non-profit. Wood argues that the time has come to have companies that are driven by the goal of doing well by doing good.
He calls Purpose the fifth ‘P’ in the 4P’s taught to MBA students: Product, Price, Promotion and Placement. He says the 4P’s no longer define what sets a company apart.
“Purpose can show a company is unique by helping attract more motivated talent, and by actually boosting business by bonding with customers,” Wood says.
The idea for Purpose, Incorporated came to Wood while fundraising for Room To Read. Business leaders who had donated to the program wanted him to speak to staff to motivate them about doing greater good to the world. He told them that purpose should no longer be an afterthought, but be “embedded in the DNA” of a company.
Soon, many companies around the world started to expand their small Corporate Social Responsibility departments to ensure that good work went hand-in-hand with profits by building bonds with customers, hiring motivated millennials and injecting a sense of purpose to their jobs.
Wood and McGibbon hasten to add that they are not trying to be only goody-goody. They interviewed hundreds of CEOs who have discovered that the higher calling of saving the planet, being less wasteful, treating workers fairly can give them a competitive advantage. Wood says he learnt all this himself while trying to run Room To Read like a business with strategic plans, KPIs, dashboards, hiring committed individuals and firing underperformers.
“The change I am most happy about is how what started out as one little library in Bahundanda in 1999 has become such a key part of the education system in Nepal,” Wood told us in an interview (watch video below). “When children learn to read bright colourful books to engage, it changes their mindset and allows them to get lost in a world that is different from theirs.”