Economist Marci Rossell gave a speech in Dallas last week in which she noted that there were two great innovations in the last 40 years that truly drove corporate productivity.
The first was technological: Individual workers gained access to computers. PCs took their place broadly in corporations around 40 years ago.
The second was managerial: Corporate-wide data-driven quality management became ubiquitous about 20 years ago.
The next great innovation theme will be driven by the demands of millennials, and it will be a wave of business purpose innovation.
I believe the next great wave of innovation is upon us — but the innovation is not technological. It is not AI or automation or robotics.
The next great innovation theme will be driven by the demands of millennials, and it will be a wave of business purpose innovation.
Traditionally, the purpose of a business has been to earn profits for shareholders by serving the needs of a market. Millennials are now reshaping that purpose — in fact, they’re creating a new kind of authentic, purposeful role for business.
A Global Community
We’ve all (frequently) heard criticism of millennials as “entitled” or “lazy.” Working in and with purpose-based companies, my experience is the opposite. Millennials are inspired, committed, and hard-working — when the work is meaningful.
They’ve grown up in a global community, in which caring about a neighbor no longer means just the area surrounding your home. When they think of service, they see global issues as well as hometown needs. If you engage them in purpose areas such as alleviating poverty, reducing sex trafficking, proving solutions for clean water, or changing a bad environmental policy, you will see them work — and sacrifice — with passion.
To satisfy the millennial, business must now become a core participant in serving the key needs of humanity — short-term and long-term, local and global.
Ascribing entitlement to millennials is a misreading of their demand for authenticity and meaning. To satisfy the millennial, business must now become a core participant in serving the key needs of humanity — short-term and long-term, local and global.
In the past, the needs of shareholders, customers, and employees have been in competition with one another. Millennials erase these lines by recognizing that they play all three parts, and they demand an authentic purpose in all of these roles.
Under this new dynamic, the business models that once balanced this competition no longer work. We can already see the old models fraying at the edges as managers struggle with how to attract top talent, and companies wrestle with how difficult it seems to be to create consumer and employee loyalty.
Business Purpose = Authentic Purpose
In order to transform a business into a true participant in the core needs of our world, brand new business models are needed. It’s no longer enough to donate, to volunteer, to cause-market, to “do employee engagement,” or to put on commercials about something positive that the company has done recently. CEOs are frustrated that all this side-effort isn’t working. That’s because the efforts aren’t authentic and core to the business. Side-efforts aren’t purpose.
Side-efforts aren’t purpose.
When brave and innovative leaders embrace the understanding that the whole purpose of our companies has to change, the business purpose revolution will begin, allowing new business models to emerge and compete. A new wave of transformation in the economy will begin, led by business.
Dallas is demonstrating its own examples of such models:
The purpose of Soap Hope is to end poverty for women. Its purpose is not to sell the top organic body care products at great prices — even though it does — that’s just the means to the end.
The purpose of Cafe Momentum is to transform the lives of at-risk youth. Its purpose is not to serve you the best upscale smoked fried chicken of your life — even though it does — that’s just one tool it uses to achieve its mission.
The Good Returns core business model applies 100% of the economic output of a company to solve key problems of humanity. This innovation causes every action of a company and its shareholders to align with solutions to the great human challenges of our time.
Business is the most important force we have for addressing the world’s pressing needs.
These are the kinds of purposes we will begin to see, not as marketing slogans (millennials see right through them), but as core reasons for the existence of businesses.
Business is the most important force we have for addressing the world’s pressing needs — more than philanthropy, more than government, more than NGOs. But to unleash its potential our business models must dramatically evolve. And they will — faster than most people realize.
Millennials — their demands and their innovations — are already making it happen.
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