• Home
• /
• Opinion

Ethical is new normal for youth in business

Youngsters expect companies to do some soul-searching and make a social impact.

"The Amazon is burning", said my son.
I immediately assumed that one of the warehouses of Amazon had caught fire.
"There is a fire raging in the Amazon rainforest, and no one seems to care," he clarified.
I promptly googled to find the horrific pictures of the forest inferno. Brazil's National Institute for Space Research estimates that more than one and a half soccer fields of the Amazon rainforest are being gutted every minute. As one of the greatest treasures of our planet is turning to ash, one wonders what kind of legacy we are leaving behind for the next generation.
Like my son, many young people are worried about the world they are inheriting. They are acutely aware of the enormity of the task ahead to correct the socio-economic and environmental damage that we are bequeathing to them. How will they fix what we broke? 
Well, they seem to have a plan. Millennials and Gen Z are looking very closely at the purpose of companies that they would work for. Purpose is an intent to change something that is larger than the business itself. Companies are doing some soul-searching because their traditional objective of doubling and quadrupling shareholder value has done precious little to maintain their long-term relevance. Ask billionaire investor Warren Buffet. Not to mention angry non-government organisations that are holding companies responsible for the degradation of the planet and communities.
So, what is new about this? Earlier companies were simply expected to not be unethical. So long as you did not murder, steal or hire slaves to make your products, you were fine. But now companies are expected to do good. CEOs actively talk about the greater good or making a social impact. This is why Google replaced its initial motto 'Don't be evil' with 'Do the right thing'. So far, companies have run their 'purpose' agenda through Corporate Social Responsibility programmes that basically allocated the government mandated share of their profit for social work. That was closely tied to their business, meaning their social work was within the ambit of their business coverage that made for good PR. Things have changed.
Employees of companies like Google, Amazon and Facebook are increasingly holding their organisation accountable. In these companies, employee activism is not about pay hike but about social change. They feel that the company needs to adhere to a higher standard. But that won't happen unless everyone gets behind the purpose.
How do you get individuals to function with purpose? Not through lengthy power point presentations or The-Wolf-of-the-Wall-Street style inspirational speeches. But by leaders taking day-to-day decisions that reflect a higher standard of truly changing the world. It starts with the CEO and percolates to the next rung of management and so forth, thus creating a pervasive culture of purpose in the organisation.
When employees start to remind you that a certain action is not in line with the values of the company, you know that you have set up a culture of purpose in your organisation. You also know that they are an inspired lot.
Author of The Purpose Economy, Aaron Hurst calls out three types of organisations that have self-awareness about purpose - values-driven, excellence-focused and impact-driven organisations. Whether you make mundane products or glamorous ones, you can ask yourself what purpose does your product serve? Authenticity comes from ensuring that purpose is organic to your business and not added as garnish for PR purpose. It also comes from being transparent about the dilemma you face when choosing a difficult purpose-driven path over a short term easy one.
However, in this period of economic uncertainly across the world, do we have room for a purpose-driven organisation? Can you have a purpose and make money? Pepsi's former CEO Indra Nooyi thinks so. She set Pepsi on the journey that she called 'performance with purpose'. She felt that this corporate mission was reinforced during the economic downturn of 2008-10. Her team realised that it was even more important to focus on environmental sustainability because it helped to save on cost.
It does get harder when companies are going through a rough patch. How do you inspire employees to work to their full potential? Purpose could be the reason to come to work each day even when the chips are down.
There is business pragmatism about having a purpose. The consumers' collective conscience is determining purchase decisions. In particular, millennials and Gen Z want to buy from companies that are replenishing the environment or addressing human problems. Conscientious product development and marketing matter today.
In the larger scheme of things, it is even more important because the notion of a welfare state is becoming untenable. Now the state offers citizen services at a cost and looks a lot like an efficient corporation. Therefore, it is all the more important for private enterprise to share the responsibility of serving the society.
Businesses need to find their true calling that will give them sustained growth. Nike found its calling in racial equality. Whole Foods found its calling in nourishing people and the planet. What is yours?
Shalini Verma is CEO of PIVOT technologies