Dialogue on Sustainability

Business with a Purpose

A letter to global thought leaders from Scott Johnson, Vice President – Global Environmental and Safety Actions.

Dear Friend:

We have long made the case here at SC Johnson that prosperity and responsibility can coexist. We’re encouraged as we see more and more companies subscribing to that philosophy and making business decisions that are good for the bottom line as well as people and the planet.

That very topic was explored in The High Purpose Company, a book published earlier this year and authored by San Francisco-based corporate strategist and researcher Christine Arena. The book examines the corporate social responsibility practices of 75 well-known U.S. companies and looks at the successes and failures of varied approaches to CSR, ultimately presenting evidence that a company can generate tremendous profit from responsible actions.

Ms. Arena graciously accepted our invitation to share her work with you, in brief, in the message below. I hope you enjoy reading Ms. Arena’s thoughts and encourage you to share her work with anyone who may be interested.

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Does Your Company Pass the Test?
By Christine Arena, author of The High Purpose Company

Is purpose invaluable to your company? This simple litmus test question draws a tidy line in the sand between true and false corporate responsibility and also illuminates the most compelling business case.

Although many companies claim to stand for a grandiose purpose that serves the common good, few companies actually absorb and reflect that purpose to the point where their own success depends on it, where it becomes a dominant force for corporate performance and development. In true High-Purpose Companies, the concept of a higher purpose—of somehow serving society or protecting the environment—is so integral to the fabric of the organization that if you removed that thread, the company would start to unravel. Without their purpose, these firms would have difficulty competing in the marketplace, or even surviving:

Pass the Litmus Test
Company - Higher Purpose:

  • GE - “Provide imaginative answers to the mounting challenges to our ecosystem.”
  • DuPont - “Create sustainable solutions essential to a better, safer, healthier life for people everywhere.”
  • SC Johnson - “Promote global well-being.”
  • Toyota - “Make sustainable mobility a reality.”

*For a full list of companies that passed the litmus test along with corresponding in-depth analysis, please refer to chapters 6-7 in The High-Purpose Company.

True High-Purpose Companies like GE, DuPont, SC Johnson, Toyota and dozens more outlined in my book exist to serve fundamental needs, such as the need to stop environmental degradation; to end poverty; to promote equality; or to create health, security and happiness. In contrast to the superficial needs catered to by so many other companies, the needs serviced by High-Purpose Companies tend to be deeply rooted throughout society. Thus, they are substantial enough to spur business performance over time.

For example:

  • At GE, the higher purpose of “providing imaginative answers to the mounting challenges to our ecosystem” or “ecomagination” exists in the form of products ranging from energy efficient dishwashers to hybrid locomotives and solar-powered water purifiers. Revenues generated from these products reached over $10 billion in 2006 and are expected to climb to $20 billion by 2007.
  • At DuPont, cleaner processes and scientific breakthroughs like Bio-PDO, an eco-effective polymer, reduced overhead by $2 billion, prevented 11 metric tons of CO2 from entering the atmosphere and also accounted for 17% of the company’s $26.6 billion in revenues. By 2010, DuPont aims to derive 25% of its total revenue through products that create a “better, safer, healthier life for people everywhere.” 
  • At SC Johnson, ongoing environmental management and Greenlist™ initiatives have thus far eliminated over 460 million pounds of manufacturing waste and removed more than 13.7 million pounds of volatile organic compounds from SC Johnson products. Going forward, the company plans to continue to “promote global wellbeing” by supporting cultural, educational and public health projects that improve stakeholders’ quality of life and by removing all toxicity and non-biodegradability from its household cleaning products. 
  • At Toyota, while a lean manufacturing process reduces waste by 86% and saves billions in overhead, the company’s aim to “make sustainable mobility a reality” gives way to creative leaps and technological breakthroughs like Hybrid Synergy Drive. By 2010, Toyota plans to sell more than 1 million hybrids annually while rendering the internal combustion engine obsolete.

A higher purpose makes each one of these companies literally worth more to shareholders and also, worthy of succeeding. While these firms might not be perfect, they succeed because society would be worse off without them.

And herein lies the business case for corporate responsibility.

Authentic High-Purpose Companies don’t invest in goodness for goodness sake. Nor do they solely preach about their values. Instead, they build value by answering to changing human needs; to shifts in the economy, society and the environment; and to emerging trends. They prepare themselves for inevitable turns and are the first to market with progressive solutions that are vital and necessary, not frivolous or easily replicated. It is not that they seek to serve society at the expense of shareholder interests. On the contrary, it is that they understand that in order to continue to serve shareholder interests, they must better meet the growing demands of society.

The astounding results generated by High-Purpose Companies reveal why any business, regardless of size or industry, can benefit from looking beyond that which is conveyed on a one-dimensional balance sheet. Making money is undoubtedly a rule of the game of business, but to succeed in the long-run, business leaders need to ask themselves: “What’s the point?”

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About the Author
Christine is the award-winning author of two books, Cause for Success: 10 Companies that Put Profits Second and Came in First (New World Library, November 2004), and The High-Purpose Company: The Truly Responsible (and Highly Profitable) Firms that are Changing Business Now (Collins, January 2007), from which this essay is adopted. Through her books, Christine’s primary objective is to enable readers to easily distinguish between true and false corporate social responsibility (CSR), or winning versus losing strategic approaches. She is a frequent speaker on the subject of CSR effectiveness to corporate and academic audiences worldwide. Additionally, Christine serves as a strategic partner to change management consulting firm Interaction Associates, and sits on the advisory boards of green business ventures IdealBite.com and Urban Re:Vision. A masters graduate of New York University, she lives in San Francisco with her husband. Her website is: www.high-purpose.com

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