BUSINESS Purpose, Passion and Profit by Gugulethu Mfuphi

Purpose,Passion and Profit

“Secure the Bag” - this is a slogan that has become synonymous with today’s Millennials and Gen Z in defining their financial and business interests.

And while profits remain imperative for running successful operations, there is something entirely different about these generations that sets them apart. They are socially conscious. They are fully aware of the environment around them, given their heightened sense of awareness driven by social media and global connectedness. This has shaped their views on how they choose to become economically active, influenced their investment behaviours, brand preferences and which companies they choose to work for and align with. “Serving, fulfilling a purpose and making a difference in the lives of others” - these are often phrases that accompany the views of how younger generations opt to engage with a business.

This has supported a rising trend in which businesses, specifically those founded and led by younger generations, implement better policies to do “good business”. Despite the efforts of previous generations, Millennials and Gen Z’s are more deliberate in the role they play in being a part of the “solution and not the problem.” In a world where corruption and has thrived for so long, this has led to the question – can both profit and purpose drive the business agenda? Many would respond with an emphatic, yes!

Social entrepreneurship and Shared Value

Social entrepreneurship often is misunderstood - sometimes disregarded as the “softer” side of entrepreneurship, without the grit, effort, and overnight success stories we often hear about from profit-driven entities in the heart of Silicon

Valley. Generally defined as

“deploying entrepreneurial principles, processes and operations to address social challenges” and driving sustainable social change, Social

Entrepreneurship has been identified as a critical tool driving social development needs the world over and aligning to global policies like the Sustain-

Conversation Strategist, Broadcaster and Financial Journalist

able Development Goals. There has been a growing demand for the development and support of social entrepreneurs. Academic institutions like the UCT Graduate School of Business’s Bertha Centre for Social Innovation and Entrepreneurship, The Social Enterprise Academy and The Gordon Institute of Business Science’s GIBS Development Academy all have dedicated and accredited academic programs to advance social innovation and entrepreneurship.

Shared Value is a similar concept that is considered

by large local corporates— centered around a change in company policies, practices, and strategy that contribute to the competitive advantage while strengthening the company’s communities. Shared Value has been academically proven to derive sustainable long term profits for businesses and impact its broader focus on increased stakeholder value and not just shareholder value. This is a concept used by several South African businesses. Consider Woolworths in expanding its supply chain to include more black farmers to procure fruits and vegetables for its stores. Discovery, through its Vitality model, encourages customers to prioritise overall health care through its incentives model. New innovative private school models developed by Spark Schools – offering quality private education at a fraction of the market-related costs. Big business has benefitted from implementing these models and gained increased support from its stakeholders based on these different approaches.

ESG and CSI

ESG and CSI have become acronyms that also continue to feature in the financial results of big companies and future strategies of developing enterprises. Research conducted in 2019 by global advisory firm deVere Group found that 77 per cent of millennial investors prioritise Environmental, Social and Governance issues over returns when making investment decisions. The American Marketing Association report also revealed how younger employees have a keen and vested interest in the Corporate Social Investments that the companies and brands they partner with and participate in. Reports of this nature have allowed us to appreciate that for our generation, social entrepreneurship is not a “different” type of entrepreneurship but rather the only type that is recognised and respected. While CSI, ESG and Shared Value may all be separate concepts within the business community, they all speak to the common principle of ‘doing good’ - for the environment, for others and your business. For our generation, this is fast becoming the only way of doing business.

“Doing good business” is quickly proving to be the only business that makes sense as global regulators and governments look to respond with the necessary policy changes. According to the 2019 Trialogue Business in Society handbook, South African companies spent an estimated R10.2 billion in corporate social investment - marking a 5% increase from the year before. For these local large corporate, this spend is beyond the annual painting of the classroom and the delivery of food parcels, but a concerted effort to bring change in the communities within which they serve - in a sustainable manner. The Johannesburg Stock Exchange monitors and measures a company’s performance and investment in CSI and ESG initiatives through its SRI (Socially Responsible Investment) Index. Given the

current Covid-19 pandemic, stakeholders have increased focus on how these entities have managed the pandemic and its impact on their staff, communities and customers.

What does this mean for you as an entrepreneur?

Globally, there is a rising focus and shift towards businesses and entrepreneurs, who go beyond forecasting profits gains and market dominance. Rather, social impact, sustainable profits, and all stakeholder groups’ advancement over profits are the business’s new focus. So, in a world where: “securing the bag” remains a key goal and objective of the youth, as a budding entrepreneur, don’t underestimate the value of addressing societal needs and challenges through the businesses that you can create and partner with. Why change the world one Rand at a time, when you can change it… one person at a time?