What would happen if your company disappeared?

Yes, I know what you’re thinking—it would be a disaster: layoffs, factory closures, unpaid suppliers, and a whole series of calamities. I know it, I’ve lived through it… But let’s analyze this from the market’s perspective, from that of the consumer and the community. The first question we should ask ourselves is: What does my company really contribute to the world? What need does it fulfill? What added value does it bring better than the competition? If your company is still around, there are probably positive answers to these questions. But are these truly the honest questions we need to ask to evaluate the viability of our business?

Let’s take a step back: What is a company? Or better yet, Why do we need companies? A company is an organized entity engaged in economic and commercial activities aimed at producing goods or services and generating profit. Companies are essential to the economy and society for several fundamental reasons: creating jobs, meeting citizens’ demand for goods and services, contributing to GDP, etc. In short, a company should be a driver of social well-being for its community.

So, how is it possible that after 200 years of industrial and technological revolutions (and with unprecedented societal progress), social inequality continues to rise, and rampant environmental degradation now threatens the very survival of the human species?

• Social inequality: 1.5% of the world’s adults hold 47.5% of the wealth (the “rich”), while 40% of the global population (the “poor”) hold only 0.5%, and the gap widens year after year.
• Environmental degradation: By June, we exhausted all the natural resources required to meet the ever-growing consumption demands of the planet’s inhabitants. We would need 1.7 Earths to sustain current demand, and each year we deplete resources sooner.

What’s happening is that companies have lost sight of their original purpose and are solely focused on maximizing short-term results. I don’t like to generalize, but this is the harsh reality.

I’m a third-generation entrepreneur and economist, but the truth is we’ve been “mis-educated” to only make money. Every standard of success is based on the “how much,” not on the “how” or “why.”

And that’s where the big question lies: What would happen if your company disappeared? Honestly, what social or environmental problem does your company solve? If there’s no clear answer, then most likely, nothing would happen if your company disappeared!

It is urgent that companies, their owners, and executives become aware of this and evolve their businesses toward the purpose-driven economy.

The Purpose-Driven Economy:

The purpose-driven economy is a business and economic approach that goes beyond the sole pursuit of financial profit, integrating social and environmental goals into the core of the business strategy. This approach is based on the belief that companies should contribute positively to society and the environment while generating economic value—often referred to as the “three Ps” (people, planet, profit).

Purpose-driven companies, which integrate social and environmental goals into their strategy, gain several benefits that can positively impact both the business and society as a whole. Below are some of these benefits:

Improved Reputation and Customer Loyalty

• Reputation: Companies with a clear and positive purpose enjoy a better reputation among consumers, which can translate into greater trust and loyalty.
• Customer Loyalty: Consumers are more likely to be loyal to brands they perceive as responsible and ethical.

Attraction and Retention of Talent

Purpose-driven companies attract employees who seek to work in places aligned with their personal values. This is especially true for younger generations, such as millennials and Generation Z, who value corporate social responsibility.

• Employee Retention: Employees who feel their work has meaningful purpose tend to be more engaged and loyal.

Innovation and Sustainable Growth

• Innovation: Purpose-driven companies often foster a culture of innovation, as they seek new ways to address social and environmental challenges.
• Sustainable Growth: These companies tend to be more sustainable in the long term, as their focus on social and environmental responsibility helps them adapt better to regulatory and market changes.

Strong Relationships with Stakeholders

• Investors: Investors are increasingly interested in supporting sustainable companies. Investment funds focused on environmental, social, and governance (ESG) criteria are on the rise, making it easier for purpose-driven companies to access capital.
• Communities: Companies that invest in their local communities can build stronger relationships and gain community support, which can be beneficial in terms of permits and local acceptance.

Resilience and Risk Mitigation

• Resilience: Purpose-driven companies are more resilient to economic and social crises because they have a long-term focus and a committed stakeholder base.
• Risk Mitigation: By addressing social and environmental issues, these companies can reduce risks related to reputation, regulation, and operational sustainability.

Conclusion

Let’s make businesses essential in solving the great social and environmental challenges, ensuring they remain engines of well-being for future generations by distributing wealth ethically, caring for the most vulnerable, and regenerating the planet.

We must have a purpose and live it as a reason for being, as human beings who care for others and the community… that’s what business success truly is!

Purpose-driven companies not only contribute positively to society and the environment but also gain competitive advantages that can lead to greater long-term success and sustainability. Integrating social and environmental goals into business strategy is increasingly recognized as essential for growth and resilience in today’s market.

In the coming decades, much like the industrial and current technological revolutions, the world’s leading companies will be purpose-driven companies with positive social impact, or there simply won’t be a planet left to compete on.

A better world is possible with businesses and leaders with heart. Welcome to the social and environmental revolution.

Ángel Bonet
Founder of ImpactCo.