Joel Hyatt (left) and Al Gore of Current TV accept the Interactive Television Service Award. … [+]
For five years, the concept of “purpose” has been at the center of the American business debate, even as other timely concerns, such as fighting inflation, have emerged.
Recall the famous decision of the Business Roundtable in August 2019, which formally redefined the overall purpose of corporations as promoting “an economy that serves all Americans.” Signed by 181 CEOs of major US companies, the decision is based on the idea of leading corporations in the interest of all stakeholders: customers, employees, suppliers, and communities. do not have Only shareholders.
Tricia Griffith, president and CEO of Progressive Corporation and leader of the Business Roundtable, summed up the essence of the Roundtable’s internal discussions that shaped their stance: “CEOs work to generate profits and return value to shareholders, but the most well-run companies do more than that. They put customers first and invest in their employees and communities. After all, that’s the most promising way to build long-term value.”
Most observers noted that determining purpose as the official “end goal” of a public corporation marked a major shift from traditional capitalist thinking — after all, Milton Friedman famously stated in 1970 that the sole responsibility of any corporation is to increase profits, an idea that has dominated executive thinking ever since.
What’s changed since 2019? The global pandemic and ensuing health crisis has redefined how we think about responsibility, leadership and the nature of society. For example, Business Roundtable members have committed a combined $863 million to COVID-19 response efforts, demonstrating a shift in how companies perceive their role during the crisis.
However, in the current economic and social turmoil, it is questionable whether the concept of “purpose” retains the same resonance as it does in current periods of supposed relative stability.
Will the pursuit of purpose have the same impact in these turbulent times? Certainly stakeholders have pointed out the complexities of making ideas work in practice, so I also wonder whether purpose can be scaled in multinational organizations.
For example, in 2023, Unilever CEO Hein Schumacher said in the company’s annual report that the company’s focus on “purpose” is laudable and that it “must never be lost” as it inspires many people to join and stay with the brand, but he also warned that “I don’t think you can advance purpose by forcing it on every brand.”
This sentiment appears to be shared by others: A survey of 1,000 business leaders conducted in 2023 found that 70% agreed that its importance has increased over the past five years. Additionally, 89% of CEOs contacted said their organization has a clearly defined purpose, but only 63% use it to inform business decisions.
The increased emphasis on ESG (environmental, social and governance) considerations can confuse the discussion: Is your objective essentially to address those metrics? Or is it more focused on fostering a good EX (employee experience) and making your team feel fulfilled at work? Or is it a strategic effort to demonstrate a meaningful ethos that resonates with younger and newer employees?
We want purpose in business, but we may not yet know how to operationalize it and make it part of our daily lives. Perhaps we are calling for a shift from the original definition of purpose to Purpose 2.0, as the Business Roundtable calls for. Reports like this make us wonder if the lofty original intentions of companies like Google and Apple are anything but.[To] “It organizes the world’s information and makes it universally accessible,” (Apple)[To deliver] technology [to] The mission statement of “enhancing humanity and enriching people’s lives in whatever way they desire” has led to a disconnect in purpose.
What can serial entrepreneurs teach us about purpose?
I think purpose is a great idea and I agree that it should be a deliverable, but maybe it’s a concept that needs to emerge naturally rather than be forced. That said, I do agree that at the heart of any business proposal there must be a commitment to making a positive impact on society.
I don’t have a final answer to the question of purpose, because I believe and teach my executives that purpose at work is fleeting for employees and needs to be personally inspired and nurtured, in each person’s situation, in each season. You have to bring your own sense of purpose to work, and one of the ways I teach this is by playing with and juggling fleeting experiences that are tied to fun, money, and impact.
As well as teaching this and gaining experience running a company as a serial CEO, I have met and interviewed dozens of CEOs and serial entrepreneurs, including John Chambers, Sridhar Vembu and Bracken Darrell, who have impacted business, society and employees, to gain a deeper understanding of what can be done to make the Business Roundtable’s slogan a reality.
I spoke with Joel Hyatt of Hyatt Legal Services fame. Over the past few decades, Joel’s disruptive startup businesses have brought about profound change in the worlds of law, media, and now technology. He has effectively democratized legal services. As recently as the 1970s, lawyers were not allowed to advertise, but he almost singlehandedly broke this antiquated prohibition, finally giving the general public easy access to quality legal help on the open market.
His success is just beginning: After winning an antitrust lawsuit that tore down the big media establishment and rules, he co-founded Current TV with Al Gore. From 2005 to 2013, Current TV pioneered user-generated content, winning multiple Emmys, Peabody Awards and Livingston Awards and attracting investments from Comcast and DirecTV, among others.
Not content with having made a positive impact on stakeholders in two pillars so crucial to American life and business, Joel decided to tackle another area: procurement, and procurement is exactly the area he needs an Emmy for.
Procurement may not seem like the most sexy thing, but it’s actually a crucial sector that, if reformed properly, could significantly improve the working lives of millions of people. At the same time, it offers unprecedented opportunities for small and medium-sized businesses (SMBs) to win lucrative contracts with larger companies that were previously invisible to them.
Using AI to solve social problems
Joel’s latest venture, Globality, is dedicated to streamlining and enhancing the procurement process for enterprises. The company leverages both machine learning and generative AI to deliver a completely unique service it calls “autonomous self-service sourcing.”
And what’s interesting is that this isn’t some VC-backed startup jumping on the AI bandwagon in 2024. Joel has been slowly developing this solution over years, learning what works and what doesn’t, and more importantly, garnering an impressive global client list that includes Fidelity Investments, T. Rowe Price, Adidas, BT, Tesco, Santander Bank and more.
As Friedman puts it, are companies just ventures with the goal of making money? The answer is yes and no. Joel saw opportunity. But it turns out that purpose has been a priority at every stage of his career. He says, “There’s nothing more exciting than taking an idea and bringing it to life, building something that matters, addressing a need that matters, building a team, creating a culture, adding value. But in every case where I’ve started a company, what was really key was identifying a social problem and believing that there was a private sector solution that could address that problem and have a positive impact. That’s where all of my business stories started.”
There are undeniable frustrations with the democratization of the industry
The origins of Globality again stem from a social question: how can we make globalization work better? In other words, how can we make the benefits of globalization penetrate deeper into the world economy, helping more people and businesses?
“Globalization has undoubtedly benefited many people,” he says. “It has lifted more than two billion people in the developing world out of poverty. It has lowered the cost of goods and services around the world.”
“But in the dramatic shift from a national economy to a global economy, from a manufacturing economy to a service economy, from an analogue economy to a digital economy, many people have become lost.”
Joel points out that people adversely affected by the forces of globalization have seen many of their high-paying, middle-class jobs disappear. “Public policies haven’t done much to help them through the transition,” he says. “So we’ve had populist revolts against globalization, and people have come to believe that globalization only benefits the rich, the powerful, the elite.”
In his view, the right response is to make the benefits of globalization more transparent and diverse supply chains more visible so that they can benefit more people: “The way to do that is to enable small and medium-sized enterprises to actively participate in the global economy.”
With all of us living in a digital world, why does a business have to have a local, regional or even national presence? Why can’t they compete for business around the world? Why can’t small businesses become giants? Fortune 500 Why treat businesses as customers? Why can’t a company in Milan sell to a US company that wants to run a marketing campaign in Western Europe?
“So we built an AI-powered platform to do that, and when we put it on the market and talked to big companies, we said, you should buy from small companies, you should buy from diverse companies, you should buy from local companies in the many countries where we do business.”
“And that’s what we’re doing today. Companies from all over the world are spending billions of dollars through our platform. We’ve built a new ecosystem for companies to work together and do business that’s transparent and fair, and I’m very proud of that.”
Empowering every employee to make an impact
Many believe that AI will globalize the economy, resulting in more participants than just large corporations.
This is both a practical objective and a mission that Joel’s employees believe in. “I think the reason we attracted such talent is not just the magnitude of the opportunity we saw, but the importance of the objective,” he says. “The idea that we can change the way business is done, that we can create a new ecosystem for global trade, that we can empower every employee in the company to do a better job for the company, and that we can create good new jobs for small businesses that grow through globalization gives all of our employees a sense of satisfaction in how they are utilizing their talents.”
People want to have purpose in their professional lives, and smart leaders are beginning to provide the platforms for their employees to experience it. As more employees experience purpose, so will their customers, suppliers, communities, shareholders and stakeholders.
And if Purpose can inspire and inspire more leaders like Joel Hyatt and create more companies like Globality, then this idea will stay with us for a long time.
