International #YouthDay: Maximizing Both Purpose and Impact

A call to making an impact as a young person by +SocialGood Advisor Emmanuel Nyame

“Our Actions must be for impact but impact must also be for a purpose.”

Often times, impactful actions are the choice of many would be social advocates or enterprises. But, of course, who wants to devote time and energy towards something that does not guarantee significant impact or progress towards a better world; how do I reach the unserved in my community?; how do I track progress if my audience are not able to benefit from my actions in a positive way?

These are genuine concerns I must say, but on the other hand, how would you know you are making an impact with your advocacy, efforts, voice, actions and commitment towards a better world? Does that bother to you? What are the effects of your operations on the people you serve and the society or environment as a whole?

Putting Impact First

Traditionally, social enterprises separated their profit-seeking activities from activities aimed at generating positive social or environmental impact. The former represented the company’s core focus, while the latter was added on, generally in the form of a not-for-profit entity launched under the corporate social responsibility banner. Yet a growing number of social entrepreneurs and executives worldwide are no longer satisfied with this way of operating. They believe that financial profits and positive social impact are not mutually exclusive, and they aim to build powerful new business models that have a deeper purpose — to simultaneously achieve positive economic, social, and environmental impact. In other words, they seek to design and implement business models whereby impact-seeking activities amplify rather than sacrifice positive social impact.

A survey of nonprofits’ executives asked about their motivations for starting their initiatives and advocacy campaigns. Thirty-two percent said they had entered into the endeavors predominantly for purpose-driven reasons, whereas 58% cited a mix of impactful and purpose-driven reasons. Only 10% reported launching ventures purely for the money. But as we probed more deeply into the purpose-focused actions in this survey — and into the endeavors we encountered through our case work — we found that the meaning of “purpose-focused” often became blurred. In some cases, the ventures were truly central to the purposes (for example, a job-training organization creating employment opportunities); others were only loosely related (a children’s theater renting out costumes); for still others, there was a vague purpose-related element on top of the operation (a children’s choir starting an ice cream venture whose employees sing while scooping). The lure of potential “profits” not only distorts financial analysis but also thwarts an impartial evaluation of a venture’s purpose-driven contribution.

Putting Purpose First

“In Japan, there are more than 20,000 companies that are more than 100 years old, with a handful that are more than 1,000 years old, according to credit rating agency Tokyo Shoko Research….. There is even a specific word for long-lived companies in Japanese: shinise….Professor Makoto Kanda, who has studied shinise for decades, says that Japanese companies can survive for so long because they are small, mostly family-run, and because they focus on a central belief or credo that is not tied solely to making a profit.”

Combining Purpose with Profit

The aspiration, at least, is surely to build to last; to be a living company, a sustainable business which can endure into the long-term future. In today’s world of disruptive innovation, enduring businesses will have to reinvent strategy and activities on a regular basis. Having a clear long-term sense of purpose is all the more critical, if this is to be done successfully.

On the other hand, it is also critical not to discard effective management of finances that may accrue in our quest pursue the purpose of our start-ups. Let’s not forget the words of Mads KJAER, co-founder of MYC4…“Business must be for profit but profit must also be for a purpose.”

My message to all young people around the world is that although we are working to make the world a better place, let us ensure that we are making maximum impact at all levels, leaving no one behind. Let impact be your reason for deciding to help the vulnerable in society. I wish you all the best in all your endeavors. Happy International Youth Day!