The dismissal of Danone’s CEO & Chairman Emmanuel Faber has recently sparked a lot of heated and interesting debates, polarised between those who hold to the old Friedman model, according to which the sole purpose of the corporation is to enrich the shareholders, and the proponents of a progressive much-needed progressive version whereby there is more to business than profits and organisations are a tool for changing the world.
There is a very easy shortcut that is currently being made by some who jump to the conclusion that “purpose-led” companies don’t work economically. Yet, there a wealth of literature (from HBR to McKinsey and much more) and concrete cases of success (Patagonia, Gore, IBA,…) that prove otherwise.
But, as Albert Einstein said: “it is harder to crack prejudice than an atom.”
This interesting article by the Financial Times attempts to decipher the "Faber case".
But even more interesting than the article itself are the comments left below it. Apart from one reader - who tries to bring nuance to the debate -, I am quite appalled to see that most readers still defend the “good old days” of thinking about the role of a company.
I am totally convinced that today a company starts and ends with its purpose.
Defining it and aligning the strategy and the organisation to the purpose is the only way to make People, the Planet and Profit thrive. Profit is a consequence of a well-aligned company not a goal in itself. With one caveat, the purpose must be authentic (not marketing) and consciously lived and nurtured by all the stakeholders in their daily (inter)actions.
Let us highlight the very promising French initiative of the 2019 “Loi Pacte” which encourages companies to define their “raison d'être” or purpose, thereby supporting the principle that "companies are not limited to the pursuit of profit.
The company must be the place where its value is created and shared".
What's your take on the subject?
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