The heart of the matter

We are all familiar with the 5 Ws and 1 H approach, made famous by Rudyard Kipling’s quote: “I keep six honest servants, (They taught me all I knew); their names are What and Why and When, And How and Where and Who.” Amongst these, the most profound and hence most effective is “Why”.

Every business has its what (business direction), where and when (targets) and who (people). But it is the “Why” question that is the most crucial. A sound answer captures the business’s purpose and provides a robust foundation for the business to flourish.

Purpose can be defined as the guiding principle that directs the business’s actions: It is the reason behind its existence, not just in the market, but in society as a whole.

Wide sweep

How wide is the purpose sweep?

There is a fallacious notion that a business can exist solely for its shareholders and promoters. However, no business can be an island; all are an integral part of society. Hence every business should exist for all its stakeholders, starting with its own employees — consumers, associates, shareholders and finally the community in which it operates.

It is important to realise that stakeholders are closely linked to one another. They all form part of an ecosystem and are, therefore, inter-related. Any business which neglects a stakeholder or concentrates more on a particular stakeholder runs the risk of an imbalance that would eventually lead to a backlash.

A quick look at the history of business scams will easily reveal this. In each case, one would find that pandering to only the shareholders or showering special affection on senior managers led to the ultimate bust. If a business has to grow tall, it must take deep roots through a strong sense of purpose. It needs to have in place an engaging narrative that rests on a fair and ethical foundation. It has to define its purpose, and link it with the significant role it can play for the whole ecosystem — all its stakeholders.

Helps business

How did purpose help our business across the ecosystem?

At Marico, our purpose has defined our reason to exist; we have always believed that we exist not just for our business promoters but for all our stakeholders. We believe we have the responsibility of creating and distributing value to all our stakeholders.

Consumers do not just buy our brands, they partner with us. The relationship has to go beyond mere transactions into the realm of trust and warmth. It is important that the brand adds value to the life of the consumer. Initiatives such as the Saffola Healthy Heart Foundation have made us a part of our consumers’ lives. We have worked to highlight the incidence of cardio-vascular diseases in India through free heart health and cholesterol check-up camps, organised walkathons and talks, and reached out to over one crore people to build awareness of the risks at hand. Our Dial-a-Dietician programme went a step further and gave them practical ways to take action, change the lifestyle and lower the risk of cardio-vascular diseases.

Marico’s brands are the life-line to its consistent business performance and we recognise that our associates are as critical to our success as our employees. We treat our key associates as our own members. Our media, research, PR and creative agencies are invited to internal leadership training sessions, R&D workshops and networking events to sharpen skills so that they realise their true potential and continuously improve their capability. This adds value to them as professionals

Take the example of the farmers who supply us safflower, the oilseed that goes into Saffola. We have integrated them with our purpose such that the relationship goes beyond just fulfilling our sourcing needs reflected in the farmers’ market. Thus, Marico representatives work with farmers to improve crop cultivation that has so far led to a 20-25 per cent jump in their productivity. We have developed a contract farming model which gives them a rate assurance along with technical guidance throughout the crop cycle.

Why purpose?

Why do businesses need a purpose?

More often than not, the idea of integrating all stakeholders with the business is dismissed as being impractical or not making “business sense”. But this is not true — any business that does not account for all its stakeholders runs the risk of unsustainable growth. Once we acknowledge the inter-dependent nature of the society that houses the business, one must seek to achieve a balance that drives business profits in a responsible fashion.

How does one do that? By defining one’s purpose. Aligning one’s goals in line with those of all stakeholders ensures consistent progress of the whole ecosystem. And that is in the long-term interest of all.

The best-seller, ‘ Firms of Endearment echoes the same sentiment. It talks about how when a set of publicly traded ‘Firms Of Endearment’ (FOEs — simply put, companies that provide value to all stakeholders) were compared with the 11 good to great companies (covered in the management book by James C. Collins), they found that over five- and 10-year horizons, the FOEs outperformed the good to great companies by 128 to 77 per cent and 1026 to 331 per cent, respectively.

The book demonstrates how firms that endear themselves to their stakeholders, cultivate emotional bonds with their customers, employees and suppliers, reap benefits of superior offerings and responsiveness.

How do people relate to the purpose of the business?

It is critical for each business to have a purpose. And it is important to articulate it to the people who are the stakeholders. To start with, it is imperative to ensure that employees resonate with that purpose.

Once you do that, employees find a new source of energy, which comes from working on personally fulfilling missions. They draw this energy from within, making them truly satisfied with the work they do.

Sense of belonging

Such alignment of purpose is facilitated by a sound organisational culture, in which employees feel a sense of belonging.

In such a culture, with growth opportunities for all members, higher levels of personal motivation and volition prevail. Employees rise to their potential and give their best to the business. That in turn helps them to satisfy the consumers, keep them engaged and loyal.

This reflects in better business financials, better growth and better value creation. All this leads to a stronger, larger and more profitable business that can meaningfully contribute to community and society.

The whole ecosystem thus plays to its potential, creating benefits all around. It’s a virtuous circle in which all stakeholders benefit, through maximisation and leveraging of their potential.

Our philosophy at Marico to “Be more, every day” was created with this intention — to transform, in a sustainable manner, the lives of all those we touch, by nurturing and empowering them to maximise their true potential.

We realise that as our stakeholders become conscious of Marico’s higher purpose, it reverberates across the whole business ecosystem and the width of the potential only multiplies manifold.

John Mackey, CEO of Whole Foods and author of the book Conscious Capitalism , sums this up well: “To tap this deep wellspring of human motivation, companies need to shift their emphasis from profit maximisation to purpose maximisation.”

(The author is Chairman and Managing Director, Marico Ltd.)

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