Britain must reinvent itself as home of the purpose economy: Latest City A.M. column from Seven Hills Co-founder Michael Hayman
The following article from Michael Hayman MBE originally appeared in City A.M.
Every business is a spin of the wheel, a bet by its founders on an idea.
No guarantee of success, only a hunch that you might have an idea that can make it.
It’s the story of so many of the UK’s most successful firms, and it is the challenge Britain will face as a startup nation reinventing itself in the post-Brexit world.
The wager we place on ourselves will determine the prospects of generations to come – getting our stake right is the challenge of our times.
So if you want to back Britain, take a look at the rise of purpose-led firms around the world and consider the potential payoff for the UK as the home of the purpose economy.
Key to this is winning the debate about business being a potential force for good. It’s about (to paraphrase the 45th President of the United States) making capitalism great again.
The idea of capital seeking a more meaningful home for investments is a counter-cultural movement fast gaining ground, yet until recently it seemed like it might never go mainstream. That all changed earlier this year.
“Society is demanding that companies, both public and private, serve a social purpose,” wrote BlackRock founder and chief executive Larry Fink in January.
In a letter to some of the world’s biggest public companies, Fink declared: “to prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society”.
Those who dismiss this as pure rhetoric miss the seismic shift that is happening on both sides of the pond.
In April, Legal & General’s asset management chief, Helena Morrissey, announced that the firm would “name and fame” its most green-friendly companies, and last week she revealed a further £50m “Girl Fund” to invest in businesses with a strong gender balance.
This is happening just as we see the private sector playing an ever-more a more vital role. Of the world’s largest 100 economies, 69 are corporations rather than nations – how these firms step up is more than just a talking point.
Business is the leading innovator in solutions to illness, travel, housing, and social welfare – to name just a few areas of its growing influence. This is not to say that government does not have a role, more that business today has a unique opportunity to make a meaningful difference, more so than any other generation.
For those looking for the opportunity to rehabilitate capitalism, this is it.
And it could not be more necessary. Whole Foods founder John Mackey told me that it might take a generation, but very soon consumers will expect all businesses to have a more conscious connection with the welfare of their customers and employees.
The new driving force for this change is the rise of the millennials, the most connected, socially aware generation in history.
By 2025, 75 per cent of the world’s working population will be made up of this generation, in control of the levers of economic, political and social power.
Talent has leverage. Ask nearly any leader of a growing business what keeps them awake at night, and the answer will be the ability attract and retain great people.
Talent is the new oil, and it is those firms which can attract it that will create the new rushes of opportunity. It is dawning on business leaders that if they want this generation to drive their companies forward, purpose needs to be a priority, not an afterthought.
Which brings us back to the bet. Britain could – and should – wager on future business success that depends on the healthy relationship between profit and purpose. This is a hypothesis that views the future as a meaningful entrepreneurial economy, where people seek purpose in the companies they buy from and work for.
This should be at the heart of what Britain aims to be post-Brexit. If closing the doors was the least attractive part of the case for leaving the EU, the most attractive was the prospect that life outside of the EU would lead us into a more global, free-trade Britain.
This new Britain – more independent, less regulated – should take the opportunity to be more experimental.
We often hear how the UK could evoke the Singaporean spirit and become Europe’s offshore haven. But if the Asian tiger is best known for its tax-cutting credentials, what if the Brexit British lion used tax breaks and incentives to centre itself as the world home of the purpose economy?
It could reinvent Britain as a challenger, a startup nation, a home for change-makers – a signal to the world about how we make capitalism great again.
That is the bet worth making.