Making the Shift to the Purpose Economy

In September, cigarette-maker Philip Morris International (PMI) announced its acquisition of Vectura, a British pharmaceutical company that specializes in medical inhalers. In the September 23 edition of The Economist, the weekly Bartleby column framed the deal as a rejection of stakeholder capitalism: “If stakeholderism had any teeth, this would have been the moment to bare them.”

As Bartleby rightly points out, while some three quarters of Vectura shareholders voted to approve the deal (perhaps driven by Vectura’s “ho-hum performance”), the naysayers’ arguments did not meaningfully introduce stakeholders into the debate. “If a high-minded portfolio manager held out from handing over his Vectura shares to PMI on moral grounds, he has been hiding behind a thick pile of glossy reports about the importance of ethical investing.” Zing!

But wait…. What of this comment, toward the end of the article:

“The purveyor of cigarettes has pushed hard into smoke-free products. This started with vaping, but is now extending to things that have nothing to do with nicotine. Buying Vectura, which will be run independently, is a signal that PMI is serious about that strategy. This seriousness of intent matters more to investors than Vectura’s narrow prospects.”

A close reread of the Bartleby piece unveils a clash of anticipation: “Whatever sense of purpose the research scientists toiling at Vectura may have had when it was independent is unlikely to survive intact becoming Marlboro’s sister company.” Perhaps. But what of this “seriousness of intent” to transform Philip Morris?

First, shift strategy…

Perhaps this deal conveys the moment that we’re in—a moment when shareholder-centricity is on the wane, but when stakeholder-centricity is not yet mainstream. Perhaps PMI is leading with strategy, stepping up to meet the demands of a new generation of stakeholders that expect more from companies like theirs. Indeed, as New Zealand moved late in 2021 to outlaw tobacco, it would seem clear PMI would be wise to accelerate its transition off nicotine and toward a healthier business model.

…then shift the narrative

Companies’ and leaders’ interest in social purpose is growing at an extraordinary clip. Consider that some 4,300+ companies have now achieved the challenging B Corp Certification, and some 200,000 companies have used the B Impact Assessment (the rubric on which the certification is based) to assess their social and environmental performance. Those numbers are double what they were just two years ago. And purpose continues to be on the lips of luminaries and the pages of vaunted business magazines the world over.

In November, Junxion co-produced Canada’s first summit on the purpose economy, in partnership with Social Purpose Institute at United Way and GLOBE Series. Over 300 thought leaders and committed learners from across the country and around the world joined for two full days of meaningful content to talk about the uptake of social purpose in businesses, business schools, industry associations, policy, and more.

The Rise of the Early Majority

This is the new story of corporate leadership—business as a force for good, as an economic influence that drives human health and well-being, environmental restoration and sustainability, and equitable opportunities for prosperity.

Junxion’s mission is to help leaders build the success stories of the next economy. Some of our clients are ‘social ventures,’ early or growth stage companies, led by visionary founders that started their businesses in part to solve for an environmental or social problem.

Other clients are larger, more advanced companies that are committed to this agenda. Some of these have been pioneers in socially responsible business such as The Body Shop. But many more—companies such as the insurance firm Howden—were not ‘born good’ but are interested to adopt social purpose and sustainability thinking and then integrate it across their operations.

In the framing of the market adoption curve, these companies are now the early majority. Social purpose business is no longer confined to the innovative leading edge or even the space of early adopters. So if your company hasn’t articulated and begun the work to operationalize its social purpose in 2022, you’re behind the curve.

Will you join Bartleby, looking for evidence that the status quo still reigns supreme? Or will you join the next economy?

Today, as we emerge from a restful holiday break, we’re rolling up our sleeves and readying to help companies make the leap to the purpose economy. As we look ahead to a bright new year, let’s shift our thinking toward what’s next….