Trust in Facebook has evaporated, according to a recent survey in Wednesday’s Financial Times. (17 April 2017). A year earlier nearly 80% of users said that they trusted the way Facebook handled data and protected their privacy. 12 month’s later the figure was barely 25%.
Facebook claimed to have a purpose beyond profit. Its goal, updated in 2017, is to “give people the power to build community and bring the world closer together,” Over the past decade, Facebook’s mission has been to make the world more open and connected. Going forward, however, Facebook will continue working to “give people a voice and help people connect,” but this new mission statement takes things a step further.
“Our society is still divided,” Zuckerberg wrote in a Facebook post. “I believe we have a responsibility to do even more. It’s not enough to simply connect the world. He went on to say that the “greatest opportunities and challenges” of the next generation — things like “ending poverty, curing diseases, stopping climate change, spreading freedom and tolerance [and] stopping violence” — will only be solved collaboratively, when groups and nations work together. Change, he added, has to start locally.
These words are welcome, and very familiar, closely tracking the statement of the eleven global business leaders a decade earlier who said in the Tomorrow’s Global Company report.
But, as has now become clear, Zuckerberg failed to match the company’s actions to his words. 98% of its income comes from its advertisers. In a choice between harvesting its users’ data for the benefit of advertisers and protecting those users as part of ‘creation of strong communities’ Facebook chose to please the advertisers and keep pushing the growth in sales.
Does this have to be the case? The answer is no. Companies with a purpose beyond profit are surviving and thriving in this age of disruption.
There are many examples of this in The Courage of their Convictions, a report which I have recently written for Tomorrow’s Company, in partnership with Danone. Here you can read about the experience of twenty companies, some younger than Facebook, and some over a century old. They all have it common a commitment to achieve something that is of lasting value to human beings – human beings as customers, as employees, and as members of society now and in the future, as well as human beings as shareholders.
There are young disruptive companies like Green Light Pharmacy who are not ashamed to say ‘We have a 100-year business plan! We aspire to be the John Lewis of the healthcare sector.’ Their founders were determined that their business was not going to add to inequality. They proudly tell the story of employee shareholders on a moderate salary who suddenly discovered that they could finance their offspring to go to university. Or Atom Bank, the first solely digital bank to have been granted a banking licence. Their mission is ‘to change banking for good.’. Their vision is ‘to be the first telepathic bank’. This means being so good at anticipating their customers’ needs that they really can get more from their money and pay less to borrow it. In January Verdict rated it the top challenger bank. Or Simply Business, a digital insurance broker which knows that it will be deploying artificial Intelligence but is determined to do so in a way that shares the benefits with employees – for example by cutting the working week of call centre staff without cutting their pay.
Can they keep it up? Yes, to judge by the example of long -established companies which have, for their part, insisted that their purpose extends beyond making money for shareholders. Philips, once an electronics company, has always committed itself to improving people’s lives. Now reinvented as a sustainable technology leader in health, it aims to improve one billion lives by 2025. Of course, says Philips, with a clear purpose beyond profit you still need a related business model that delivers the cash flow. But it’s that way round. As it also has been over decades for Danone, John Lewis, Mars, Tata and Unipart.
Don’t believe the cynics. It is possible to make enduring returns for shareholders and to be committed to making the world a better place. It is possible to line up shareholders behind a long-term purpose and deliver results without compromising purpose. But do learn from the Facebook example. If you declare a high-sounding purpose and then trample it under the hooves of impatient investors, it would have been better not to have declared it in the first place.
And there’s a sting in the tail of our work with Danone. Earlier this year the company commissioned a survey, across different companies in the UK, of managers below board level. A quarter of these managers (27%) said they would be likely to accept a salary cut to work for a company that has a clear purpose beyond profit.
A third (32%) would actually consider leaving their job if a greater purpose was unclear, while more than half (53%) would consider doing so if their company’s values and purpose didn’t align with their own.
So, the risk to Facebook doesn’t only come from being sued by users. It may not be long before that company suffers a draining of its talent as well as a dropping of morale. Talented people need to be able to believe in the organisation they work for. To retain them, organisations need to have the courage of their convictions.