Ideas that matter

Innovating with purpose: A generational shift to making profit while making an impact

By Colin Douglas, Rik Kirkland and Crystal Ball

Innovating with purpose in various forms took centre stage when a group of interesting people from different walks of life gathered on a hot summer night in Cape Town to take part in a carefully curated Ideas Salon hosted by Douglas Knowledge Partners (DKP) and the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town Graduate School of Business.

Guests enjoyed an enriching evening of sharing views and experiences on the role purpose plays, not only in the business world but also in the creative industries. They also looked at the importance of being able to make a profit in order to be able to make an even bigger impact in a wider sense.

Colin Douglas, founder and Chief Knowledge Partner at DKP, set the scene by explaining that the Cape Town Ideas Salon followed a successful similar event DKP hosted in London - where it has a branch - in April last year. Attendees at the London event commented how much they enjoyed the engaging conversations, leading to some great ideas, and requested DKP to host more such events.

"In the traditional sense, hosting a salon is where conversations happen over good food and wonderful art - but with a purpose," Douglas told the Cape Town guests. Furthermore, DKP chair Rik Kirkland - a former editor of Fortune Magazine and former head of global publishing at McKinsey - flew in from London to moderate the Cape Town event.

"One of the fundamental questions when it comes to purpose in the business world is what the relationship is or should be between purpose and profit. Is it a case of either or? Can they go hand-in-hand?"

- Rik Kirkland, Douglas Knowledge Partners Chair

Purpose for profit and social impact

“While you’re thinking about profit, think about what is the social impact that you're having and how you can create some kind of social impact."

- Solange Rosa, director of the Bertha Centre.

Kirkland kicked off the discussion by sharing his hypothesis that a "correction" is taking place in the corporate sphere regarding the concept of "purpose" - a type of change of direction by big business from seeing their purpose only as maximising total return to shareholders, to a realisation that a company cannot regard itself as successful unless it is also committed to something bigger than itself.  

One of the fundamental questions when it comes to purpose in the business world is what the relationship is or should be between purpose and profit. Is it a case of either or? Can they go hand-in-hand?

Ryan Coetzee, chief executive of Consulum, a consultancy helping governments to integrate strategy, policy and communications, stepped up to the plate to share his view that purpose lies at the core of the company’s brand strategy, yet one cannot ignore the need to make a profit.  

“I don't think just maximising profit is the only thing that matters but unless someone pays you, you're just somebody with a PowerPoint presentation. We can't help unless we get a client who pays us. Then, if we grow profits, we can get more staff, more clients and make a bigger impact.,” said Coetzee.  

Solange Rosa, director of the Bertha Centre, agreed that there's nothing wrong with making a profit. At the same time, one of the aims of the centre is to get the business world to think much more about purpose and social impact.  

“While you’re thinking about profit, think about how you can create some kind of social impact. We work a lot with what we call social entrepreneurs, doing training, capacity building and research. For example, we work with the SAB Foundation to encourage students to think about social innovation and how to create businesses or start-ups out of their ideas,” said Rosa.

She observes a generational shift taking place where young people believe it is not enough just to make a profit anymore, you also have to talk about the impact your business is making – including environmentally.    

Bridgit Evans, executive director of the SAB Foundation, agreed that profits do not operate in a vacuum anymore. About 95% of the entrepreneurs she has dealt with, want to fix problems, not just make money. At the same time - especially to reach scale - enterprises need to find a way to be commercially viable.  

“We’re a big funder of social innovation. I read 600 applications every single year and the reality is that for those innovations to solve problems at scale, they need to find a way of becoming commercially viable. That's the reality because in South Africa today there’s such little funding available,” explained Evans.  

On top of that, social media has enabled “global activism”: when issues are exposed at a company, it can have a huge impact on its bottom line.  Therefore, companies can no longer just focus on making profits for shareholders.  

Kirkland shared an example of a company with a large chain of pharmacies in the USA. Lots of revenue came from also selling cigarettes at these pharmacies. When concerns were raised on how the company could claim to be in the business of supporting health, while simultaneously selling cigarettes, it decided to stop doing so. It took several years to make up for the loss of those revenues, but eventually, the company managed to do so by inventing new products to replace the lost cigarette revenue, according to Kirkland.  

This link between purpose and innovation was further explored by Lola Olaore, founder of bloss.m, a social enterprise that focuses on girls' and women's education and empowerment in the United Kingdom. Her sense of purpose and innovation stems from her own experience growing up in southeast London where she said she was fortunate to have mentors and role models, including her parents, to prevent her life from potentially taking what could have been a very different trajectory.  

She took part in events hosted by an organisation called One Young World, which aims to empower young people to bring change within their communities.  

“However, there came a point where I wondered what happens to these girls after they leave the event? So, I founded bloss.m and we developed our programs to be longer term with the young women, rather than just at one point in time,” related Olaore.  

She described her type of innovation as co-creating with young people when developing programs, rather than simply assuming what they need. Over the five years that bloss.m has been operating, it has already impacted the lives of an estimated 4,000 young women in the UK, often in conjunction with large corporations that recognise a synergy with their own goals of making a social impact.

"This narrative must be run by young people, continuously working towards making South Africa a much more prosperous, much more unified country than ever before."

- Sandile Tshabalala is a co-founder of Huruma Bantfu.

Young entrepreneurs innovating with purpose

“Our dream has always been to make a shift in the community we come from and have that drive us forward.  We started as dancers and went on to become choreographers and directors.”

- Grant van Ster, Figure of 8 Dance Collective.

Among the guests were young entrepreneurs with innovative ideas and a desire to make a difference in society.  

Sandile Tshabalala is a co-founder of a for-profit business called Huruma Bantfu, which works with large corporates and organisations like the Bertha Centre to bring change in townships in South Africa. As for bloss.m’s Olaore, Tshabalala’s own life experience shaped his sense of purpose. As a 13-year-old, living in a township where people were dying of HIV and AIDS, he had a burning desire to change his circumstances. He took the initiative to write to the principal of a private school in the area and managed to get a sponsorship to attend it. He persevered despite not speaking much English and being bullied and ended up excelling academically and receiving scholarships to attend university.  

“For me, purpose is that urge inside that drives you. My business has been running quite a significant amount of work with SOEs, the IMF and the World Bank. And if you ask me why they chose us, it’s because they believe this narrative must be run by young people, continuously working towards making South Africa a much more prosperous, much more unified country than ever before,” said Tshabalala.  

Just like Olaore emphasised the importance of co-creation, Tshabalala also believes building resilient communities means entering conversations of respect and autonomy with those one wants to help. In his view, that type of approach will unleash a lot more creativity during the process.  

“For example, millions of children in South Africa are raised by their grandmothers. We started an NPO, initially sponsored by CellC, to give such grandmothers tablets and teach them how to use them to help their grandchildren and network among themselves. We saw this project as a beautiful way to impact a vulnerable segment of the population and give them dignity,” said Tshabalala.  

Another young entrepreneur who shared her story is Caitlin Courtney, a chemical engineer and co-founder of a start-up called Pee Cycling, which creates fertiliser from human urine.  

“We're trying to offer more circular economy solutions, rethinking the way we look at sanitation, waste and resource recovery. There's a solution for every scenario where we produce waste and different ways to collect it to be treated,” she explained. She hopes to be able to bring the project to scale.  

Then it was the turn of Esethu Cenga, co-founder and CEO of a startup called Rewoven, to explain that they try to innovate in the textile space, looking at the way products are consumed.  

“I wanted to do something in fashion. We researched how we could have an impact on the textile industry and found out that there’s a lot of waste that we can make products from. In the process you can create jobs, clean the environment and create a product that has retail value,” she shared.

Purpose and creativity

At this point in the discussion, Douglas steered the conversation into debating whether purpose could also stretch as far as playing an important role in the creative arts.

This made Luthando Neo Rwanqa, a senior knowledge associate at DKP, raise the issue of the importance of enabling those who have a purpose and dreams of creating something, but lack access to opportunities and skills development.

Grant van Ster, a co-founder of the Cape Town-based Figure of 8 Dance Collective, responded that for him it’s about showcasing and demonstrating to young people that you can make a career out of dance, theatre and the arts - to guide and nurture them on the way forward to a sustainable career.

“Our dream has always been to make a shift in the community we come from and have that drive us forward.  We started as dancers and went on to become choreographers and directors,” related Van Ster.

He always reminds himself of what the iconic South African actor John Kani once told him: “Don’t take your art for a charity, make a business out of it.”

In the view of Crystal Ball, a senior knowledge partner at DKP, her experience as a production manager for the development of an independent niche narrative game showed that purpose can be fun – the joy of bringing life into something and taking people on a journey.

She delved further into the connection between imagination and innovation, saying Innovation usually seems to come from a crisis while it takes imagination to convince someone else that your idea is worth investing in. And having data on hand to back up one’s business case, will help a lot.

Kikrland concluded the fruitful discussion by re-iterating once more that one needs to have societies driven by innovation and purpose - to have entrepreneurs who are thinking not just about their ecosystems and individual products but about how what they do fits into the greater good.