The purpose of business is to increase its profits. That was the school of thought made famous by Milton Friedman.
But today, many businesses are thinking bigger, and asking, “Who do we serve? What’s our larger purpose?”
Last week, I was able to share how Siemens is answering those questions when I made the opening remarks at the Washington Post event “Redefining Corporate Purpose.” The program drew together perspectives from banking, business and media to consider the major points of the Statement on the Purpose of a Corporation issued by Business Roundtable (BRT) this past August, which was signed by companies, including Siemens.
[Watch the full event here.]
The statement was a bold step to underscore the role of business within our society. And it highlighted the many areas where businesses can deliver value, whether that’s through our investments in employees, the integrity of our relationships with suppliers or our support for the communities in which we do business.
Reflecting on why Bank of America signed the statement, CEO Brian Moynihan noted in his opening interview that his team believes they need to drive “responsible growth.”
“We've got to grow because that means we're successful,” Moynihan said. “We've got to do it with a customer-focus, got to do it with the right risk, and it's got to be sustainable.”
He added: It’s about “producing great returns for shareholders and delivering on what society needs from us.”
At Siemens, we sum up purpose this way: A company that doesn’t create value for society shouldn’t exist. It’s our mission to serve society, and that invariably encompasses our wide set of stakeholders, including our many suppliers, the communities that we serve, the environment, our customers and, notably, our employees.
And this obligation to our employees is of particular importance as we think about the workforce of the future. As Kristen Silverberg, BRT’s executive vice president, said, “We have this rapidly changing economy, and part of the responsibility of employers is to help employees navigate that. This is in their business interests. They’ll need employees with all skill sets.”
Indeed, in today’s economy and era of continuous change, corporations themselves are also having to adapt and navigate uncharted territory. Over our 172 years of existence, Siemens has built a long legacy in industrial manufacturing. More recently, as we’ve embraced new digital technologies, we’ve reinvented ourselves as the largest industrial software company in the world. Our entire business strategy is organized around how our capabilities in both software and hardware can solve the world’s biggest challenges and make a big difference as megatrends like climate change, rapid urbanization and aging demographics shape the globe.
I mentioned at the event that this relates to why we refer to ourselves at Siemens as a “B2S” company, which stands for business to society. It’s different from “B2B” or “B2C,” in which the target is serving other businesses or consumers. Being a B2S company is core to our mission, but I also think it’s key to our longevity. I believe it will be a central reason that our contributions to society continue 172 years into the future, and agreed with Daryl Brewster, CEO of Chief Executives for Corporate Purpose, when he said, “[Business focus] is on sustainable value over time versus short-term gains.”
Let me put it this way: If we could look into a crystal ball and see the next 50 to 100 years, what kinds of companies would be around? My bet is that it’ll be the businesses that embrace a larger mission for their work – the ones driven by a purpose to serve society and to leave our planet better than they found it.
That’s the business community that I want to help shape. And that’s why we like to say we’re taking the 2050 view at Siemens. It’s how we’re going to build a sustainable future, and it’s at the center of how our team incorporates purpose into their work every day.