Every business must serve a social purpose”. These are not the words of a social campaigner or a politician; they are the words of a banker, Ashok Vaswani, the CEO of Retail and Business Banking at Barclays, one of the world’s largest banks. Barclays has been involved in at least one major trading scandal and holds the dubious honour of the most fined bank in Britain. There will be some people who will treat his words with understandable cynicism but that would be to miss the point.
The point is not whether the words are sincere or not – it is that they should have been said at all. Banks are concerned with the control of money, why should they concern themselves with any purpose beyond that? The reason is that society is demanding they do. When banks first started they fulfilled a social need in the community, to enable ordinary people to fund their ambitions. Over the years banks forgot that purpose and focused most of their efforts on funding their own ambitions through obscene profits, often at the consumer’s expense. The bubble burst in spectacular fashion with the downfall of Lehman Brothers in the US and RBS in the UK.
It isn’t just the banks that have lost their way. Now it’s critical for any business to demonstrate it has a purpose before, and beyond profit; that it seeks to improve the lives of its customers as a primary goal. Failure to have such a purpose, to be clear about it and to ensure it directs everything you do, will lose customers, employees and ultimately business value....
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Not surprisingly, United Airlines took a massive social media and reputation hit, not to mention the impact on their share value.