(Source: Yahoo Finance - Facebook share price, June 2012 to September 2014)
In comparison, consider that the ten-year average return for the S&P 500 index over the past ninety years is but 9.8%. Any investor would have killed for such an asset as Facebook in its first three years of going public.
Beyond individual examples demonstrating that companies who are focused on their purpose are rewarded by investors and customers, aggregated research has also proven that such purpose-focused firms significantly outperform their rivals. The book, Firms of Endearment, explored those organizations who are in the top ten percent in relation to focusing on their purpose, community, customers and employees. Their research revealed that, over the decade ending in June 2006, these firms returned 1,025% to their shareholders, compared to 122% return on investment by the S&P 500 overall. Just to be clear, this study therefore quantified that purpose-driven organizations reward their investors better than the market average by a multiple of ten!
Strike Deals Between Profit and Purpose
Perhaps our ultimate question must be: Is there a trade-off between “mission” and “financial return”? Recent research indicates this is not necessarily so, and the two forces may even serve each other. A huge amount of dialogue has attempted to answer this question both in media and in conferences. The opinions are typically more definitive then one may guess and often resemble the sentiment: “The most successful companies, both in profitability and longevity, are the ones who recognize the absolute necessity of profits as well as the equally high necessity of having a purpose beyond shareholders’ wealth.” The vanguard companies in the near future will be those that are noble at their core, that honor creative impulse, and that stir the hearts and minds of their people and their customers.