Source:
- IE University – Insights, Published on October 15th, 2024.
By Francesco Derchi
Purpose is a strategic tool for driving innovation, competitive advantage, and addressing AI challenges, writes Francesco Derchi.
Since the early 2000s, technology has dominated discussions among scholars and professionals about global development and economic trends, with the first wave of research regarding the internet’s impact on firms and society focusing on the enabling potential of technologies. The concept of “digital revolution,” as popularized by Nicholas Negroponte, became the new paradigm for broader considerations about the development of the firm’s macro environment, and how businesses could leverage it as an asset for creating competitive advantage. The following wave focused on the convergence of different technologies, such as manufacturing, and included the dynamics of coexistence between humans and machines. From the management side, the major challenges are related to defining effective digital transformation practices that could help to migrate organizations and exploit this new paradigm.
The current technological focus builds on these previous trends, particularly on artificial intelligence and more recently on the emergence of generative AI. The Age of AI is characterized by technology’s power to reshape business and society on a variety of levels. While AI’s pervasive impact is not new for firms, the mainstream adoption of ChatGPT for business purposes and the response to this ready adoption from big tech players like Microsoft, Google, and more recently Apple, shows how AI is reshaping and influencing companies’ strategic priorities.
From a research perspective, AI’s societal impact is inspiring new studies in the field of ethics. Luciano Floridi, now of Yale University, has identified several challenges for AI, characterizing them by global magnitudes like its environmental impact and has identified several challenges for AI security, including intellectual property, privacy, transparency, and accountability. In his work, Floridi underlines the importance of philosophy in defining problems and designing solutions – but it is equally important to consider how these challenges can be addressed at the firm level. What are the tools for managers?
Part of the answer may lie in the increasing and recent focus of management studies around “corporate purpose” and “brand purpose.” This trend represents an important attempt to deepen our understanding of “why to act” (purpose framing) and “how to act” (purpose formalizing and internalizing), while technology management studies address the “what to act” (purpose impacting) question. Furthermore, studies show that corporate purpose is critical for both digital native firms as well as traditional companies undergoing a digital transformation, serving as an important growth engine through purpose-driven innovation. It is therefore fair to ask: can purpose help in addressing any of the AI challenges previously mentioned?
Purpose concepts are not exclusively “cause-related” like CSR and environmental impact. Other types have emerged, such as “competence” (the function of the product) and “culture” (the intent that drives the business). This broadens the consideration of impact types that can help address specific challenges in the age of AI.
Purpose-driven organizations are not new. Take Tesla’s direction “to accelerate the world’s transition to sustainable energy” – it explicitly addresses environmental challenges while defining a business direction that requires constant innovation and leverages multiple converging technologies. The key is to have the purpose formalized and internalized within the company as a concrete drive for growth.
Due to its characteristics, the MTP plays a key role in digital transformation. This necessarily ambitious and long-term vision or goal – the Massive Transformative Purpose – requires firms, particularly those focused on exponential growth, to address emerging accelerating technologies with a purpose-first transformation logic. P&G’s Global Business Services division was able to improve market leadership and gain a competitive advantage over various start-ups and potential disruptors through its “Free up the employee, for free” MTP. This served as a north star for every employee, encouraging them to contribute ideas and best practices to overcome bulky processes and limitations.
My research on MTPs in AI-era firms explores their role in driving innovation to address specific challenges. Results show that the MTP impacts the organization across four dimensions, requiring commitment and synergy from management. Let’s consider these four dimensions by looking at Airbnb:
- Internal Impact: The MTP acts as the organization’s genetic code and guiding philosophy. It is key for leveraging employee motivation, with a strong relationship between purpose, organizational culture, and firm values. Airbnb’s culture of belonging highlights this, with its various purpose-shaping practices, starting with culture-fit interviews delivered during the recruitment process.
- Brand and Market Influence: The MTP contributes directly to building a strong brand and influencing the market. It allows firms to extend beyond functional and symbolic benefits to make the impact of the company on society visible. This involves addressing market demand coherently and consistently. Airbnb’s “Bélo” symbol visually represents this concept of belonging while their MTP features in campaigns like “Wall and Chain: A Story of Breaking Down Walls.”
- Competitive Advantage and Growth: The MTP drives innovation and can lead to superior stock market performance. In digital firms, it’s key in the creation of ecosystems that aggregate leveraged assets and third parties for value creation. The company’s “belong anywhere transformation journey” is a strategic initiative that formalized and interiorized the MTP through various touchpoints for all the different ecosystem members. As Leigh Gallagher details in her 2016 Fortune feature about the company, “When travellers leave their homes, they feel alone. They reach their Airbnb, and they feel accepted and taken care of by their host. They then feel safe to be the same kind of person they are when they’re at home.”
- Core Organization Identity: The MTP is considered part of the core dimension of the organization. More than a goal or business strategy, it is a strategic issue that generates a sense of direction and purpose that affects every part of the organization: internal, external, personality, and expression. This dimension also involves the role of the founder(s) and their personality in shaping the business. At Airbnb, the MTP is often used as a shortcut to explain the firm’s mission and vision. The founders’ approach is pragmatic, and instead of debating differences, time should be spent on execution. At the same time, the personalities of the three founders, Chesky, Gebbia, and Blecharcyzk, are the identity of the firm. They were the first hosts for the platform. Their credibility is key for making Airbnb a trustworthy and coherent proposal in a crowded market.
Executives and leaders of business in the current AI era should embrace three key principles. Be true: Purpose is an essential strategic tool that enables firms to identify and connect with their original selves, decoding their reason for being and embedding it into their identity. Be ambitious: The MTP allows for global impact, confronting major challenges by synthesizing business values and guiding innovation paths to address AI-related issues. Be generous: Purpose allows firms to explicitly address environmental and social issues, taking action on values-based challenges such as transparency, respect for intellectual property, and accountability. By following these principles, organizations and their leaders can maintain their direction and continue to advance in the AI era.
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From the same author
Read the articleOpen Institute of Technology (OPIT) masterclasses bring students face-to-face with real-world business challenges. In OPIT’s July masterclass, OPIT Professor Francesco Derchi and Ph.D. candidate Robert Mario de Stefano explained the principles of regenerative businesses and how regeneration goes hand in hand with growth.
Regenerative Business Models
Professor Derchi began by explaining what exactly is meant by regenerative business models, clearly differentiating them from sustainable or circular models.
Many companies pursue sustainable business models in which they offset their negative impact by investing elsewhere. For example, businesses that are big carbon consumers will support nature regeneration projects. Circular business models are similar but are more focused on their own product chain, aiming to minimize waste by keeping products in use as long as possible through recycling. Both models essentially aim to have a “net-zero” negative impact on the environment.
Regenerative models are different because they actively aim to have a “net-positive” impact on the environment, not just offsetting their own use but actively regenerating the planet.
Massive Transformative Purpose
While regenerative business models are often associated with philanthropic endeavors, Professor Derchi explained that they do not have to be, and that investment in regeneration can be a driver of growth.
He discussed the importance of corporate purpose in the modern business space. Having a strong and clearly stated corporate purpose is considered essential to drive business decision-making, encourage employee buy-in, and promote customer loyalty.
But today, simple corporate missions, such as “make good shoes,” don’t go far enough. People are looking for a Massive Transformational Purpose (MTP) that can take the business to the next level.
Take, for example, Ben & Jerry’s. The business’s initial corporate purpose may have been to make great ice cream and serve it up in a way that people will enjoy. But the business really began to grow when they embraced an MTP. As they announced in their mission statement, “We believe that ice cream can change the world.” Their business activities also have the aim of advancing human rights and dignity, supporting social and economic justice, and protecting and restoring the Earth’s natural systems. While these aims are philanthropic, they have also helped the business grow.
RePlanet
Professor Derchi next talked about RePlanet, a business he recently worked to develop their MTP. Founded in 2015, RePlanet designs and implements customized renewable energy solutions for businesses and projects. The company already operates in the renewable energy field and ranked as the 21st fastest-growing business in Italy in 2023. So while they were already enjoying great success, Derchi worked with them to see if actively embracing a regenerative business model could unlock additional growth.
Working together, RePlanet moved towards an MTP of building a greener future based on today’s choices, ensuring a cleaner world for generations. Meeting this goal started with the energy products that RePlanet sells, such as energy systems that recover heat from dairy farms. But as the business’s MTP, it goes beyond that. RePlanet doesn’t just engage suppliers; it chooses partners that share its specific values. It also influences the projects they choose to work on – they prioritize high-impact social projects, such as recently installing photovoltaic energy systems at a local hospital in Nigeria – and how RePlanet treats its talent, acknowledging that people are the true energy of the company.
Regenerative Business Strategies
Based on work with RePlanet and other businesses, Derchi has identified six archetypal regenerative business strategies for businesses that want to have both a regenerative impact and drive growth:
- Regenerative Leadership – Laying the foundation for regeneration in a broader sense throughout the company
- Nature Regeneration – Strategies to improve the health of the natural world
- Social Regeneration – Regenerating human ecosystems through things such as fair-trade practices
- Responsible Sourcing – Empowering and strengthening suppliers and their communities
- Health & Well-being – Creating products and services that have a positive effect on customers
- Employee Focus – Improve work conditions, lives, and well-being of employees.
Case Studies
Building on the concept of regenerative business models, Roberto Mario de Stefano shared other case studies of businesses that are having a positive impact and enjoying growth thanks to regenerative business models and strategies.
Biorfarm
Biorfarm is a digital platform that supports small-scale agriculture by creating a direct link between small farmers and consumers. Cutting out the middleman in modern supply chains means that farmers earn about 50% more for their produce. They set consumers up as “digital farmers” who actively support and learn about farming activities to promote more conscious food consumption.
Their vision is to create a food economy in which those who produce food and those who consume it are connected. This moves consumers from passive cash cows for large corporations that prioritize profits over the well-being of farmers to actively supporting natural production and a more sustainable system.
Rifo Lab
Rifo Lab is a circular clothing brand with the vision of addressing the problem of overproduction in the clothing industry. Established in Prato, Italy, a traditional textile-producing area, the company produces clothes made from textile waste and biodegradable materials. There are no physical stores, and all orders must be placed online; everything is made to order, reducing excess production.
With an eye on social regeneration, all production takes place within 30 kilometers of their offices, allowing the business to support ethical and local production. They also work with companies that actively integrate migrants into the local community, sharing their local artisan crafts with future generations.
Ogyre
Ogyre is a digital platform that allows you to pay fishermen to fish for waste. When fishermen are out conducting their livelihood, they also collect a significant amount of waste from the ocean, especially plastic waste. Ogyre arranges for fishermen to get paid for collecting that waste, which in turn supports the local fishing communities, and then transforms the waste collected into new sustainable products.
Moving Towards a Regenerative Future
The masterclass concluded with a Q&A session, where it explained that working in regenerative businesses requires the same skills as any other business. But it also requires you to embrace a mindset where value comes from giving and that growth is about working together for a better future, and not just competition.
Read the articleRiccardo Ocleppo’s vision for the Open Institute of Technology (OPIT) started when he realized that his own university-level training had not properly prepared him for the modern workplace. Technological innovation is moving quickly and changing the nature of work, while university curricula evolve slowly, in part due to systems in place designed to preserve the quality of courses.
Ocleppo was determined to create a higher learning institution that filled the gap between the two realities – delivering high-quality education while preparing professionals to work in dynamic environments that keep pace with technology. Thus, OPIT opened enrolments in 2023 with a curriculum that created a unique bridge between the present and the future.
This is the story of one student, Ania Jaca, whose time at OPIT gave her the skills to connect her knowledge of product design to full system deployment.
Meet Ania
Ania is an example of an active professional who was able to identify what was missing in her own skills that would be needed if she wanted to advance her career in the direction she desired.
Ania is a highly skilled professional who was working on product and industrial design at Deloitte. She has an MA in product design, speaks five languages, studied in China, and is an avid boxer. She had the intelligence and the temperament to succeed in her career, but felt that she lacked the skills to advance and move from determining how products look to how systems really work, scale, and evolve.
Ania taught herself skills such as Python, artificial intelligence (AI), and cloud infrastructure, but soon realized that she needed a more structured education to go deeper. Thus, the search for her next steps began, and her introduction to OPIT.
OPIT appealed to Ania because it offered a fully EU-accredited MSc that she could pursue at her own pace, thanks to remote delivery and flexible hours. But more than that, it filled exactly the knowledge gap she was looking to build upon, teaching her technical foundations, but always with a focus on applications in the real world. Part of the appeal was the faculty, which includes professionals who are leaders in their field and who deal with current professional challenges on a daily basis, which they can bring into the classroom.
Ania enrolled in OPIT’s MSc in Applied Data Science & AI.
MSc in Applied Data Science and AI
This is OPIT’s first master’s program, which also launched in 2023, and is now one of four on offer. The course is designed for graduates like Ania who want a career at the intersection of management and technology. It is attractive to professionals who are already working in this area but lack the technical training to step into certain roles. OPIT requires no computer science prerequisites, so it accepted Ania with her MA in product design.
It is an intensive program that starts with foundational application courses in business, data science, machine learning, artificial intelligence, and problem-solving. The program then moves towards applying data science and AI methodologies and tools to real-life business problems.
The course combines theoretical study with a capstone project that lets students apply what they learn in the real world, either at their existing company or through internship programs. Many of the projects developed by students go on to become fundamental to the businesses they work with.
Ania’s Path Forward
Ania is working on her capstone project with Neperia Group, an Italian-based IT systems development company that works mostly with financial, insurance, and industrial companies. They specialize in developing analysis tools for existing software to enhance insight, streamline management, minimize the impact of corrective and evolutionary interventions, and boost performance.
Ania is specifically working on tools for assessing vulnerabilities in codebases as an advanced cybersecurity tool.
Ania credits her studies at OPIT for helping her build solid foundations in data science, machine learning, and cloud workflows, giving her a thorough understanding of digital products from end to end. She feels this has prepared her for roles at the intersection between infrastructure, security, and deployment, which is exactly where she wants to be. OPIT is excited to see where Ania’s career takes her in the coming years.
Preparing for the Future of Work
Overall, studying at OPIT has helped Ania and others like her prepare for the future of work. According to the Visual Capitalist, the fastest-growing jobs between 2025 and 2030 will be in big data (up by 110%), Fintech engineers (up by 95%), AI and machine learning specialists (up by 85%), software application developers (up by 60%), and security management specialists (up by 55%).
However, while these industries are growing, entry-level opportunities are declining in areas such as software development and IT. This is because AI now performs many of the tasks associated with those roles. Instead, companies are looking for experienced professionals to take on roles that involve more strategic oversight and innovative problem-solving. But how do recent graduates leapfrog past experienced professionals when there is a lack of entry-level positions to make the transition?
This is another challenge that OPIT addresses in its course design. Students don’t just learn the theory, OPIT actively encourages them to focus on applications, allowing them to build experience while studying. The capstone project consolidates this, enabling students to demonstrate to future employers their expertise at deploying technology to solve problems.
OPIT also has a dynamic Career Services department that specifically works with students to prepare them for the types of roles they want. This focus on not only learning but building a career is one of the elements that makes OPIT stand out in preparing graduates for the workplace.
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Open Institute of Technology (OPIT) masterclasses bring students face-to-face with real-world business challenges. In OPIT’s July masterclass, OPIT Professor Francesco Derchi and Ph.D. candidate Robert Mario de Stefano explained the principles of regenerative businesses and how regeneration goes hand in hand with growth.
Regenerative Business Models
Professor Derchi began by explaining what exactly is meant by regenerative business models, clearly differentiating them from sustainable or circular models.
Many companies pursue sustainable business models in which they offset their negative impact by investing elsewhere. For example, businesses that are big carbon consumers will support nature regeneration projects. Circular business models are similar but are more focused on their own product chain, aiming to minimize waste by keeping products in use as long as possible through recycling. Both models essentially aim to have a “net-zero” negative impact on the environment.
Regenerative models are different because they actively aim to have a “net-positive” impact on the environment, not just offsetting their own use but actively regenerating the planet.
Massive Transformative Purpose
While regenerative business models are often associated with philanthropic endeavors, Professor Derchi explained that they do not have to be, and that investment in regeneration can be a driver of growth.
He discussed the importance of corporate purpose in the modern business space. Having a strong and clearly stated corporate purpose is considered essential to drive business decision-making, encourage employee buy-in, and promote customer loyalty.
But today, simple corporate missions, such as “make good shoes,” don’t go far enough. People are looking for a Massive Transformational Purpose (MTP) that can take the business to the next level.
Take, for example, Ben & Jerry’s. The business’s initial corporate purpose may have been to make great ice cream and serve it up in a way that people will enjoy. But the business really began to grow when they embraced an MTP. As they announced in their mission statement, “We believe that ice cream can change the world.” Their business activities also have the aim of advancing human rights and dignity, supporting social and economic justice, and protecting and restoring the Earth’s natural systems. While these aims are philanthropic, they have also helped the business grow.
RePlanet
Professor Derchi next talked about RePlanet, a business he recently worked to develop their MTP. Founded in 2015, RePlanet designs and implements customized renewable energy solutions for businesses and projects. The company already operates in the renewable energy field and ranked as the 21st fastest-growing business in Italy in 2023. So while they were already enjoying great success, Derchi worked with them to see if actively embracing a regenerative business model could unlock additional growth.
Working together, RePlanet moved towards an MTP of building a greener future based on today’s choices, ensuring a cleaner world for generations. Meeting this goal started with the energy products that RePlanet sells, such as energy systems that recover heat from dairy farms. But as the business’s MTP, it goes beyond that. RePlanet doesn’t just engage suppliers; it chooses partners that share its specific values. It also influences the projects they choose to work on – they prioritize high-impact social projects, such as recently installing photovoltaic energy systems at a local hospital in Nigeria – and how RePlanet treats its talent, acknowledging that people are the true energy of the company.
Regenerative Business Strategies
Based on work with RePlanet and other businesses, Derchi has identified six archetypal regenerative business strategies for businesses that want to have both a regenerative impact and drive growth:
- Regenerative Leadership – Laying the foundation for regeneration in a broader sense throughout the company
- Nature Regeneration – Strategies to improve the health of the natural world
- Social Regeneration – Regenerating human ecosystems through things such as fair-trade practices
- Responsible Sourcing – Empowering and strengthening suppliers and their communities
- Health & Well-being – Creating products and services that have a positive effect on customers
- Employee Focus – Improve work conditions, lives, and well-being of employees.
Case Studies
Building on the concept of regenerative business models, Roberto Mario de Stefano shared other case studies of businesses that are having a positive impact and enjoying growth thanks to regenerative business models and strategies.
Biorfarm
Biorfarm is a digital platform that supports small-scale agriculture by creating a direct link between small farmers and consumers. Cutting out the middleman in modern supply chains means that farmers earn about 50% more for their produce. They set consumers up as “digital farmers” who actively support and learn about farming activities to promote more conscious food consumption.
Their vision is to create a food economy in which those who produce food and those who consume it are connected. This moves consumers from passive cash cows for large corporations that prioritize profits over the well-being of farmers to actively supporting natural production and a more sustainable system.
Rifo Lab
Rifo Lab is a circular clothing brand with the vision of addressing the problem of overproduction in the clothing industry. Established in Prato, Italy, a traditional textile-producing area, the company produces clothes made from textile waste and biodegradable materials. There are no physical stores, and all orders must be placed online; everything is made to order, reducing excess production.
With an eye on social regeneration, all production takes place within 30 kilometers of their offices, allowing the business to support ethical and local production. They also work with companies that actively integrate migrants into the local community, sharing their local artisan crafts with future generations.
Ogyre
Ogyre is a digital platform that allows you to pay fishermen to fish for waste. When fishermen are out conducting their livelihood, they also collect a significant amount of waste from the ocean, especially plastic waste. Ogyre arranges for fishermen to get paid for collecting that waste, which in turn supports the local fishing communities, and then transforms the waste collected into new sustainable products.
Moving Towards a Regenerative Future
The masterclass concluded with a Q&A session, where it explained that working in regenerative businesses requires the same skills as any other business. But it also requires you to embrace a mindset where value comes from giving and that growth is about working together for a better future, and not just competition.
Riccardo Ocleppo’s vision for the Open Institute of Technology (OPIT) started when he realized that his own university-level training had not properly prepared him for the modern workplace. Technological innovation is moving quickly and changing the nature of work, while university curricula evolve slowly, in part due to systems in place designed to preserve the quality of courses.
Ocleppo was determined to create a higher learning institution that filled the gap between the two realities – delivering high-quality education while preparing professionals to work in dynamic environments that keep pace with technology. Thus, OPIT opened enrolments in 2023 with a curriculum that created a unique bridge between the present and the future.
This is the story of one student, Ania Jaca, whose time at OPIT gave her the skills to connect her knowledge of product design to full system deployment.
Meet Ania
Ania is an example of an active professional who was able to identify what was missing in her own skills that would be needed if she wanted to advance her career in the direction she desired.
Ania is a highly skilled professional who was working on product and industrial design at Deloitte. She has an MA in product design, speaks five languages, studied in China, and is an avid boxer. She had the intelligence and the temperament to succeed in her career, but felt that she lacked the skills to advance and move from determining how products look to how systems really work, scale, and evolve.
Ania taught herself skills such as Python, artificial intelligence (AI), and cloud infrastructure, but soon realized that she needed a more structured education to go deeper. Thus, the search for her next steps began, and her introduction to OPIT.
OPIT appealed to Ania because it offered a fully EU-accredited MSc that she could pursue at her own pace, thanks to remote delivery and flexible hours. But more than that, it filled exactly the knowledge gap she was looking to build upon, teaching her technical foundations, but always with a focus on applications in the real world. Part of the appeal was the faculty, which includes professionals who are leaders in their field and who deal with current professional challenges on a daily basis, which they can bring into the classroom.
Ania enrolled in OPIT’s MSc in Applied Data Science & AI.
MSc in Applied Data Science and AI
This is OPIT’s first master’s program, which also launched in 2023, and is now one of four on offer. The course is designed for graduates like Ania who want a career at the intersection of management and technology. It is attractive to professionals who are already working in this area but lack the technical training to step into certain roles. OPIT requires no computer science prerequisites, so it accepted Ania with her MA in product design.
It is an intensive program that starts with foundational application courses in business, data science, machine learning, artificial intelligence, and problem-solving. The program then moves towards applying data science and AI methodologies and tools to real-life business problems.
The course combines theoretical study with a capstone project that lets students apply what they learn in the real world, either at their existing company or through internship programs. Many of the projects developed by students go on to become fundamental to the businesses they work with.
Ania’s Path Forward
Ania is working on her capstone project with Neperia Group, an Italian-based IT systems development company that works mostly with financial, insurance, and industrial companies. They specialize in developing analysis tools for existing software to enhance insight, streamline management, minimize the impact of corrective and evolutionary interventions, and boost performance.
Ania is specifically working on tools for assessing vulnerabilities in codebases as an advanced cybersecurity tool.
Ania credits her studies at OPIT for helping her build solid foundations in data science, machine learning, and cloud workflows, giving her a thorough understanding of digital products from end to end. She feels this has prepared her for roles at the intersection between infrastructure, security, and deployment, which is exactly where she wants to be. OPIT is excited to see where Ania’s career takes her in the coming years.
Preparing for the Future of Work
Overall, studying at OPIT has helped Ania and others like her prepare for the future of work. According to the Visual Capitalist, the fastest-growing jobs between 2025 and 2030 will be in big data (up by 110%), Fintech engineers (up by 95%), AI and machine learning specialists (up by 85%), software application developers (up by 60%), and security management specialists (up by 55%).
However, while these industries are growing, entry-level opportunities are declining in areas such as software development and IT. This is because AI now performs many of the tasks associated with those roles. Instead, companies are looking for experienced professionals to take on roles that involve more strategic oversight and innovative problem-solving. But how do recent graduates leapfrog past experienced professionals when there is a lack of entry-level positions to make the transition?
This is another challenge that OPIT addresses in its course design. Students don’t just learn the theory, OPIT actively encourages them to focus on applications, allowing them to build experience while studying. The capstone project consolidates this, enabling students to demonstrate to future employers their expertise at deploying technology to solve problems.
OPIT also has a dynamic Career Services department that specifically works with students to prepare them for the types of roles they want. This focus on not only learning but building a career is one of the elements that makes OPIT stand out in preparing graduates for the workplace.
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