Brunello Cucinelli the business case for purpose

Brunello Cucinelli has been making clothes very successfully since 1978. Cucinelli pays his staff more than the average wage for their jobs, insists they work no longer than eight-and-a-half hours a day, and spends around 20% of his profits on what he calls “the gift”. He also runs a oversubscribed craft school craft school, where students learn tailoring, stonemasonry and embroidery, among other disciplines. His is the Crafting Organisation. Cucinelli quotes Rousseau, “human beings are creative only when the environment around them is in harmony with creation.” And, “I believe that’s what the entire world wants,” he says. “Whether it’s a Swiss watch or a British car or Italian clothes, they want quality.”

This is what The Economist wrote who ran an lengthy article on Cucinelli,

Capitalism and Kant don’t always go well together, and pleasing the stockmarket isn’t Cucinelli’s priority. His ideal growth rate, he says, is 10%: “the hedge funds aren’t interested in that but the pension funds are…we want only a smooth growth level. It must be gracious. Everything in this business has to be gracious. Profit is the gift when creation is perfect.”

But Cucinelli’s investors have nothing to complain about. He floated his company in 2012, presenting the chief executive of the Milan stock exchange with a 16th-century edition of Aristotle’s “Nicomachean Ethics” on the day of its initial public offering. Since then, his shares have tripled in value; in the same period, the Dow has risen by around a half.

Harvard Business Review and Wired Magazine have both published articles stating that, over the long run, purpose driven companies are more financially successful. Purpose is the point. Profit is the result. Good things come to purpose driven companies. They are also more enduringly satisfying, because they reinforce the idea that life is and can be worthwhile. For Millennial’s there is also a big shift in their worldview and values, something I was recently reminded of when I spoke to Fiona Reynolds, The Master of Emmanuel College University of Cambridge. What are the currencies of wealth? Happiness, fulfillment and satisfaction. These are fundamental to human motivation.

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