We all know purpose is critical – but what does that mean in practice? This month, we’re sharing a case study from online craft marketplace Etsy, to understand how a purposeful approach benefitted their business.
Etsy almost lost its way after going public in 2015. After years of struggling to turn a profit, the leadership found it hard to cope with the pressure of shareholder demands and almost gave in to a private equity bid in 2017. Five years later, it’s a company renowned for its social and environmental impact and commitment to its sellers. What changed?
In 2017, Josh Silverman joined Etsy as CEO with a mission to turn Etsy’s fortunes around – but with a twist. His mandate was to make the business profitable, also to improve the organisation’s social and environmental business. He implemented a purpose-driven strategy built around four key pillars:
Focus: Purpose is about being single-minded as well as meaningful. Under Silverman’s guidance, Etsy targeted its investment on projects that focused on the core business. After all, that’s what would drive growth.
Measurement: Silverman established a framework for measuring Etsy’s environmental and economic impact. He also set clear targets for future improvement – for example filling 50% of leadership positions with people from underrepresented groups by 2023.
Accountability: Etsy publishes audited reports against all its goals – so that customers, employees and shareholders alike can have a transparent view of its progress against commitments.
Dialogue: Silverman didn’t create or execute this strategy in isolation. Employees were invited to share their perspectives and contribute to the organisation’s new purpose and values.
The outcome of this strategy has done more than just increase Etsy’s feel-good factor – share prices are up and as of June 2022 the organisation is currently on Motley Fool’s “if I could only buy one stock this would be it” list. Re-establishing a sense of social responsibility was crucial to this commercial success.
Find out more about Etsy’s approach to purpose here.