Summary
A recent analysis of the 2022 Edelman Trust Barometer reveals a troubling trend: distrust has become the default emotion in society, with nearly half of respondents believing that government and media perpetuate this cycle. In contrast, businesses are viewed more favorably, with 61% of participants expressing trust in them. This shift places new expectations on CEOs, who are now seen as responsible for societal leadership alongside their traditional roles.
The discussion also centers on the case of Etsy, as explored by Professor Ranjay Gulati, who emphasizes the company's journey from a mission-driven startup to a public entity facing significant challenges. Under the leadership of Josh Silverman, Etsy underwent a critical turnaround after struggling with stagnating growth and rising operational costs. Silverman faced the difficult task of balancing profitability with the company's original social mission, which had become diluted over time.
Gulati highlights the importance of "deep purpose" in business, arguing that a clear, actionable purpose can drive both financial success and social impact. He notes that companies must navigate trade-offs and make hard choices to align their operations with their stated missions. The transformation of Etsy serves as a case study in how businesses can effectively integrate purpose into their strategies while maintaining accountability and measurable outcomes.
Show Notes
How Etsy Found Its Purpose and Crafted a Turnaround | Cold Call
12 Jul 2023
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Etsy, the online seller of handmade goods, was founded in 2005 as an alternative to companies that sold mass-manufactured products. The company grew substantially but remained unprofitable under the leadership of two early CEOs.
Ten years later, Etsy went public and was forced into a new arena, where it was beholden to stakeholders who demanded financial success and accountability. Unable to contain costs, the company was almost bought out by private equity firms in 2017 – until CEO Josh Silverman arrived with a mission to save the company financially and, in the process, save its soul.
Harvard Business School professor Ranjay Gulati discusses the purpose-driven turnaround Silverman and his team led at Etsy – to make the company profitable and improve its social and environmental impact – in the case, “Etsy: Crafting a Turnaround to Save the Business and Its Soul.” (https://hbsp.harvard.edu/product/821092-PDF-ENG?Ntt=821092)
This episode originally aired on Cold Call on March 22, 2022.
You can also listen to this episode on HBR.org, and wherever you listen to podcasts: - HBR.org (transcript available here): https://hbr.org/podcast/2022/03/how-etsy-found-its-purpose-and-crafted-a-turnaround - Apple Podcasts: https://podcasts.apple.com/us/podcast/how-etsy-found-its-purpose-and-crafted-a-turnaround/id1156646189?i=1000554854577 - Spotify: https://open.spotify.com/episode/2dx8t9mEiBplJcucOS1Lwc?si=2bb154762918456c - Stitcher: https://www.stitcher.com/show/cold-call/episode/how-etsy-found-its-purpose-and-crafted-a-turnaround-201597920 - Google Podcasts: https://podcasts.google.com/feed/aHR0cDovL2ZlZWRzLmhhcnZhcmRidXNpbmVzcy5vcmcvaGFydmFyZGJ1c2luZXNzL2NvbGQtY2FsbA/episode/dGFnOmF1ZGlvLmhici5vcmcsMjAxNi0wOS0xNjpjb2xkLWNhbGwuMDE3MQ?sa=X&ved=0CAIQuIEEahcKEwjQlsH78vz_AhUAAAAAHQAAAAAQLA
Series Description: Harvard Business School’s legendary case studies, distilled into podcast form.
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Chapters: 00:00 – Intro 2:02 – Financial and Social Performance 6:27 – Defining Deep Purpose 8:46 – What Is Etsy / Founder Rob Kalin 11:38 – CEO Chad Dickerson & IPO Troubles 14:41 – CEO Josh Silverman & Making Commerce Human 22:13 – Is Deep Purpose Necessary? 24:37 – Outro
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