For many years purpose has been a topic which marketers have philosophised and deliberated. Some see it as the most foundational component of their business, while others see it as a function of corporate social responsibility with limited impact on consumer preference. In the context of the attention economy, the need for higher purpose has never been stronger for building and nurturing credibility.
The positioning of a company’s higher purpose influences willingness - both of its employees and the consumers - to engage with its offering and products. By 2025, millennials will comprise three-quarters of the global workforce.i. Companies must heed a potent combination - increased competition for talent and a workforce prioritising purpose, values and flexibility. Seventy-eight percent of millennials say it is important their values match the values of the business where they work.ii. What a company stands for and how it goes to market matters. Two-thirds (64%) of consumers around the world will buy from or boycott a brand solely because of its position on a social or political issue.iii.
Although Silicon Valley is often keen to present digital technology as the solution to every problem, it turns out most people (58%) do not believe it will, on its own, help solve the world’s most pressing societal challenges such as environmental degradation.iv. People do, however, have high expectations about the role that companies should undertake as society leaders in the digital economy. For instance, in the U.S., 66% of people want brands to take a stand on social or political issues.v.
The majority of people believe companies have a moral obligation to get involved in social issues, and they believe companies are credibly equipped to do so. This is especially true for millennials (23 to 34 year-olds), as 75% of them think multinational corporations have the potential to help solve society’s economic, environmental and social challenges.vi.
Traditionally, companies’ social involvement has taken the form of Corporate Social Responsibility (CSR) with varying levels of actual commitment - CSR often being secondary in the hierarchy of goals. In particular, the last several years revealed a considerable fatigue around CSR, where the primary purpose was to protect company reputation.
More recently, however, we’ve seen companies focus increasingly on clearer and more meaningful definitions of purpose and purposeful, with regards to their missions and brand propositions, respectively.
In addition, we see contrasts in the pace and breadth of innovation between emerging and developed markets in the sphere of social impact. Particularly in developing markets, the combination of an emerging middle class and constrained social systems (government, financial and educational) has generated a leapfrogging in solving global challenges, such as mobile payments. Emerging markets are also pushing the boundaries from a social impact perspective: consumers in Latin America, Asia, Middle East, and Africa are 23-29% more willing to pay a premium for sustainable offerings than consumers in North America and Europe.vii.
Companies can legitimately question the limits and whether strong stances would potentially alienate a portion of their consumers or employees, ultimately hurting their business. In the annual 2018 iProspect Global Client Survey, 98% of marketers believe it is the role of brands to be socially active.viii. The vast majority (72%) believe they should not only be active, but also vocal about their actions. Only 27% of marketers think brands willing to get involved should only do so for non-divisive topics, but, interestingly, this figure varies across regions and increases to 47% in Asia.
We’ve moved beyond an era where defining business sustainability beyond a profits orientation is a matter of personal opinion. In this regard, nearly 70% of CMOs report that connecting their brands to positive societal impacts is an important way to engage consumers.ix. In the iProspect survey, 82% of marketers declare their brand’s social commitment plays a role in their business growth, 47% stating it is either important or indispensable.x.
Unilever’s sustainable living brands (the ones with strong social or environmental purpose) delivered 70% turnover growth and grew 46% faster than the rest of the business in 2017.xi. The UK department store John Lewis has also reported that brands like Stasher or Bees Wrap, selling sustainable plastic- free food storage, have been driving the overall category, up 15% in 2018.xii. Not only does social responsibility resonate with consumers, but it also speaks to investors: analysing more than 2,200 empirical studies, Deutsche Asset Management and the University of Hamburg found that the large majority of the studies reported positive relationships between environmental, social and governance criteria corporate financial performance.xiii.
—Keith Weed, Unilever’s Chief Marketing and Communications Officer, Unilever Sustainable Brand Report, Unilever 2017
While the long-term positive effect is clear, there can also be immediate impact for brands tackling social issues. Most emblematic is the recent Nike campaign featuring Colin Kaepernick that celebrates the 30th anniversary of the “Just Do It” slogan. Kaepernick, a professional athlete, became an international figure for kneeling during the U.S. national anthem as a protest against racial injustice. Although the spot proved polarising, Nike’s position proved credible to its core customer base, as demonstrated by its online sales, which jumped 31% after the campaign.xiv.
There are clearly short-term and long-term opportunities for brands to improve both their social impact and their business performance by embracing a higher purpose. However, to be credible in the eyes of consumers, authenticity is critical.
Dr John Izzo, a specialist in social responsibility, talks to two seemingly opposite traps of which brands should be mindful when defining their role in a more socially-conscious world.xv.
Some organisations want to get involved but spread themselves too thin, creating workstreams around too many social initiatives, therefore making little sustainable contribution. By contrast, other organisations see purpose merely as a storytelling exercise, focusing on crafting the society narrative instead of the substance of their initiatives. Both pitfalls can expose companies to consumer backlash. The first can result in a perceived lack of credibility in having what it takes to make a difference; the second can cause consumers to question the substance and transparency of the company’s motives, ultimately driving customers away.
An authentic company purpose is embedded within every layer of business and is a key component of its decision-making process. Product development, hiring practices, supply chain - the company’s purpose must permeate and align every facet of the organisation to transform intent into concrete actions. B Lab is a global non-profit set up to “harness the power of business to help address society’s greatest challenges.”xvi. To become a certified B Corporation a company must undergo the B Impact Assessment to evaluate how the company’s operations and business model impact its employees, customers, community, and environment. Today there are 2,500 B Corp certified businesses across 50 countries. The B Impact Assessment has the potential to become the benchmark tool to identify companies committed to both commercial and social impact.
Embedding purpose within the organisation requires focus from leaders to engage the entire organisation to drive impact by accelerating development across issues their company is qualified to address. Beyond galvanising the organisation, companies will increasingly work with partners outside their core expertise to meet unforeseen consumer demands.
Ashoka, a global non-profit, is dedicated to supporting the world’s leading social entrepreneurs whose innovations solve deep-rooted social problems.xvii. Several years ago, Ashoka started a movement around “changemaker companies.” These corporations pioneer social and environmental solutions by working hand-in-hand with their employees, consumers and strategic allies, including other social entrepreneurs in the Ashoka ecosystem. Since 2010, Boehringer Ingelheim, an Ashoka changemaker company, has worked to improve health in communities around the world. Despite working in the conservative pharmaceutical industry, Boehringer leverages the know-how and experience of Ashoka’s social entrepreneurs to drive breakthrough change.
Although companies with purpose can deepen their customer relationship through a set of clear values, a critical driver of success is always the quality of their product and customer experience.
For an organisation to be seen as credible for tackling social issues, it must also guarantee the quality and competitiveness of its product. It must delight its customers with excellent service delivery. A company with purpose articulated clearly and delivered competently and authentically earns credibility.
Be a company with purpose built into every level of your organisation and execute on it consistently across everything you do. Win talent through values which resonate with today’s future leaders. Trail blazers will infuse higher purpose at the core of their business models and deliver a best-in-class consumer experience, driven by intention to make the world not only a more connected place, but one that provides value for all.
This article is excerpted from Future Focus 2019: Searching for Trust. Download Future Focus 2019 for key insights and success stories on navigating truth and authenticity in 2019.
[viii.] iProspect 2018 Global Client Survey
[x.] iProspect 2018 Global Client Survey