When defining a successful business, making a profit will rank highly among the requirements. It’s what keeps organizations afloat, sustains its growth and – ultimately – pays its employees.
But for any forward-thinking business in 2022, being profit-driven isn’t enough. Customer expectations have shifted, and so too has their definition of what a successful business is.
Now, it’s about what you stand for, your impact on society and the causes you support. From sustainability to fair employment practices, being ‘purpose-led’ matters.
Taking a stand
In many ways, this shift from profit to purpose can be linked to the pandemic. Two years of constant change, disruption and upheaval has left deep and emotional scars on billions of consumers worldwide. Sick or not, most of us were impacted by the imposition of strict lockdown restrictions, social distancing measures and risk of unemployment. This overload of anxiety, anguish and negative emotion has altered the way consumers spend their money.
Not only have many of us tightened the purse strings but many consumers have now decided that when they do spend their money, they’re going to do it with brands that best reflect their personal values. After all, one way to make sure you’re getting the most for your money is to make sure your purchases advance the changes you want to see in the world.
But it’s not just customers who have been affected by the events of the past couple of years – it’s had a significant impact on employees, too. The question of where we work, how we work and even why we work has changed, and this is something businesses have had to respond to in order to retain their best people and recruit new talent. Offering a competitive salary isn’t enough – now your policies on hybrid working, sustainability and diversity will be called into question, too.
Becoming purpose-driven
To be purpose-led, an organization has to stand for something it believes in. It has to reflect the wider world we live in and keep pace with social change, for example the recent condemnation of Russia’s conflict with Ukraine and the Black Lives Matter movement.
Recognising worldwide events and communicating your organization’s stance on them is indicative of a progressive, forward-thinking company that cares about its customers and communities.
“When you talk about culture, we’re talking about external societal culture,” an executive at a leading, European pharmaceutical firm recently told speakers on a Meet the Boss roundtable event.
“We’ve seen big changes with Black Lives Matter and LGBTQ+ movements in the past couple of years and we didn’t want to simply dictate what we were going to do as a company.”
“We asked our employees to engage with us on the initiatives they felt passionate about and define to us as a business how we should represent those issues.”
“I know it can be controversial, but it’s important to show we are supportive of societal issues.”
Talking the talk and walking the walk
But while some businesses may feel comfortable talking about their purpose-led work, getting executives to act on those commitments is another thing altogether.
Accenture Strategy’s most recent Global Consumer Pulse Research report, which surveyed nearly 30,000 consumers in 35 countries, found 62% want companies to take a stand on issues such as sustainability, transparency and fair employment practices. Of those, 66% of consumers ranked transparency as a brand’s most attractive qualities – which is why if an organization sets goals to reduce its carbon footprint, for example, it best have the drive, determination and data to achieve this.
One company that knows all about the value of setting ambitious – but achievable – sustainability goals is Manulife, which is a Canadian multinational insurance company and financial services provider based in Toronto, Ontario. Their Global Director of ESG Brooke Tucker-Reid recently delivered a keynote address during GDS Group’s Next Generation Banking Summit, during which she explained why purpose matters and how they’re making it happen.
“It’s important to set a target you know will create a real benefit in the area you’re looking to create a target for,” Brooke explains.
“It has to be ambitious but also somewhat achievable – and accountability is key to that.”
“And I can give you one example of that. We set a target to increase representation of Black, Indigenous and people of colour (BIPOC) talent at the director level by 30% by 2025, and so far we’ve achieved 17% of that target so we know we have a lot more work to do but it’s just one way of how we’re showing transparency and accountability towards meeting that target.”
Brooke acknowledges that one of the biggest challenges for organizations and their ESG strategies is keeping pace with change.
But her advice is to be curious and ask questions.
“My boss often says it’s hard to be an expert in this space when you may have had an education in this space from five, ten years ago. It’s changing so much and so you really have to commit to that lifelong mindset” she adds. “Be curious, ask questions, turn model’s upside down, re-think the way that solutions can be addressed because we can’t settle into the inertia of how things have always been done – especially when there are several pressing issues that need urgent and timely attention.”
So, what matters?
In NielsenIQ’s corporate social responsibility survey, 55% of global respondents said they are willing to pay extra for products and services from companies that are committed to positive social and environmental impact.
In their 2016 survey, 56% of participants said “a brand being known for its social value” was a top purchasing driver – and 53% of participants said “a brand with community commitment” was a leading purchasing driver.
The key concerns identified in various studies show the environment, mental health, diversity, LGBTQ+ equality and gender equality consistently rank highly among consumers. Veteran affairs and gun control have also featured prominently in US-led surveys while poverty eradication, fair trade and animal protection have featured in European polls.
As organizations embark on their purpose-led journeys, it is clear that leaders who commit to real action will deliver the greatest value – both to their stakeholders and their customers.
And the greater the number of businesses that adopt purpose-led initiatives, the faster the world can make meaningful, lasting progress. The path to a more equitable, sustainable world is clear for those who choose to take it.
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