The business of purpose: finding, activating and nurturing your company’s why
You may have noticed: we’re talking a lot about purpose lately.
It’s not that we think purpose is any more important than marketing or public relations. We know they are symbiotic – each is an important element of the other.
Rather, our commitment to purpose is grounded in a core belief. If business leaders want to make a tangible difference in the world while establishing a successful, long-lasting company, purpose is critical to making that vision a reality.
Here are three reasons why.
#1 Principle pays off
We recently conducted a survey of more than 80 marketing executives, “Purpose in Practice: How Marketers Define, Communicate and Measure Organizational Purpose,” in which respondents unanimously agreed purpose activation is directly linked to the financial success of their business. This tells us while purpose is not about making money, it certainly increases the likelihood.
Those same participants cited three areas where purpose can have a positive impact:
- Corporate reputation
- Employee retention and recruitment
- Increased sales
We know corporate reputation has an impact on revenue and long-term business success – why would public relations exist, otherwise? The same goes for retention and recruitment. If companies were uninterested in retaining or recruiting high-performing staff, why would they invest so much into human resources?
Defining and activating a corporate purpose is no replacement for any of these functions, but purpose can serve as a tool to elevate and align their work throughout a business of any size or industry.
Consider the Great Resignation — or, as Gartner puts it in their latest survey, the Great Reflection. According to their research, the COVID-19 pandemic caused 65% of employees to rethink how work fits into their lives and to reevaluate their lives outside of the workplace. These are people looking for more than a paycheck alone. They are seeking a purpose to get behind.
That is why, we believe, a similar McKinsey study found employees who get the purpose they want from work report better outcomes – at work and in life – than their less-satisfied peers. 63% of those surveyed even said they want their employer to provide more opportunities for purpose in their work.
The future of work is purposeful, and marketers are in a powerful position to take the lead on this conversation. No one team or group can own the purpose discussion outright, but as the focal point for how an organization expresses itself inside and out, we can make sure the discussion happens.
Then, we will all reap the benefits of a financially successful business that also serves as a force for good in this world.
#2 Purpose informs ESG
Half of the marketing professionals we surveyed have been asked to promote their company’s environmental, social and governance (ESG) vision, strategy and performance.
Audiences care about ESG. Whether they are customers, employees, partners, shareholders or even the general public, audiences want (and expect) businesses to address their impact on society and the environment. For publicly traded companies, the issue may soon go further, as regulators may require businesses to disclose ESG efforts in their reporting.
All of this is to say, it’s difficult to report on ESG without starting from a place of purpose. The founder of the Centre for Corporate Reputation at Oxford University, Rupert Younger, says “You need to make sure that your ESG commitments deliver on the goals your purpose sets. The pitfall is that you may state a purpose but have no plan to deliver on it, or you may have a plethora of ESG programs, but nothing ties them together in terms of that North Star.”
If your business’s ESG efforts and purpose are disjointed, telling the story of your company’s impact will be difficult. Sure, there are metrics built into most ESG frameworks that every company should evaluate, like carbon footprint reduction and workforce diversity. But to build and measure a more strategic and meaningful ESG program for your organization long-term, defining and activating a corporate purpose is imperative.
As Euphemia Erikson of Donnelley Financial Solutions (DFIN) puts it, “A company’s purpose is like a piece of art. ESG is the conversation about that art.”
Take the time to develop a true masterpiece, and the conversation about ESG will follow.
A humanitarian catastrophe is unfolding in Ukraine as attacks of war put millions of lives at risk. Innocent families, women and girls, young adults, students and elderly will suffer. Consider donating today.
#3 An economy for all
More than 50 years have passed since Nobel economist Milton Friedman famously stated, “The social responsibility of business is to increase its profits.” The world looks like a much different place.
In 2019, more than 180 CEOs in the Business Roundtable defined a modern standard for corporate responsibility – one that moved beyond shareholders alone to benefit all stakeholders, including customers, employees, suppliers, communities as well as shareholders.
“While each of our individual companies serves its own corporate purpose,” their statement says, “we share a fundamental commitment to all of our stakeholders.”
That commitment is to create an economy for all people. While the statement was geared toward American corporations, we believe it applies to business everywhere.
The Russian invasion of Ukraine is a powerful example of this commitment in action. Companies of all sizes are taking a stand and using their corporate purpose to guide them.
Apple, for instance, halted the sale of iPhones and other products in Russia. Ford suspended its joint-venture operations in the country. Oil and gas corporations are divesting billions of dollars in Russian assets, and sovereign nations are banning Russian energy exports. The list continues to grow.
For those multinational corporations with team members living and working in Ukraine, these steps may be self-evident. But we are also seeing companies with little or no presence in Ukraine take action.
What we can say definitively is that stakeholders today expect more of a corporation than before. The public wants to see more leadership from business, not less. To fulfill that need, businesses must ensure their decisions start from a place of purpose – one they can identify as a company, activate with stakeholders and believe in each day.
Purpose can be a difficult subject to talk about, but it’s a conversation we’re dedicated to having. If you have any feedback or thoughts you want to share, please reach out to us at email@example.com.