Purpose is power. Increasing numbers of consumers love brands that share their values – and good employees are ever more choosy about who they want to work for. Apart from purely economic motives, there’s also the question of simply doing the right thing.
But is making a positive difference a luxury that’s out of reach for everyone except the big corporates? And is that even the reason businesses should exist? If it is, what can your business do to make a positive difference to planet and people?
What is purpose?
It’s a hot topic at Wrapped. We often start out discussing purpose and spin off down a rabbit hole peppered with a swirling mix of promise, vision, mission, values, the ‘Why’, behaviours and causes. And that’s before you even start thinking about strategy, goals and dreams.
The brand-driven brains among us tend to ditch the do-gooding elements, preferring to think about purpose in the sense of a general reason the brand exists.
Others focus on the idea of a more corporate social responsibility (CSR) goal; something that links to doing good.
Others still go for a mixed bag, favouring an ethical purpose for employees to collectively get behind, but presenting a more prosaic face to the outside world.
And some even say that most SMEs don’t need to worry about it at all – just get on with the job.
And there’s an element of the inarguable about that latter point. Our clients tend to have plenty to do without swanning around honing a vision statement that no-one ever reads.
So how might purpose propel your business to a better future?
Take it higher
One effective way of bringing clarity to the whole tangle is to think separately about purpose and higher purpose.
Brand purpose, in the traditional sense, sticks to the idea of being what you believe and what is true to you.
Increasingly, though, customers, employees and those further up the supply chain want to spend their money on, or work with, businesses with a higher purpose; what your business or brand can uniquely contribute to the good of the world.
This used to be part of a CSR policy – if a business was big and rich enough to have such a luxury. But now we’re seeing more and more businesses break it out of the CSR jail and into everyday life. And that’s something every business can do.
Let’s take a look at why purpose is so important.
Why bother with purpose?
There are many reasons to get behind purpose. Remember the early days of the pandemic, when communities were drawn together by a shared sense of pulling together through the crisis? That was basically a giant version of purpose. And when you break it down, it’s powerful in many ways.
Why is purpose powerful commercially?
According to marketing agency Iris’s Participation Brand Index, as many as 80% of brands are failing to connect emotionally with customers. A whopping 77% of consumers no longer trust brands and 57% don’t feel comfortable sharing their data.
If this plummeting scale of trust is correct, businesses need customers to understand them and trust them. Establishing and communicating a clear purpose is an excellent way of doing this.
Consulting firm Deloitte’s research backs this up. A 2021 study discovered that purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.
In fact, there’s a tonne of evidence that clarity of purpose isn’t a luxury: it’s a policy that will pay.
Why is purpose powerful for your workforce?
But the benefits aren’t only external. An article in Forbes gathered together a series of compelling studies, all pointing towards the value of purpose to employees. By 2025, millennials will make up 75% of the workforce – and they’re looking for socially responsible employers.
As many as 64% of millennials say they won’t take a job if their employer doesn’t have a strong CSR policy. And it has been suggested that Gen Z (born between 1997 and 2012) is the first generation to prioritise purpose over salary.
The talent revolution means that to futureproof your business and attract the best and the brightest, you’ll need to instill inspiration into their lives, showing them how their work contributes to something more than just a quarterly profit goal.
Why is purpose powerful for your business?
Brands that hold on to their purpose stand to benefit in other ways, too.
Clear purpose has long allowed companies to be more focused, streamlined and efficient – and make better decisions under pressure. And we’ve certainly experienced plenty of pressure over the last couple of years.
Businesses that have adjusted to the challenges, providing both employees and customers with support, advice and resources, have gone a long way to establishing themselves as trustworthy sources of truth.
In a 2020 interview in The Grocer, Linda Ellett, UK head of consumer markets at KPMG said: “Alignment between the short-term decisions and long-term direction help to ensure that tactics and strategy work hand in hand. Never has that been clearer than during the current Covid-19 situation, where brands are actively seeking out and expressing the contribution they can make to the way their consumers handle the hurdles ahead.”
Having a clear purpose helps massively with decision-making.
If you have a firm idea of what your business is all about, you can easily reject any temptations that might steer you off course.
Why is higher purpose powerful for the planet?
The deafening message from COP26 was that big business needs to act fast if we’re going to get anywhere close to making the effects of global warming less catastrophic.
If you’re a small business, you might think you don’t have much impact next to these carbon-churning monoliths. But what if small businesses banded together?
In fact, the future might be less about your business and more about getting together with organisations you once saw as rivals.
That’s certainly the message from the sustainability movement. Why duplicate research and solutions when you could come together and pool resources?
In the Grocer article mentioned above, Eleanor O’Leary, founder of The Better Brand Consultant, said, “We might start to see the concept of purpose shift towards real, embodied responsibility. Instead of company-specific purpose, the notion of a common purpose and working together towards the greater good could become more important.”
Why purpose isn’t just a luxury for big business
Smaller businesses can take heart from research business Gartner’s latest findings on purpose, which suggest that while pay is always important, it’s certainly not the only motivator.
A survey of more than 3,500 employees around the world in October 2021 found that 65% said the pandemic had made them rethink the place that work should have in their life. And 56% said it made them want to contribute more to society.
Big topics to consider. And while fair pay is an important part of feeling valued, people also want to be seen, nurtured, trusted, respected and able to be their true selves at work. I’m not for a moment suggesting that purpose should be brought in as a smokescreen for poor pay – quite the opposite. But if you’re investing in a purpose process, it’s worth knowing that employees who feel they’re an important part of something bigger are less likely to quit.
In part 2, we’ll look at inspirational, purposeful brands – and get down to the nitty gritty of defining your own purpose.