The new era of purpose can change the world for good
The world is engulfed by a number of complex challenges. Climate change presents an existential threat to our way of life. Advances in technology are creating major ethical implications for our privacy, health and job security. Gender and racial inequality still prevail. As 2019 begins, it is unsettling to see that instead of uniting around potential solutions to these challenges, society is becoming more fractured.
Yet, there is cause for optimism. Over the past ten years, extreme poverty has decreased from 21.3% to 8.6% globally. Child mortality has fallen by nearly a third. Life expectancy and literacy levels are both on the rise. Another development should also give us optimism – the growing willingness of business to drive social change as well as deliver financial returns. Increasingly, companies are discovering their social purpose.
The social purpose of a company
The complexity of these social challenges and the need for urgent solutions has driven home for many the view that no one organisation or sector can solve them on their own. Governments, besieged by trust deficits, financial constraints and political deadlock will struggle to tackle a host of social challenges without leadership from business or non-profits. It is telling that Theresa May and Donald Trump will not attend the World Economic Forum in Davos this year because of political and constitutional crises in their respective countries.
The world is turning to inspiring business figures such as Paul Polman, formerly of Unilever and Rose Marcario of Patagonia to provide that leadership. BlackRock’s Larry Fink has again penned a compelling letter to chief executives stating that “purpose is not the sole pursuit of profits but the animating force for achieving them”. For us, a company driven by a social purpose must continually ask itself “How does the core of what we do as a business create social value as well as financial value?”
There are other drivers of this new era of purpose. In 2019, Millennials and Generation Z will account for over 60% of the world’s 7.7 billion people. More than preceding generations, the decision of who Millennials and Generation Z invest in, work for and buy from is heavily influenced by the reputation of a company for being purpose-driven and having a positive social impact. According to Ipsos, social activism and ethical buying is on the increase amongst Generation Z and is even higher than it has been with Millennials.
Investor pressure is another key driver. Over the past ten years, assets in US funds that prioritise social or environmental benefits as well as financial returns increased by four times to $12 trillion, whilst BlackRock predicts that global assets in Environmental, Social and Governance Exchange Traded Funds will grow from $25 billion today to $400 billion by 2028.
The communication challenge
In our experience, a substantial number of companies do create value for society but struggle to communicate what they stand for to their key audiences in a persuasive manner. Attempting to build a reputation as a purposeful company can only work if the business practices and culture are actually aligned with what a company communicates. The benefits of being a purposeful company are contingent upon effective communication with internal and external audiences. Strategic communications is a critical enabler of social purpose. We believe that some companies struggle in this area because of the “AAA” problem – articulation, attention and authenticity.
First, articulation. Companies must find a way of expressing what they stand for that captures the totality of what they do as a business without being too generic. That unifies their employees to drive progress and that resonates when people come across it. It should be unique to the company, reflecting its heritage and roots but should also be outward looking.
Second, attention. Even if an organisation has a clearly defined social purpose, it now has to deal with a noisy world, where other companies, activists and organisations are competing for attention. What makes that company or non-profit entity distinctive? How does it stand out from the crowd?
Finally, authenticity. Even when a company does have a distinctive position, how does it connect with audiences that demand authenticity? Even those with the best intentions can be accused of jumping on a bandwagon or trivialising an issue for marketing benefit.
What good looks like
At Purpose Union, we think there are several strategies that can be developed to tackle these challenges.
One important approach is to identify a specific “hero” issue that is directly connected to a company’s social purpose. Rather than trying to convey messages on a range of different issues, the hero idea should be the focal point of the company’s communications. That approach requires discipline, but a focused, consistent and sustained campaign will help to secure cut-through.
Companies should also be prepared to get involved in difficult social debates. Engagement in sustained advocacy and creating a call to action helps to create authenticity.
Gillette’s recent campaign on ending toxic masculinity is a great example of a brand taking a position on an important social issue. The company released a bold advertisement that had a clear call to action for men to change their behaviour, which sparked a global debate. The brand has committed to changing the way it talks about men in the future and has also committed resource to several programmatic initiatives designed to change behaviours. Companies who are willing to continue an argument in the face of opposition acknowledge the importance of authenticity.
We also believe that coalitions are a vital part of any social purpose initiative. The complexity of many of the world’s most pressing challenges means that no single organisation or sector can solve these alone. The establishment of structured, multilateral coalitions between the public, private and social sectors can leverage the power the group has to reach a wider audience.
The prize at stake
The benefits of standing out by up standing up heavily outweigh the risks. A reinvigorated workforce; loyal consumers who differentiate your brand from others; millennials and Generation Z who identify with you; and socially conscious investors who increasingly demand that their funds should be used to generate financial returns whilst also having a positive social impact.
At Purpose Union, we believe it is possible to be a successful organisation whilst changing the world with purpose.
Lewis Iwu, Daniela Flores and Barry Johnston
Co-Founders of Purpose Union