If your business really wants to become purpose-driven, commitment must be embedded at a business level and not just a marketing one, says Director, Rick Benfield. As part of Re_Set’s new ‘Best Practice’ series, he shares the five steps to getting it right
The benefits for a company of being viewed as purposeful are bountiful. According to a study by Cone/Porter Novelli, nearly 79 per cent of US consumers say they are more loyal to purpose-driven brands than traditional brands, with more than three-quarters (78 per cent) saying they would tell others to buy from these companies, too.
But wait! Before you brief your marketing team – a word of caution: if your business purpose isn’t authentic – genuinely believed throughout your organisation and demonstrated in your actions – going out all guns blazing with a message of purpose is a high-risk tactic that could backfire spectacularly.
The companies most at risk of purpose washing are those who see an opportunity to jump on the bandwagon – often long-established brands that bring in a marketing agency to craft a new purpose-led tagline without depth and without aligning the values and the strategy of the organisation.
At some level, we get it. It’s hard to reposition a brand as purpose led. We can’t all be ‘purpose-born’ like Patagonia or Toms – businesses set up with strong social or environmental missions at the core of the business. But that’s not to say all businesses can’t strive to be better.
For companies that want to make the move, there are some fundamental areas that need addressing. Be warned: none are quick fixes. This will definitely be a journey.
Five steps companies can take to avoid purpose washing
1. Be authentic
As with any big change, a move towards purpose needs to be driven, authentically, from the top. The CEO and front-line managers need to embrace purpose-guided decision-making and have strong emotional intelligence to understand and engage both employees and customers.
You must also back up words with actions and be consistent with it. For example, if you say climate change is an important topic for the company, be prepared to share what you’re doing as a business in terms of investment and action, to demonstrate progress and commitment to the cause.
2. Align your strategy to your purpose
It’s not enough to publish a purpose statement and set of values and be done with it. Purpose as a concept is no longer just about the why – it’s about how. How are you going to use purpose to guide strategy and make better decisions?
A clear, purpose-led strategy with articulated goals is essential. Particularly when it comes to sustainability. Indeed, at Re_Set, we see strong sustainability ambitions as integrally linked to a purpose-led organisation.
3. Hero your employees
If you want your purpose to live and breathe, it must begin with your employees. People matter and investing in them and valuing them is what drives growth. Your employees in turn will support your customers, which in turn takes care of your business results.
This is about people bringing their whole selves to work. Gone are the days of having to be a different person or have different values inside and outside of work.
Purpose should also be a visible component of your employee rewards, recognition systems, promotions, and incentives. Employees that push the purpose agenda should be rewarded for it.
4. Postpone that splashy ad campaign
Some organisations believe a cause-related campaign will show they care and have a purpose. Purpose washing campaigns often begin because a business leader is passionate about a cause or triggered by a recent event and wants to help.
Often the idea is well-meaning, but a rushed execution can lead to unintended purpose washing. See the collaboration between Pepsi and Kendall Jenner as a good example.
A company should take big internal strides first, before promoting and advertising its purpose credentials – otherwise they risk derailing a genuine commitment to change as internal and external critics call foul.
Customers today are savvier and more questioning, while social media has increased transparency – led by both internal whistle blowers and external observers. Companies must be prepared for rigorous scrutiny if they seek to gain competitive advantage through advertising their purpose credentials.
5. Be patient
It’s not possible to become purpose-driven overnight. It’s a fundamental shift in how an organisation runs and operates – and that will take time to implement.
We know it’s hard. Research shows 61 per cent of business leaders still focus on short term profit goals and sacrifice investments that will lead to long term success – including cutting investments in employees.
Yet your patience will pay dividends. Purpose driven leaders that hold true and continue focusing on the long term earn not just the loyalty of employees, but it also helps to create a feeling of stability and galvanises the company towards a north star with a clear moral compass guiding the direction the company is heading in. This unites an organisation, driving improved performance and, ultimately, better returns for shareholders.
It’s hard to argue with the figures: according to Kantar’s Purpose Study, purpose-led brands saw their valuation surge by 175 per cent over the past 12 years, versus a growth rate of just 70 per cent for brands uncertain of their role. Meanwhile, an Interbrand study found that brands with a purpose set on improving our quality of life outperform the stock market by 120 per cent. The message? Be true to your purpose and it will bring you huge rewards.
Rick is a Director at Re_Set. Read more from him here
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