Navigating Our New World Through Purpose-driven Enterprise
South Africa, along with the rest of the world, is experiencing one of the worst crises of this century. The COVID-19 pandemic has taken an enormous economic and emotional toll and the country has recently also been victim of looting, rioting and unrest, adding to the challenge of picking up the pieces and rebuilding itself socially and economically.
The impact on organisations and brands has been significant. Many find themselves in a position where they need to navigate a reality where their products and services no longer have the standing they did prior to the onslaught of COVID-19 and current economic challenges. It may be as simple a question as how to connect with communities when storefronts are shuttered, or how to support workforces on the frontlines and working from home.
The Deloitte’s 2021 Global Marketing Trends Survey found that organisations and brands that are positioned to remain steadfast in one key dimension, namely their purpose, are the ones truly resonating with consumers. The survey showed 79% of respondents recalling instances of brands positively responding to COVID-19 to help their customers, workforces and communities.
The survey clearly illustrated that when an organization’s crisis responses are driven by a holistic purpose—connecting a business’s role in society to its long-term value—there is a clear alignment between its brand identity and a sustained commitment to all stakeholders—including customers, employees, suppliers, and communities, in addition to shareholders. Purpose-driven companies inherently understand why they exist and who they are best built to serve regardless of what they sell today.
These companies are guided by an authentic, enterprise wide purpose, turning tough decisions into simple choices by following the path that best aligns to and embodies their purpose. Purpose driven enterprises are also not only garnering more attention but also spurring consumer action. The survey showed that nearly one in four respondents strongly agreed that these purpose-led actions positively shifted their perception of the brand and one in five strongly agreed that it shifted their buying preferences in favour of the brand.
It is important to note is that, conversely, consumers were also well aware of negative brand actions which led to one in four consumers walking away from the brand thus proving that sustained commitment matters. Companies and brands can’t pick and choose when they lean on their purpose. It needs to be a long-term commitment that guides how an organization exists and needs to be presented in all actions ranging from internal employee engagement and branding, to the way the brand acts and functions in the consumer landscape. Without this level of commitment, public trust can quickly erode.
How does an organization then operate as an effectively purpose-driven enterprise? It requires a thorough understanding of why the organisation exists, who it is built to serve and ensuring it follows through on its promises with purpose-driven KPIs.
The ever-evolving dialogue around purpose has led to multiple interpretations of the term, turning the definition of purpose into a moving target. Purpose can represent the underlying motive behind why a brand sells its products and services, or it can be the platform that articulates why the organization exists in the world.
Since the COVID-19 epidemic and the recent unrest in South Africa, purpose led enterprises have illustrated their purpose in various ways, including providing free access to their products and services, partnering with other organisations to better support consumer needs, increased measures to protect the health and wellness of their employees, donating products or services to communities in need, to name but a few.
The Deloitte report refers to ‘Built to Flourish’; at LIVE+ we reference ‘Doing well, while doing good’ and – regardless of the endeavour – purpose-led brands and organisations need clarity in motive and a means of holding themselves accountable to the promises they make. Brand purpose and purpose-driven enterprise are not mutually exclusive endeavours. On the contrary, a purpose-driven enterprise aligns its brand purpose to a bigger enterprise-wide purpose. The ‘why’ behind an organisation’s products and services could be siloed from other important facets, such as talent and business partnership strategy. When purpose is managed in siloes, its meaning can be confused or - at worst - appear disingenuous. When an enterprise clearly puts its ‘why’ at the centre of its operations, purpose can be amplified and extended both within and outside the enterprise.
It’s one thing to put something on paper. It takes considerably more effort to authentically live out those words. Whether it’s upholding its promises to its customers or demonstrating its purpose across the value chain, organisations will benefit from promoting KPIs that ensure they are living out their purpose. The dimensions of focus in order to achieve this includes ingraining of measurement in policies, setting clear KPIs for teams and linking profit to purpose.
BlackRock CEO Larry Fink once said that purpose and profits are closely linked and, as such, require policies that align fundamental business decisions with purpose. In line with this BlackRock requests robust disclosures from companies regarding how they are adhering to industry-specific guidelines as provided by the Sustainability Accounting Standards Board. For those who fall short on these disclosures, BlackRock would increasingly conclude that companies are not adequately managing risk. Following these standards, BlackRock voted against or withheld votes from 4800 directors at 2700 different companies where there was a lack of sustainability disclosures.
As we’ve advocated countless times before, the consumer journey starts with the employee journey and the two are inextricably linked. To truly live out a purpose, the workforce needs to live and breathe its values and mission as well. Take Alaska Airlines for example, which employs annual engagement surveys to better understand how its employees perceive the company and engage in living out its purpose. In 2020 its goals were to ensure engagement scores are 80% or higher across company divisions. Organisations can build on this method by reporting to boards how these engagement scores are trending over time while simultaneously ensuring that purpose-related conversations are a foundational part of performance reviews.
If profit and purpose are linked, organisations should measure purpose driven outputs to demonstrate the value of adhering to a purpose – success helps secure buy-in and provides a line of sight into what’s working for the organisation. Take Unilever’s enterprise purpose is a good example citing their purpose as ‘To make sustainable living commonplace’. Unilever measures the performance of its sustainable living products vs the rest of its product portfolio. The results show sustainable living brands are growing 67% faster than the rest of the business and delivering 75% of the company’s growth.
A purpose driven enterprise requires multiple facets of the organisation to work in concert. Start-ups are able to integrate purpose into their operations from the ground up whereas large, legacy companies have a steeper hill to climb when they pivot to more purpose-driven initiatives.
It is important for marketers to weave purpose into their consumer strategies, ensuring these align to the purpose statement of the enterprise or brand; there are three steps recommended in the Deloitte report that will bring purpose to life for their consumers:
First up is owning the brand purpose: marketers are uniquely positioned to understand and articulate the ‘why’ behind the brand’s products and services. Bringing the ‘why’ to brand purpose can unlock creativity, inspire employees and create differentiation by building an emotional connection with consumers.
The next step is catalysing the enterprise purpose by bringing an ‘outside-in’ perspective to C-suite conversations. This could mean speaking to corporate reputation or bringing data to the table that sheds light on current perceptions of the company, relative to the competition.
Lastly, fusing brand and enterprise purpose where it is appropriate. If an organisation’s CSR initiatives are a major reason for its consumers being loyal to the brand, marketers can work directly with public relations to help ensure alignment between the messaging for the band and enterprise’s purpose. If not, marketers can work with the CSR team to strengthen the enterprise’s voice in the marketplace.
The COVID-19 pandemic has shown us that companies that know “why” they serve their stakeholders are uniquely positioned to navigate unprecedented change. When purpose is embedded across the entire enterprise, organizations can live it out across the value chain to fulfil the hopes of their stakeholders and have a positive impact on the planet and the communities they serve.
The Deloitte Report proves two global trends that suggest organisations can do better than ‘well’ by ensuring their enterprise purpose and ensuing CSR initiatives are focused on making the world a better place. These trends are:
The world is shifting into the social enterprise: the social enterprise’s mission combines profit with societal impact. Notably CEO’s often cite ‘impact on society, including income inequality, diversity and the environment’ as their most important success measure. Millennials and Generation Z are also most likely to support companies that share their values and walk away from those that don’t hold themselves accountable to such values.
The world is looking to businesses for solutions. According to the Edelman Trust Barometer, which surveyed 34 000 individuals in 28 global markets, people see business as the most competent group to solve global issues, even more so than non-profits and governments.6 Notably, respondents suggested that stakeholders including communities, consumers, and talent are most important to an organization’s long-term success (only 13% noted shareholders as the most important stakeholder).
Increasingly, the “brand” represents how people perceive the organization, and consumers are gravitating toward enterprises that support socially important endeavours. Keeping this in mind, organizations should infuse a societal dimension to purpose throughout the enterprise to effectively answer the call of stakeholders.
Sources: Deloitte Global Marketing Trends 2021