It seems that almost every article you read about Purpose does little more than outline convoluted explanations about what the term means. A huge amount of time and effort has been spent explaining the difference between Purpose and related concepts of mission, vision, sustainability and citizenship.
It is time for the talking to stop and action to start. Edelman knows from practical experience of working with world-leading brands what Purpose is. Moreover, we understand how Purpose delivers real business benefits and positive societal impacts.
The starting point for action is to recognise that companies are generally a force for good. They generate wealth, create jobs and (for the most part) pay their fair share of taxes. Simultaneously, they provide the products and services we all want and need. However, in undertaking these activities, companies contribute to the biggest global challenges – excessive resource consumption, environmental degradation and social inequity.
Yet companies are not powerless. Quite the contrary, they shape culture and influence society in a positive and meaningful way. Companies possess the resources, reach, knowledge and expertise to address some of society’s most pernicious issues. And they can do this while delivering business value and growth.
This is Purpose. The planned, strategic and carefully managed intersection between what a business does and the positive impact it has on people’s lives and the world around us.
So why has Purpose become such a buzzword? At its simplest, the answer lies in the convergence of two broad trends.
The first is the growing global consensus that urgent action is required. For example:
The second global trend is that people are increasingly expecting business to take action. Data from our own Trust Barometer and Earned Brand surveys show that people trust business more than government to “do what is right”. Specific findings reveal:
64% of respondents believe CEOs should lead on change rather than waiting for government to impose it
57% of consumers are buying or boycotting brands based on their position on a social or political issue
Notably, 76% of investors say public companies should address one or more societal issues.
The convergence of these trends is positioning Purpose at the heart of what people want and expect from brands and companies.
The strategic response
When a company is true to its Purpose, it sets the strategic direction for commercial success and articulates how it will respond to stakeholder concerns to achieve its goals. There are five key steps in this journey:
1. Defining Purpose: The starting point is to understand and define the unique contribution your business makes to society. Beyond your economic contribution, what are your most important social and/or environmental levers for change? What does your company stand for? At Edelman we work with many Purpose-driven businesses, including Unilever and REI.
Unilever has a clear and straightforward Purpose – to make sustainable living commonplace. The business is synonymous with its Sustainable Living Plan which sets transparent targets for responsible growth.
REI, the US-based national outdoor retail co-op, has a simple and powerful Purpose – to inspire, educate, and outfit people for a lifetime of outdoor adventure and stewardship. Three years ago, they started their #OptOutside movement that has inspired over 15 million Americans to enjoy life outside.
2. Stress testing the business: The next step is to ensure that every aspect of your business is true to your Purpose. For a consumer goods business, this would mean mapping out your complete value chain from sourcing raw materials through to the disposal of your products. At each stage, you must manage risks and explore opportunities to create shared value in the supply, manufacturing, promotion and use of your products.
3. Scaling engagement: With your Purpose strategy in place, it is vital to bring this to life. This involves collaborating with partners, engaging stakeholders and developing powerful programmes to drive meaningful and lasting change. These partnerships will connect through shared values, address issues of concern to stakeholders and tie into the priorities of the business.
4. Storytelling and communicating: Your efforts and actions will be amplified even further by communicating your Purpose to the world and inspiring others to join in. You need to develop campaigns that make your impact famous, earn you and your partners trust as thought leaders and articulate your impact in a relevant, memorable and authentic manner.
5. Measurement and evaluation: Throughout the whole process, it is vital that you evaluate the business and societal impacts delivered through your Purpose. This data provides the feedback needed to guide your activities and keep moving forward successfully. Ultimately the positive changes you measure will influence your operating context which in turn shapes your Purpose.
In 2017, Unilever’s Sustainable Living brands accounted for 70% of turnover growth and those brands are growing 46% faster than the rest of the business.
The #OptOutside movement hugely enhanced REI’s brand reputation – in the first quarter following the launch, job applications rose 92% and membership in the co-op saw nearly double-digit growth.
Actions, not words
The concept of Purpose has an extremely strong bias for action. It is about business behaving purposefully to deliver commercial success in a way that engages others to achieve truly important societal objectives. Purpose produces results by motivating all stakeholders to move in the same direction through a powerful combination of resources, enthusiasm and focus.
The time for talking is over. Purpose requires collective action by business and its stakeholders to deliver shared value on the issues that matter to all of us.