Why Purpose?

"The secret of success is constancy of purpose"

Benjamin Disraeli

There is a new world order emerging for business – a world in which the single minded pursuit of profit, without consideration for the social and environmental impacts on the world around it – is no longer tenable. Here is how this world has emerged:

The Push

Expectations placed on organisations are changing in so many ways.  New research shows that consumers – particularly the all-important next generation of purchasers (known as Millennials and Gen Z) – are highly sensitised to social and environmental issues, and expect business to take much greater levels of corporate responsibility.

This generation are not only the customers of today and tomorrow, but also our future workforce.

There has also been a shift in stance by governments and civil society, with bodies such as the United Nations specifically stating they will be unable to reach the Sustainable Development Goals (SDGs) set in 2016 without the help of the business community.

Business is being asked to step up. To become more than a feel-good brand or a profitable company.  To truly be part of the solution to the most pressing challenges facing us, on a local, national and international scale.

By 2025 Millennials & Gen Z combined will make up 75% of the global workforce.

The Pull

Global spending on ‘responsible consumption’ (RC) products currently stands at $400bn (£262bn), with 15% of all grocery sales accounting for two thirds of the growth in the market. In the US, sales of RC products have grown around 10% annually over the past three years[1].

Those businesses that can point to having a strong social and environmental purpose are acknowledged to be more profitable and have faster growth than traditional profit-only focused businesses.  A recent Harvard Business Review study by EY into the link between business success and purpose found that those who prioritise and articulate a clear purpose outperform ‘purpose laggards’ by 50%. 

Meanwhile, trust in all institutions is at an all-time low; customer loyalty is an increasingly rare commodity. Add in social media keeping a constant vigil on company promises and behaviours, and there is nowhere to hide for companies that say one thing, and do another.

Your hard-earned trust is easily squandered.

It is clear that the era of hyper-transparency for all organisations is here. Organisations need to respond by opening up and being prepared to deal honestly with any skeletons in their closets or areas of weakness. Customers and employees don’t expect you to be perfect – instead brands will benefit from exposing their journey of  improvement.

Increasingly, more nimble forms of business such as social enterprises and B Corps are emerging, showcasing a new breed of entrepreneurs who are passionate about using commercial approaches to create real and positive change in the world.

Companies need to show that they are Fit for Purpose in this new world.  Audiences are savvy and only those companies with an authentic purpose, clearly articulated and strongly adhered to, will continue to thrive.

[1] Boston Consulting Group, 2015 (https://www.bcg.com/publications/2014/consumer-products-sustainability-social-responsibility-leads-growth.aspx)