As a brand agency that helps to transform businesses and brands with purpose, we’re delighted to see leading corporate advisors like Deloitte, KPMG and EY embrace the power of purpose for organisational change.
But what is this thing called purpose? As purpose becomes an increasingly important part of the compassionate business conversation, it’s worth underlining what purpose is and what purpose isn’t.
Purpose is more than ambition or mission
Doubling the size of your business is an ambition. “Making sustainable living commonplace” is a purpose: one which has led consumer goods giant Unilever to adopt the vision of doubling its business while reducing its environmental impact and promoting positive social outcomes.
Increasing market share in the baby food sector is an ambition – “developing healthy eating habits that last a lifetime” is the purpose that drove Ella’s Kitchen to become the UK’s best-selling baby food in less than a decade. Firms like Patagonia and Tesla have all shown that having a purpose that connects to a greater good goes hand-in-hand with growth and commercial success.
Purpose is more than CSR
CSR gets knocked a bit these days, so it’s easy to forget that the world was a much worse place before businesses started to face up to their responsibilities as corporate citizens. We should celebrate corporate social responsibility – up to a point.
CSR is great for establishing “basic hygiene” – clean supply chains, good working conditions – and for “giving back” to the community through acts of philanthropy. These acts are important: like most firms, we take part in charity bake sales, polar plunges and half-marathons (in fact, we’ve just twinned our toilet).
But purpose goes further. With CSR, companies do good as an add-on (or, dare we say it, an offset) to their usual activities. Purpose means putting positive change at the heart of your products, services and strategy.
Purpose is more than environmental sustainability
By all means keep recycling, choosing green suppliers and thinking before you print. With the COP21 talks just finished in Paris, now is as good a time as any to make sure your business is playing its part in the global battle against climate change by reducing your environmental footprint and adopting sustainable practices.
But purpose gives us permission to think even bigger. Recent events in Paris – negative and positive – offer us a moment to step back and think about all of the major global challenges we face.
As David Hieatt put it in his fantastic book Do Purpose, purpose comes from the sweet spot where your love and passion, your skill and the zeitgeist overlap. How does your core business activity fit into the wider picture? What is your purpose beyond profit? Answer this question and you will come closer to making a positive impact in the world, beyond simply reducing your negative impact.
Purpose IS a growth strategy
Purpose speaks to the very core of your business. This is what makes embracing purpose such a powerful strategy for growth. A clear sense of purpose will guide you into new markets, new products and towards new customers and partners.
The evidence shows that purpose-led brands outperform. To pick some concrete examples, Unilever announced earlier this year that its purpose-led brands, such as Ben & Jerry’s and Dove, were growing at twice the speed of the rest of its portfolio. And of course, a clear sense of purpose and social values has powered brands like Innocent Smoothies to grow from SMEs to global concerns.
Purpose IS a purchase trigger
Purpose inspires customers. A 2012 Edelman survey revealed that over half of consumers will pick the purposeful brand when price and quality are the same. And customers don’t just buy from purposeful companies: they become advocates. The same survey showed that 72% of global consumers would recommend a company with purpose to others, a 39% increase from 2008.
As the business thinker Simon Sinek says, “people don’t buy what you do, they buy why you do it”.
Purpose IS an investment driver
The evidence shows that having a clearly communicated sense of purpose driving your business at its core will build confidence, drive business investment and attract new investors.
Purpose can also help you find new sources of investment. Businesses with a clear social purpose can access diverse funding sources from the booming social impact investment sector, a market estimated at £3.5 billion by crowdfunding platform Ethex. A growing movement of both retail and institutional investors are increasingly using platforms like Ethex and the Social Stock Exchange to make purpose-driven investments in firms that make a difference.
Conclusion: the future belongs to businesses with purpose
Since embracing the purpose imperative in our own agency almost ten years ago, we have repeatedly seen how businesses of any size and sector can flourish by putting purpose at the heart of their strategy, culture and operations.
Get your purpose clear, and it will act as both your engine and your compass. Can you afford not to build your business on purpose?
Graham Massey is the business head of The House, a consultancy that believes valuable businesses are born out of purpose.