If you read business media and blogs, you could be forgiven for thinking that the corporate world has just woken up to the fact that there is a world beyond growth figures. As far as corporate reputation is concerned, being a purpose-led business suddenly seems as important as making a profit.
But there is nothing new about companies having a purpose beyond profit. The Rochdale Pioneers founded the first modern Co-Operative Movement in 1844 while industrialists such as Sir Titus Salt and the Cadbury brothers, John and Richard, sought to raise the conditions of the working poor.
The early years of the 21st century have seen a massive resurgence in the number of companies expressing purpose beyond profit as core to their business model. Not without reason. It’s fashionable to criticise the mainstream media, but investigative journalists and the rapid development of global communications over the internet have opened our eyes to the link between unfettered capitalism and social degradation.
Corporations now recognise they must play their part in solving the world’s greatest, some would say existential, problems.
The benefits of purpose-led business practices
In their report, The Courage of their Convictions, Danone and Tomorrow’s Company use interviews with 20 companies who espouse a purpose beyond profit to distill the benefits and the ways to succeed.
These benefits included:
- more fulfilled staff and better recruitment
- staff thinking less of their own position and more committed to the company’s goals
- an improved licence to operate from regulators and public opinion
- more loyal consumers
- investors see success and want to invest
Writing in Forbes, the leadership writer Caterina Bulgarella maintains that the opportunity for transformative change is far greater than simple linear growth. The true power of purpose-led business is not yet being harnessed by most companies.
There are, of course, dangers. Bulgarella refers to the gap between corporate statements and reality; the wider it is, the less authentic the company becomes and the less engaged its staff can be. But she also suggests that too many purpose statements are too woolly. They have lofty ideals but make it very difficult for customers and employees to pin down what progress towards the goal would actually look like. This too breeds lack of engagement since employees do not know what they should do.
So how do companies create and communicate brand purpose to help improve their reputation?
The first rule of purpose is to define it clearly. Bulgarella highlights different kinds of purpose statement and what they say about the evolutionary position of the companies which use them.
Your purpose can untap potential in your sector, such as Toyota, which works on the ‘future of mobility’. It can address a specific issue. This is a tactic used by clothing retailer Patagonia, which focuses on environmental activism. Or it can focus on the potential of your customers, like Nike, which seeks to ‘bring inspiration and innovation’ to all athletes (which, as they say, means anyone with a body).
Once defined, a purpose-led business must ensure its actions are in line with its claims.
Patagonia provides a clear example. It has a simple purpose: “For almost 40 years, Patagonia has supported grassroots activists working to find solutions to the environmental crisis.”
Now, the Patagonia CEO has decided to donate a $10 million tax cut to a campaign to fight climate change. This is consistent with its positioning. It is a piece of direct action to pursue the corporate purpose and makes a political point at the same time.
And it works. Patagonia’s activist stance seems to have a direct impact on its sales.
It is also vital that you weave purpose through the whole company.
You may have to rethink your staff training and your marketing plans to align with your purpose:
- staff consultation is vital to ensure your employees support your purpose and believe it is consistent with your core values
- decide which partners you will work with
- engage social influencers to join your mission
- all your communications activities play a vital role in establishing your reputation as a purpose-led business, but this must be backed up with actions
The opportunity is here – but don’t simply stamp purpose on your brand; it has to be lived.
If you’re looking to adopt a purpose-led approach to business and business communications, 360 integrated PR can help. We offer public relations consultancy and communications support to help companies form and execute a purpose-led communications strategy. Get in touch today for your free initial consultation.