Reigniting Commerce through Purpose
Businesses have long been encouraged to elevate the role of purpose in their organizations. But while it may have filtered through marketing messages and informed social impact initiatives, it has largely failed to reach its full potential. The inertia of business-as-usual has prevented purpose taking its rightful place as central to strategy.
There is nothing like a global pandemic to turn that business-as-usual on its head and provide an opportunity to rethink what we are doing and how we are doing it. This will be a critical driver of success and longevity in a world during and after COVID-19 as consumers and businesses shift priorities to purpose, shared humanity, and economic solidarity.
An organization with purpose at its core can leverage it as a platform on which to build its strategy and use it to reflect the importance of its existence in a changing world. In the midst of a pandemic that brings into question the nature of what is truly essential, businesses with a foundation of purpose will have the upper hand in articulating why they exist, what problems they solve, and whom they want to be.
A recent study showed that purpose-orientated companies report 30 percent higher levels of innovation and 40 percent greater employee retention rates. Unilever’s sustainable living brands accounted for 75 percent of the company’s growth and grew 69 percent faster than other brands. It is clear that purpose-led companies outperform.
A contributing factor to the superior performance of purpose-led organizations is that moving purpose from the periphery of strategy to the center requires the alignment of all actions and activities behind creating value for all stakeholders, not just shareholders.
The outdoor clothing brand Patagonia is renowned for “causing no unnecessary harm and using business to inspire and implement solutions to the environmental crisis” throughout every aspect of its business, from supplier compliance requirements to recruitment criteria and store design. This alignment creates differentiation through a set of activities that follow a logic beyond profit. Taking bold actions like these will be more important than ever as consumers increasingly expect brands to play an active role in remaking a better world.
Aligning behind your purpose: discover, redefine, and refine
Purpose goes beyond corporate social responsibility. To be purpose-led in a sustainable and believable way, a brand must express the impact that purpose has for all stakeholders: its people, customers and communities.
Smollan Path to Purpose
Purpose should resonate with the brand, creating virtuous cycles that reinforce the activities of the business. Tesla’s “why” is the “acceleration of sustainable energy and autonomy”. The Body Shop focuses on “Cruelty-Free Beauty” and a commitment to “Enrich Not Exploit”. These brands’ purposes echo through their business models and all of their activities in a coherent way.
In a world in which there is no business as usual, we have an opportunity to pause, reflect, and reshape the parts of our businesses that have lagged in aligning their activities behind their purposes. This may require some reframing of relationships, operations and capabilities.
If you open the aperture on what your business and brand can do, it will never return to its original state and will find growth in new, unexpected ecosystems. Examples today include everything from distillers using their alcohol to create hand sanitizer to car companies using their engineering capabilities to build ventilators.
Be authentic and clear
Stimulating commerce after the COVID-19 pandemic will be highly dependent on the government’s and businesses’ abilities to make consumers feel safe — physically, psychologically, and financially — with trust as the currency that will make it happen.
Businesses with an authentic, lived purpose will be the most successful in fostering trust by presenting a consistent, human face to the world. In this regard, the best barometers and amplifiers of purpose-led businesses are the people inside them.
Consumers are adept at detecting insincerity and inconsistencies in what businesses say and do. On the other hand, they reward authenticity, strong leadership, and outspokenness. Being purpose-led requires trade-offs that prioritize integrity and make profit an outcome rather than a goal.
People are actively searching for inspiration, reassurance and connection. Grounded, audience-centric communication is key to establishing an emotional connection with customers by acknowledging the context and giving people hope for the future. Brands that help people feel like they are part of something that matters will gain continued loyalty and relevance in the lives of their stakeholders.
Look for new and creative ways to communicate and involve stakeholders. Customers and employees are emerging as key brand ecosystem players, most visibly in the co-development of products and experiences.
Lego launched an online community that encourages members to submit new product ideas, while in South Africa, numerous brands have responded to COVID-19 with purpose-led initiatives, such as Vodacom offering free data for educational platforms and DStv opening up its channel library, especially for kids. Each is capturing and expressing the uniqueness found at the intersection point of brand purpose and identity.
The future feels uncertain for everyone, and we know that the new normal will not be a return to the past status quo. However, the post-COVID19 world may be a better place, with individuals, businesses, and governments recognizing the importance and value of collaboration, connection, simplicity, and purpose.
If purpose-led businesses pre-COVID-19 were growing on average three times faster than their competitors, it is safe to say that in a world with a renewed emphasis on collective meaning, brands that place purpose at the center of their strategies will see even greater returns.