Now, I’m not one for spending huge amounts of time researching products before making a purchase; however, last week, I found myself looking around to find a new washing machine (exciting, I know!).
After a while, what became clear was that I was making a conscious decision to spend a little more in order to make a purchase that was as carbon neutral/environmentally sustainable as possible and from a business that wanted to ‘do the right thing’ by its employees – brand name and cost were no longer driving my decision.
It got me thinking… I joined MAD-HR because of their strong purpose-driven approach to HR and commitment to ‘making a difference’. They stood them out from other companies I was interviewing with, and their strong sense of purpose meant more to me than compensation and benefits alone.
Research shows that I’m not alone in changing what drives my decisions. So what’s happened?
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It would appear that in the early 1990s, people first began questioning brands’ motives – we saw family favourites like McDonald’s suddenly under fire and labelled as unhealthy, and Nike’s business practices in sweatshops called into question.
By the early 2000s, the internet was giving us far greater transparency and social media was starting to change how we engaged with brands.
Fast forward through a financial crisis, and in 2010 Paul Polman, Chief Executive Officer of Unilever, openly criticised the City of London’s short-term focus on ‘shareholder value’ before launching the Sustainable Living Plan. Polman’s aim was to double sales, halve the multinational’s environmental footprint, source all materials sustainably, and increase its positive social impact.
From there, we saw the UK Government hold an open consultation on mission-led businesses (July 2016) and Tesco launch its first campaign showing their commitment to tackling food waste (March 2017).
Momentum has continued to grow from there, and it is clear that having a defined ‘Purpose beyond profit’ has become ever more important to individuals in their decision-making processes. And it doesn’t stop at which product or service to buy but is also impacting who we are choosing to work for and with. Research demonstrates this, and a recent report by Deloitte has found that many consumers today make decisions based on how brands treat their people, how they treat the environment, and how they support the communities in which they operate.
When companies align their purpose with doing good, they can build deeper connections with their stakeholders and, in turn, amplify the company’s relevance in their stakeholders’ lives’ and that ‘younger generations also want to work at companies with an authentic purpose, with more than 70 per cent of millennials expecting their employers to focus on societal or mission-driven problems’ (You can read the report here).
It’s no wonder companies focusing on purpose outperform their competitors and that many organisations are now incorporating purpose into their business strategy. They understand that ‘Purpose’ is a core differentiator and that purpose-oriented companies have higher productivity and growth rates, a more satisfied workforce and lower employee turnover.
And now, more than ever, employees and customers are prepared to call you out on your personal views and question your business ethics, environmental impact and the mark you leave on humanity. There are many companies out there that recognise that doing the right thing is the right thing to do, and they are reaping the rewards.
That all sounds logical, right? So, as a business, how do you get to the heart of your ‘why’, make it succinct enough for people to easily understand and communicate it widely enough that it has an impact?
Well, at this point I need to offer a word of warning…
Don’t think you can just ‘Google’ ‘company purpose statement’ and do a quick copy-and-paste job. Your purpose needs to be just that, YOURS! It needs to be genuine, heartfelt and authentic. Anything else and you risk being ‘found out’ and being exposed to negative PR might be the least of your problems; employees are also going to quickly pick up a disconnect between what you say and what you do and will swiftly exercise those same values that you want to harness to look elsewhere!
According to YouGov, operating with an authentic sense of purpose attracts consumers and retains Gen Z employees, as brands achieve a “double bottom line” of both financial and social impacts. According to the report, 65% of Gen Z will spend 48% more on an average for products from a purpose-driven business. Further, 49% of Gen Z will work for a purpose-driven company for a 20% lower salary on average and when asked about the importance of corporations being aggressive and visible in addressing important challengers, 39% say it’s “very important”, followed by “extremely important” (24%).
So, the first step is to understand YOUR purpose and establish a purpose statement that defines the reason YOUR company exists—beyond simply making a profit, your purpose statement should illustrate how your product or service positively impacts the people you serve.
Here are some pointers to consider: define what you do; consider what your company does that solves a particular problem for, or positively impacts, your customers; think about your passion and why the business was started in the first place; ensure this is aligned to your values; keep it succinct and easy for people to relate to and once you have an idea on the above, gather feedback from stakeholders to assess the impact (if necessary, rinse and repeat).
Once your purpose is established, you’ll need a series of goals to drive that purpose, ensuring both your employees and your customers understand ‘what you are about’ i.e. you need to move from the ‘why’ to the ‘how’.
Now that’s one for another day, but if you would like some help in the meantime, are interested in an independent review of your organisation and find out how you can supercharge your HR activity to maximise its impact on your bottom line or indeed would like to discuss any of the above, then please do get in touch.