A purpose-driven company. For years, a company’s purpose meant increasing shareholder value, displacing competitors, increasing margins, and improving the bottom line. Ironically, a singular focus on those data points will ultimately lead to their decline.
New York-based Zeno Group recently commissioned The “Strength of Purpose” study of 8,000 global consumers and 75 companies. They surveyed more than 8,000 individuals across eight markets (United States, Canada, United Kingdom, France, China, India, Singapore, Malaysia), having them rate more than 75 brands on their perceived strength of purpose.
The findings were dramatic, although not surprising if you’ve been keeping tabs on the rising Gen Z and Millennial generations.
Zeno says that the study reveals that when consumers think a brand has a strong purpose, they are:
- Four times more likely to purchase from the company
- Six times more likely to protect the company in the event of a misstep or public criticism
- Four and a half times more likely to champion the company and recommend it to friends and family, and a little more than
- Four times more likely to trust the company.
But what is a purpose-driven company? According to Salesforce.org, a “purpose-driven company stands for and takes action on something bigger than its products and services.”
Okay, sure, some may think: We can add a Black Lives Matter page to our website or do a cause-related marketing campaign a couple of times a year. And, of course, our logo looks great in rainbow colors every June for Gay Pride month.
Nice try, but approaches like that will still send all your KPIs plummeting. The reason? Consumers, especially the newer generations, can smell insincerity a football field away.
Unless people of color sit on your senior management team and board of directors, a Black Lives Matter graphic will look like the empty gesture it is. Same with your rainbow-colored logo.
It’s not just your organization that will live under the scrutiny of consumers; it’s also the company you keep. Giving to politicians who deny climate change or having vendors in your supply chain who are heavy polluters will nullify any assertions you make about your commitment to sustainability and the environment.
Key Attributes of Purpose-Driven Companies
The Zeno Group study identified eight key attributes of a purpose-driven company:
- Fair treatment of all employees
- Products or services that reflect the needs of people today
- Ethical and sustainable business practices
- Support for important social causes
- Creation of new job opportunities
- Diverse and inclusive culture
- Issue advocacy, and a
- Strong set of values
As you might guess, I will add one more: authenticity. Your company’s purpose absolutely, positively, must come from a place of authenticity. Our methodology has always guided our clients to think beyond the delivery of goods and services and think about their broader purpose, their why. All of those criteria the Zeno Group study identified have to be part of your organization’s DNA.
Now, that might be a very tough pill to swallow for disciples of the late economist Milton Friedman and winner of a Nobel Prize in Economics. He preached that “The business of business is business.” But that’s just the thing, without a purpose, there eventually will not be a business.
Why Authenticity is Key
Consider these statistics that Peter Fisk put together for a post to his blog, GeniusWorks.
- Cone/Porter Novelli found 66% of people would switch to a purpose-driven brand (91% of millennials). Also, 78 % of consumers would tell others to buy, and 73% would defend them
- Accenture found 53% of people disappointed with a brand’s words or actions on a social issue complain about it, with 47% walking away in frustration, 17% of whom would not come back, and the
- Wall Street Journal found that “Almost 60% of Americans said last year that they would “choose, switch, avoid or boycott a brand based on its stand on societal issues,” compared to 47% in 2017.
Not Just for B2C
And least someone tells you, “Oh, well, we’re a B2B company. That only applies to B2C companies,” you can reply with a hardy, “Au contraire!”
Here’s why: Upwards of 62% of Millennial workers—in any sector—will change jobs and take a pay cut to work at a company that aligns with their values. (Millennials, by the way, will make up 75% of the workforce in just four years.) If they’re willing to do that with their own money, they will have no problem doing that with the money they spend on behalf of someone else.
A purpose-driven company revolution awaits and the clock is ticking. If your company is not purpose-driven now, it’s time to get to work.