Corporate purpose revisited
3 actions for meaningful change
The Marmite effect is real for corporate purpose – but love it or hate it, it’s hard to ignore against today’s business backdrop and the demands from a rapidly shifting market.
We asked a panel of industry leaders the below questions at an event we co-hosted with tml Partners last summer:
Does anyone really understand the purpose of corporate purpose? Or has Simon Sinek’s assertion that you can buy one for $15,000 created a superficial concept that adds complexity and confusion but no real value?
We initially wanted to explore the topic of purpose given the focus of our businesses: for the 18 months preceding the event, Clear was in the thick of helping clients manage the chaos of monumental change through brand vision and strategy, and tml was doing the same for clients looking for strong executive leadership to buoy and boost their pandemic-ravaged businesses.
The world and the conversation around corporate purpose have both moved on since then. As we move further into a year that has already been marked by seismic change, we wanted to revisit this divisive topic and reflect on what its evolution means for our clients.
How has the conversation evolved?
One enduring issue that has plagued the purpose conversation is differing interpretations – including the role it should play and what success looks like.
2021 closed with author and effectiveness expert Peter Field positing that “there can be considerable benefits for companies in deploying brand purpose* campaigns — both for engaging their own employees, stakeholders and investors as well as for driving customer sales. When it is done well, when it is genuine and credible, brand purpose can be very powerful.”
This was based on Field’s recent study: a comparison of 47 brand purpose cases with 333 non-purpose cases from the IPA Effectiveness Awards Databank, where “strong” purpose cases notably outperformed non-purpose cases.
The problem? The average purpose campaign’s results were so much less likely to generate business results that they undermined the findings in favor of brand purpose – and sparked fierce debate about the nature and efficacy of brand purpose across the marketing community in the UK and beyond.
The conversation continued into 2022, with investment analyst Terry Smith blaming Unilever’s “purposeful brands” strategy for lackluster financial performance.
For other leading industry figures like Mark Ritson, the answer was somewhere in between: “It will prove successful for some, and not for others. And success may not mean profit or effectiveness. It might be bigger than that.”
Our view on purpose
It all comes back to this fundamental question: What is the purpose of purpose?
Purpose is the reason for which something is created or exists – so, by definition, purpose should give an organization clarity and focus.
From our respective positions as a strategy consultancy and a team of executive recruiters, we’re firmly aligned with the view that purpose should be a strategic choice for organizations rather than being viewed as a “marketing prerequisite.”
Every organization is at a different stage in their lifecycle and journey. One could perhaps argue that all organizations should start with purpose, which presupposes that all organizations begin from the same starting point.
The reality, of course, is that they don’t. Businesses and brands are created for all kinds of reasons. But the one thing all of them have in common is their desired outcome: growth.
We believe that there is significant value purpose can unlock – if and only if it’s created, delivered, and managed in the right way. It needs to be your company’s way of being, doing, and evolving in a modern context, and it needs to make a difference to the people who are counting on you (from your customers to your stakeholders). This involves putting purpose at the center of your business strategy. As Jay Jakub, Senior Client Advisor and Chief Advocacy Officer at the Economics of Mutuality, noted during our panel event:
“When you put purpose at the center, it’s a radical change of thinking – it’s almost akin to Nicolaus Copernicus who realized that if you put the sun at the center of the universe, rather than the Earth, then suddenly all the mathematics make sense. In business, when you put the purpose at the center, you’ve suddenly got the right lens.”
From a recruitment perspective, purpose remains a hot topic and a critical tool in engaging – and retaining – talent. The focus is shifting: social growth is becoming as important as economic profit, and the businesses with thriving talent strategies are being honest with their potential employees about where their North Star is and how their journey is progressing. We know that the last two years have been a powerful time of reflection and reevaluation for individuals about their roles, who they work for, and what they want to achieve. People want to work for organizations they feel good about promoting and feel aligned with beyond policies and intentions. It’s not the sole factor, but the new generation of leaders are demanding to see purpose fundamentally ingrained in a company’s day-to-day offering and culture.
However, there’s a catch: as potentially powerful as it is, this is not a strategic tool that treats bandwagoners kindly. If you go after it for the wrong reasons, it’s all too easy for empty words to be revealed for what they are and for reputational damage to swiftly follow.
Corporate purpose has to be about driving value beyond profit – whether this relates to the internal (like engaging your employees) or the external (the way you go to market).
The 3 steps you should take from now
It’s a lot to take in and consider – so we’ve laid out 3 key steps to help frame your own approach to corporate purpose.
Situational analysis is key. Go back to the 5 C’s: what do your company, customers, competitors, collaborators, and climate look like? What are your employees asking for, and what are your stakeholders asking for? Map out what your strategic values and challenges are as an organization – and see where they align.
You could spend your time and money on corporate purpose; whether your organization should do this is another question altogether. Identify what purpose could add to your business, and whether you think it’s the right tool for you. In a market where many businesses are reeling from the pandemic and The Great Resignation, it’s time to take an honest look at your resources and see if you have both the capacity and the business need to pursue purpose methodically and authentically from the inside out.
Your purpose needs to be realistic, genuine, and lasting. If the above steps have revealed that it’s the right choice for your business and you’ve decided to invest in it, now you need to determine how you’re going to activate and ultimately deliver against it.
- What steps will you need to take in order for your purpose to be actionable at a business unit level – and how will those steps work in harmony?
- How will you communicate your purpose? Will you communicate it externally – or as Louise Shield, Director of Corporate Communications at Santander UK put it, will it be “a guiding light in every meeting and behind every decision, not a slogan”?
You need to make sure that you’re creating and executing against a well-developed plan that will fundamentally drive value for your organization. Done right, that value will become clear in multiple areas across your business, from talent retention to shareholder engagement to your organization’s impact on your wider community.
Ultimately, wherever you stand on purpose and its place in your business, it’s crucial to go through a strategic journey of asking the right questions, approaching the answers with a critical eye, and mapping out a delivery plan.
This will not only ensure that you’re approaching this important move for the right organizational reasons with realistic measures of success, but also that you’re approaching it from the right starting point for meaningful change within and outside your business.
*“A commitment articulated by a commercial brand or its parent company to goals other than improved profits or products, involving contribution towards one or more positive social impacts in the fields of health, the environment, human development, sustainable business practices, or other similar areas.” – Peter Field