Why should businesses be purpose-driven?
In recent years organisations have been striving to become purpose-driven. They’ve come to realise that demonstrating the ‘why’ behind what they do matters. This means considering the needs of wider society alongside financial performance.
An organisation’s purpose should be embedded at the heart of their business strategy, providing a guiding principle for growth. As part of this, businesses should be talking about how they are making a positive impact. But more importantly, they should ensure they have tangible examples that prove they are delivering on their promises.
Pivoting during the pandemic
Covid-19 has elevated the importance of purpose for organisations by facilitating a shift towards purpose-driven thinking. This has been prompted by the pandemic establishing common ground amongst consumers globally, leading to a distinct move away from ‘me’ thinking to ‘we’.
Businesses have led by example, demonstrating that they can go above and beyond to care for and support their communities. They have shown their ability to pivot when motivated by a genuine goal of making a positive impact and are demonstrating the value they can create.
It’s likely Covid-19 will continue to accelerate the pace at which businesses are focusing on their purpose.
A key challenge for organisations is communicating authentically, and ensuring what they stand for resonates with consumers who want to feel a sense of shared purpose.
A global study by Zeno surveyed over 8,000 consumers across eight markets, including the UK, to better understand why purpose can lead to competitive adantage. The results clearly indicate the power of purpose for businesses:
- Across all generations 90% of consumers agreed that they would be more likely to support an organisation if it “ truly lives by a clear and strong brand purpose”
- Consumers are four times more likely to make a purchase if they perceive the organisation to have a strong purpose, and four and a half times more likely to become brand advocates
- 82% of consumers said they took action to support an organisation when they believed in its purpose
- Consumers are four times more likely to trust an organisation if they are perceived to have a strong purpose
Research by Global Web Index tells a similar story. They surveyed 8,000 internet users across seven countries, including the UK:
- 41% of respondents said they want businesses to focus more on social causes and the wellbeing of their employees
- 51% said they want businesses to focus more on being eco-friendly
- 39% said that when making their purchasing decisions, what would concern them most would be if a business had a poor environmental record
Consumers expect organisations to make a positive impact, and this is influencing who they choose to do business with. They are piling on the pressure as they hold businesses to account to ensure they are delivering on the promises they make.
What’s key to remember is that an organisation’s purpose will only be relevant as long as it is aligned with what consumers care about.
Conveying purpose is just as important internally as it is externally for an organisation. Employees are increasingly expecting more from the companies they work for.
Organisations should look to develop a compelling purpose that sits at the center of all decision-making and informs ways of working across the business.
Global Web Index’s survey of 8,000 internet users aged 16-64 identified their top priorities for an employer:
- 50% considered support for employees’ mental wellbeing to be a top priority
- 42% said being environmentally friendly is a top priority
- 33% said being socially responsible is a top priority
- 35% want employers to support diversity and inclusion in the workplace
- 34% think employers should provide remote/ flexible working
- 29% said employers should contribute to the local community
People want to work for purposeful businesses. Ensuring your organisation communicates and delivers on its purpose will not only enhance employee satisfaction but will also help to attract future employees.
Don’t risk being left behind
It’s clear that post-Covid-19 there will be more organisations making the pivot and focusing on conveying their purpose. Businesses are likely to play a much greater role as a force for good in people’s lives moving forward.
This pursuit for purpose should be driven by key decision-makers within the business. The study by Zeno found that 77% of UK respondents believe that the CEO, Founder or Owner of a business is either “extremely responsible” or “very responsible” as the driving force behind an organisation’s purpose.
So it’s no longer a question of ‘why’ but about ‘how’ businesses embed purpose into their strategy. Organisations need to have a clear understanding of what they stand for and how they will create long term value. Businesses that don’t choose to act now risk being left behind, inaction is not an option.