The Purpose Arms Race: Who will sink or swim?
(First published in Ambition Magazine for the Association of MBAs)
A new arms race beckons. Corporate purpose is far from new but the need for urgency and distinctiveness is. If companies wish to make tangible and transformational changes and gain real competitive advantage, the time for action is now.
It is only when purpose becomes a central driver of business with an innovative and strategic framework to propel real, impactful change, can such an advantage prevail. Businesses become more trail-blazing, retain the best talent, are more collaborative, agile, and become more distinctive in their field.
Ryan Bromley, Partner at Good Innovation, says, ‘The businesses that commit to bringing their purpose to life will always triumph over their competitors in the long term. Profit is not the enemy of purpose; these two considerations can co-exist for maximum growth.
‘After months of uncertainty in a global pandemic, there is no better time to re-examine ideas about how businesses operate to deliver genuine change for some of the biggest social problems. There is clear competition to do this well; this is a “Purpose Arms Race.”
If businesses hope these ideas will fade with the pandemic or that purpose within their organisation can just exist as simple platitudes or marketing speak, they will undoubtedly stagnate. Their purpose mission will fail. At best there will be limited growth, but in all likelihood there will be a loss of market share and an acknowledgement they have been left behind.
So, who will be the ‘Purpose Arms Race’ winners and how can your organisation triumph?
Action vs tokenism
Consumers, employees, investors, and other stakeholders are connecting with brands who are driven with a united purpose from the top, where this motivation is at the cornerstone of their strategy. The idea that consumers’ expectations that brands will align with their values should not be underestimated. The heroes in this race will be the leaders and companies who champion action over tokenism.
But why now? The pandemic has compelled consumers to make more purposeful choices and they are applying a post-pandemic mindset to their decisions. One recent Accenture survey of 25,000 consumers found that 50 per cent said the pandemic has compelled them to re-evaluate their purpose and value as consumers. This is having a direct impact on what, why, and how they buy.
Baiju Shah, Chief Strategy Officer at Accenture Interactive. ‘Brands must re-evaluate and rebuild relevance to these new buyer values, and anticipate and meet the needs of their consumers in the moment. Leaders must make a critical choice to either tune in and create experiences that matter or tune out and miss the opportunity to differentiate and create sustained growth.’
Impact vs words
Words do not engage employees or make customers more loyal. If there is a disconnect between words and impact, the negative connotations can be incredibly damaging. Companies need to take a demonstrable and impactful stand on issues including sustainability, transparency, and equality or pay the price of a decreasing market share.
This is not an external marketing exercise but has to be driven by an internal strategy with subsequent ideas, innovation and most importantly, decisions and action. Organisations have to turn a cacophony into a symphony with the conductor ensuring the final performance lives up to its promotion.
Malin Berge, VP Strategic Growth at Mastercard, with a focus on sustainability, issues a warning to companies that focus on words over impact: ‘I think there will be two types of companies in the future. The ones who had a meaningful role in the transition towards low carbon economies, and those that don't exist anymore.’
Creativity vs Unoriginality
As companies strive for differentiation, companies who embrace innovation as they define their brand purpose will be the ones that earn loyalty from consumers and stakeholders. Companies that show their humanity, forge emotional connections, harness storytelling, and look through an original lens, will rise to the top in this battle to succeed.
This is not about quick wins but taking a longer-term and more organic approach. It’s not about a one-off charitable donation, but a transformative partnership or initiative that feeds into an organisational vision.
Bestselling author and TED speaker Simon Senek sums this up, ‘People don’t buy what you do. They buy why you do it.’ And if you’re doing it for the wrong reasons, it will be glaringly obvious to all.
We have witnessed a global health crisis and upheaval like nothing before in history. Will Stone, Head of Whilst some companies hope that the need for purposeful change will fade with the pandemic, others have jumped on the opportunity to gain a return on their purpose.
Bromley adds, ‘We live in an empowered and transparent age where we can access all sorts of information and consumers, employees and investors are actively engaging with companies who are using their power for wider social impact. They will treat every interaction as a promise of support for the brand and what they stand for.’
For all businesses, in whatever sector, the extent to which they create action for social impact will be the difference between success or failure. The winners in this arms race exist above and beyond making a profit but will enjoy a distinct and multifaceted return on the impact that they make. The world is embracing radical change and the power of purpose has never been more critical and influential.