At Cause Consulting, we define a purpose-driven brand as an organization that is guided by a deeper reason for existing, beyond profitability. This reason for existing, at its core, is driven by a desire to positively impact society. By no means are purpose-driven brands perfect. Rather they are brands that have identified a North Star that guides their work and adds value to society.
There has been much discussion around purpose as it relates to business strategy over the past few years. During his 2009 TED Talk, Simon Sinek famously stated: “People don’t buy what you do; they buy why you do it.” And the Conscious Company and B Corp movements continue to gain momentum. Yet, the concept of brand purpose can actually be traced as far back as the 17th century when it was required that corporations contribute to the “public good” through specific projects and initiatives.
Even after the U.S. government removed the “public good” requirement needed for incorporation, our most historic business leaders carried on the concept. Co-Founder David Packard, in a 1960 speech given to Hewlett-Packard’s training group, stated the following on the concept:
“Purpose (which should last at least 100 years) should not be confused with specific goals or business strategies (which should change many times in 100 years). Whereas you might achieve a goal or complete a strategy, you cannot fulfill a purpose; it’s like a guiding star on the horizon—forever pursued but never reached. Yet although purpose itself does not change, it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress.”
The conversation around purpose-driven brands is now reaching a head. Companies are using their products and services as a medium to communicate their purpose.
Three key trends enable purposeful brands to succeed in gaining consumers’ share of heart, mind and wallet. First, the general public is becoming increasingly aware of, and engaged in, the social and environmental issues our country, and the world, is facing. The desire to rally behind critical issues will only continue, as we become more and more connected with each other and the current challenges facing local and global communities.
Secondly, as a result of this heightened level of awareness and engagement, consumers are using their purchasing decisions to reflect their values and the issues that they would like to make an impact on. In this process, they are demanding transparency and accountability from all brands, regardless of where they are on the “responsibility” continuum.
Lastly, a large portion of consumers, especially Millennials, are seeking purpose and fulfillment in their own lives and work. They are asking themselves tough questions about their future and the impact they would like to have on society.
The companies that have responded to these trends have gained recognition in the marketplace. CVS made headlines when it decided to stop selling tobacco in its stores and invest in programs that support consumers on their journey toward better health. On a smaller scale, brands such as Greyston Bakery — with its credo “we don’t hire people to bake brownies, we bake brownies to hire people” — are being recognized for the investments they make in their employees and communities. Regardless of whether the organization is a Fortune 500 company, social enterprise or B Corp, the brands that are receiving the most attention from consumers are those that authentically invest in a better world.
On perhaps the largest scale, Unilever made bold commitments to make “sustainable living commonplace” through its Sustainable Living Plan and its goal to double the size of the business while cutting its environmental footprint in half. According to the company’s Sustainable Living Plan annual progress report, about half of Unilever’s growth in 2015 came from its sustainable living brands, which grew 30 percent faster than the rest of the company’s business.
Is there a business case for companies to pursue purpose? We know that when a brand satisfies the wants and needs of consumers, there will be economic benefits that are realized for the company.
However, we also know that consumers are increasingly evaluating the societal impact of their purchasing decisions. What we are seeing is that the brands that authentically pursue their expressed purpose will be the ones that experience economic gains over the long-term. Brands that decide to position themselves as purpose-driven purely for the immediate potential business benefits won’t experience sustained results.
Looking ahead, the role of purpose-driven brands in the marketplace will only continue to rise. Currently, purposeful brands are seen as exceptions rather than the norm. However, in order for brands to thrive in the future, purpose will become required as a result of increasing pressures from employees, consumers, investors, competitors, governments and communities.
Stakeholders will not only be interested in an individual brand’s vision for a better world, they will be evaluating brands on the results their social impact programs and initiatives are having on the most critical issues within our society.
Click here for the original version published in Triple Pundit.
Image Credit: Flickr/Chris Blakely
Greg Doyle is an Associate at Cause Consulting, a strategy and communications firm that enables companies to simultaneously strengthen business + impact society.