Purpose-driven companies do better on nearly every traditional metric: greater customer loyalty, higher retention, more innovation, and a healthier bottom line. These days, customers, employees, and investors are no longer satisfied with companies providing good products, good prospects, or good profits—they want them to do some social good, too.
If you’re a business leader, it is imperative to cultivate purpose in your organization's culture, product, and brand. Employees must own it, customers and recruits must connect with it, and every corporate action and activity must reflect it. It is not just a buzzword anymore. Welcome to the purpose revolution!
In our new book, which we've titled The Purpose Revolution: How Leaders Create Engagement and Competitive Advantage in an Age of Social Good, my coauthor Jeff Vanderwielen and I describe this revolution as a shift from OR to AND. We can no longer afford to trade purpose for traditional values like good pay, quality products, and profitability. Now, employees, customers, and investors want and expect both.
Your Employees Want it
Employees want job security, good pay, AND a job that gives them a sense of purpose in a company they feel is creating social good in the world. Multiple studies show that purpose influences retention and recruitment across generations and geography. Winning companies that focus on purpose are able to attract and retain the best talent because employees now want to work for companies on the leading edge of social good.
Your Customers Crave it
Customers around the world want good products at a fair price, AND products that cause no harm, such as goods that are organic, cruelty-free, fairly traded, or made from recycled and reclaimed materials. These days, customers are excited by products and companies that promote social and environmental initiatives—just look the way B Corps are changing the way we do business.
Your Investors Demand it
Investors want a return on their investments AND they want to invest in companies that are agents of social good and promise social impact. (When the CEO of the world’s largest investment firm gets behind the idea of investing for social good, you know it’s starting to catch.)
Putting Purpose into Action
So, how can business leaders react to engage authentically with purpose?
They must start by learning how to define their own purpose, and then how to activate purpose in others and across the organization. Connecting employees to job purpose versus job function is the key to inspiration, engagement, and motivation. We wrote The Purpose Revolution to help leaders to understand what gives employees a deeper sense of purpose and meaning and how to apply that across their organization, to roll it out to customers, and ultimately drive the bottom line for investors.
At the same time leaders are responsible for embedding social values into the cultural fabric of their organization, they also need to transform their companies into powerhouses of social and environmental stewardship in ways that reach investors and customers. Efforts like these are a win-win-win.
For instance, when Paul Polman of Unilever took the helm, he refocused the business in a bold way around social and environmental values and created the Sustainable Living Plan, which solidifies Unilever’s pledge to “reduce our absolute environmental impact…and increase our positive social impact.”
Dolf van den Brink, CEO of Heineken Mexico challenged the company with the new purpose statement “To win big for a better Mexico,” and started a campaign against gender-based violence which affects 63% of women. It took courage, but he launched advertisements for Tecate, a traditional men’s brand, with strong and effective social messaging that said, If you’re a man who is abusive to women, you aren’t one of us—don’t buy our beer.”
Business has a unique role to play in meeting the challenges facing human society, whether around social justice, environmental sustainability, or a general loss of meaning and community. Often the organizations we work for take up the lion’s share of our time and energy, and most major companies do business in numerous countries and often on most continents. If we infuse our teams and our companies with purpose, focusing on creating a better world now and in the future, together we can help solve some of the greatest challenges of our time
This post is a guest post by Berrett-Koehler authors John Izzo and Jeff Vanderwielen. Check out their book The Purpose Revolution: How Leaders Create Engagement and Competitive Advantage in an Age of Social Good.