Many executives may roll their eyes at the notion of purposeful business. Purpose sounds like something fluffy for the marketing department; something that hardened CEOs can't afford to worry about when making real business decisions. Alarming new research by EY confirms that this is the attitude of many South African businesses, which have cut back drastically on broader stakeholder values in the past year.
This short-termism is worrying. Purpose builds powerful businesses and brands. Purposeful companies outperform the market by a large margin. They are doing something that people care about; and that motivates consumers to buy their products and services, and inspires employees to be more productive. Purpose is especially relevant in Africa, where customers and employees have broader needs to be met, and greater loyalty to offer as a reward, than in developed economies.
So how can an organisation align itself behind a powerful purpose that grows business? When building a purpose platform, it is essential that you find something that is relevant to both your context and your business.
Relevant to your context
A powerful purpose helps meet a real societal need. It is deeply embedded in society and helps to make life easier for members of that society. A purpose platform should be based on the desire to impact a community in a way that will really matter to them, rather than trying to slap the latest cause or trendy buzzword onto your marketing.
Think about what challenges your customers and employees face in their daily lives. Do they struggle with trying to educate their children? Are they supporting unemployed relatives? Think beyond your category and get a holistic picture of their context and frustrations.
Think about what societal issues negatively impact your business. It would be in your own interest to help with education if you are struggling for talent, or to help alleviate some of the causes of crime if your employees or supply chains are falling victim to crime.
Relevant to your business
If you focus your energy on trying to solve societal issues that do not relate to your core business, the chances are high that your interventions will be arbitrary and short-lived. If they do not add to value to your business, it becomes difficult to maintain the investment.
Leading organisations build purpose platforms that tap into their key strengths and employee passions. What is your business really good at? And what do your employees care about?
A simple and effective way to get this right is to start with your brand promise. What need is your brand really answering? And how could that need be answered in a more holistic way?
Take Nike, for example. They were once an apparel brand. They made footwear and sports clothing, but they understood that the real need they met was to help people stay motivated and active. This insight enabled them to launch relevant product, service and app innovations, such as the Nike Fuel Band and the Nike + training apps. To transform this innovation platform into a purpose platform would require that they take the same thinking and apply it to a wider audience. How could they, for example, help people in poor communities stay motivated and active?
What makes it purposeful?
Delivering products and services that leverage key organisational strengths and are relevant and add value to target markets sounds like old-fashioned marketing, done well. What sets a purpose platform apart from ordinary business?
- Purpose is meaningful. Purpose is the reason your business does what it does - and that 'why' should energise your employees to perform.
- It is long term. It will outlast any product or service, and it may not generate short-term, immediate sales spikes (though it will build your business in the longer term).
- It meets a broader set of needs than those typically associated with your category. Purposeful businesses make the world better off.
- Consumers and shareholders are not the only target audiences. The activities and beliefs of purposeful organisations include all kinds of stakeholders.
- Purpose is authentic. It is not marketing campaign; it is a new way of doing business. It needs to influence how your organisation behaves at every touchpoint, and be built into performance measurements and metrics.
Building a purposeful brand may seem like hard work, but it is worth it in the end. Building a purpose platform can transform your category from an undifferentiated sea of commodities to one in which customers, employees and society care about your business's wellbeing. It's better than differentiation; it is true, meaningful distinctiveness. And that's an asset that will make even the most cynical CEO sit up and take notice.
