Tuesday, 06 September 2022

5 Reasons Why Now is the Time to Prioritize Purpose


5 Reasons Why Now is the Time to Prioritize Purpose

David Aaker 

Now is the time for every business to decide how serious it will get about addressing society’s challenges, including how much to commit in resources, budget and time. It’s not enough to blend in with other organizations with grants, volunteering, and energy goals. What is now needed is becoming a social program leader stands out to employees and other stakeholders as “making a difference” impactful, engendering pride and even being inspiring. A leadership role can be a game-changer.

My new book titled “The Future of Purpose-Driven Branding” argues that firms should make a commitment toward social program leadership with a concerted effort that includes branded signature programs. Sitting on the sidelines in the face of the problems affecting society is no longer a road to being relevant in the purpose-driven era.

These five forces support the elevation of societal efforts for a business.

The stakeholder paradigm is winning.

In the battle with the “role of business is to increase shareholder wealth” model, the good guys are winning. There are many indicators. One is the 2019 decision by the Business Round Table representing the CEOs of America’s leading companies to adopt a new purpose that explicitly states that firms need to deliver value to all of their stakeholders and have a commitment to protect the environment. That means that a serious headwind to those espousing an aggressive social effort is now a soft breeze. 

The seriousness and visibility of societal challenges.

There are enormous challenges facing society throughout the world, including climate change and inequality, that are increasingly visible and threatening. Many people, especially millennials and Gen Z, now believe that the threats are real and capable of dramatically affecting their quality of life. This shift has the ability to impact a firm’s long-term strategy and performance.

Businesses with resources, insights and agility to contribute.

Firms need to be part of the solution because they play a pivotal role. They have the resources and agility to contribute meaningful solutions and resources. And for some issues such as obesity and inequality, they have been part of the problem that they should be actively working to address. Governments with political gridlock, resource limitations, and an inability to be agile and experimental cannot do it all.

Employees and other stakeholders demand it.

In part, because of the three aforementioned forces, many employees, particularly the younger generations, are uncomfortable in organizations that are not committed to authentic efforts to address societal challenges. They may make decisions to join/stay or avoid/leave a firm based on an organization’s social purpose. Other stakeholders such as customers, suppliers and investors are also on board. To be relevant to many stakeholders, a social purpose and programs are needed.

Brands need the energy and image lift social programs provide.

A creditable set of branded signature social programs that address problems facing society have a unique ability to enhance a brand, to give it energy and an image lift, and to improve its connection with stakeholders. To get to such a level, the signature social programs need to stand out from the sea of sameness and represent distinctive societal leadership with authentic programs that have a “talked about” impact on societal challenges. The value of this business brand lift is particularly high when the business is bland or mature with few other ways to create interest.

Although there has been a lot of momentum in the past decades building toward a purpose-driven future involving efforts to attack societal problems, the response needs to be greater. Understanding and embracing these five drivers can help provide motivation to extend current efforts.