Purpose to your purpose
1 Nov 2022 by Steven Giannoulis
For a number of years we’ve worked with many clients helping them tell their story and express their purpose in order to engage their customers, investors, communities, staff and their wider stakeholders. We’ve seen a definite shift in the role of a stated purpose and type of things it covers. From being an internal call to action it’s become the expression of the social licence that multiple audiences look for before engaging with any organisation.
Forty (or so) years ago most organisations had a purpose statement which expressed their competitive ambitions. Statements like “To be No.1”, “To lead the market in sales of …” or “To be the biggest/best provider of…” These statements were primarily designed to inspire and mobilise the internal team to aim high and strive for more. This clear focus on commercial imperatives like growth, market share and profitability had its roots firmly in Milton Friedman theories of the 1970s. Friedman promoted that business had only one purpose: to maximise returns to shareholders. No doubt these types of statements also appealed to investors, reassuring them that the company was focused on growing their money.
In the later years of the 20th century, greater access and choice gave consumers increasing buying power and a lower tolerance for those who didn’t put the needs of their customer first. Retaining and growing customer loyalty became a business imperative and we saw this reflected in the language used in many a corporate purpose statement. Many organisation used their purpose to express their customer value proposition resulting is statements like “making life easier for our customers by...” or “being the provider of choice for ...”.
This shift from internal to external audiences often meant the purpose statement became about answering the question “why choose us over the competition?” Customer-led statements also sat more nicely with staff, giving more meaning to their work, and also with investors, who understood that looking after the customer meant looking after the bottom-line.
In the last decade, and in particular the last few years, we’ve seen the purpose of a purpose statement evolve again with further changes in the audience and the type of language used.
Customers began to gravitate to products and companies that had a higher purpose beyond their immediate consumption needs. We saw the rise of ideas like ethical, socially responsible, sustainable, eco-friendly and giving back to the community. And while initially this was a secondary differentiator, when core needs like product features and price were met, they‘ve slowly become primary decision-drivers for more and more people. Consumers want to do, and to be seen to be doing, the right thing and they want to deal with companies that align with that ethos.
Beyond customers, we’re now seeing similar expectations from staff. Work needs to have meaning, and make a difference to the wider world around them, and therefore they want to work with organisations who express a clear social purpose. Even investors are building purpose into their decision-making, avoiding perceived unethical or socially irresponsible sectors, despite the potential returns. The result is the rise of ethical investments, more transparent corporate reporting frameworks and the market placing value on today’s actions in driving tomorrow’s financial results.
A stated purpose now fundamentally captures an organisation’s social licence, expressing the difference they want to make in the world, and providing the reason for their audiences to want to be associated with them. We see purpose statement language like “ To drive New Zealand’s wellbeing..”, “To be guardians of …” and “To tread lightly as we…”.
With such a large role to play and so many audiences to satisfy, how does an organisation choose the purpose to hang their hat on? From our research, we see four main global mega trends that are driving social change, as well as consumer, employee and investor expectations and behaviours. A purpose that speaks to one, or more, of these trends will always find an audience:
- Sustainability/climate change – concern for the planet and more specifically for preserving a ‘clean green’ New Zealand through our rivers, forests and protecting our flora and fauna. Taking actions to reduce environmental impact. Leaving a legacy for future generations.
- National identity – A growing sense of nationalism/patriotism. Positively expressed in movements like ‘buy local’ and a growing focus on understanding local culture, heritage and identity. A greater sense of pride in local achievements, and celebrating and preserving the quality of local life. Taken further, this sense of patriotism is the backbone of movements like Brexit, Trumpism and the rise of nationalist governments worldwide.
- Tolerance, inclusiveness, and diversity – fostering a kinder and more caring world. Examples include a more welcoming approach to migrants, support of same-sex marriage, the championing of the rights of marginalised groups, less tolerance for bullying, crime and anti-social behaviour, and greater awareness of social injustice. New Zealand’s response to the Christchurch terrorist attacks is a positive example of this social trend.
- Life balance & wellbeing – looking after yourself; achieving greater work/life balance; living a better life – physically and emotionally; prioritising family, friends and relationships; and concern for mental and emotional wellbeing.
So if you’re a business trying to decide your greater purpose, which direction do you take? Start by defining your audiences and what will most resonate with them. More importantly, find a purpose that is authentic for your organisation, rather than considering which social trend has the most marketing mileage or will deliver the biggest ROI. Being authentic will help you deliver your purpose, and will ensure it genuinely resonates with your audiences.