Research conducted by the GOOD Agency and YouGov reveals that two in three marketers view purpose as the main way through which to recover from the current crisis. But only a quarter plan to commit more resource to it this year.
This ‘tipping point’ is being driven by consumer demand, accelerated by the crisis, and ranks as the number one factor influencing marketing decision-making relating to purpose. However, the same research also reveals a ‘lack of resource’ and ‘other priorities’ as the main reason why businesses are failing to deliver any actions of substance to truly demonstrate their commitment.
The consequence? Brands are left exposed in an era where consumers and employees are increasingly critical and unforgiving. So, what can marketers do to convince their board that purpose deserves a seat at the table?
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A business’s role is to create value, but shareholder primacy has grossly distorted this. It was – and still is – treated by many business leaders as justification to pursue profit, regardless of who or what is impacted. This creates an imbalance in the ecosystem that a business needs in order to create value; that of a healthy society and sustainable environment. The consequences are devastating. Shareholder primacy has also corrupted the moral integrity a business needs to build trust.
The irony is that the principle of shareholder primacy is now the cause of the greatest damage and risk to shareholder value ever experienced. And while it remains true that a business’s role is to create value, all businesses are now being asked two questions: how are you creating value, and who are you creating value for?
Purpose is business-critical
The answer to these questions is at the heart of a business’s purpose and requires business leaders to look beyond short-term profit to the creation of greater value.
The rapid growth in purpose is a human-driven phenomenon and it is creating business-critical challenges. Attracting and retaining the best talent. Becoming the ‘brand of choice’ in the face of increased consumer discernment. The need to reflect the values of the people investors are acting on behalf of. Securing social licence to operate from the very communities the business depends on.
Businesses that demonstrate a commitment to purpose have the power to address those challenges head-on by having a positive impact on society and the environment it depends on to thrive.
Purpose is not corporate social responsibility (CSR). That is now expected of every business. CSR defends value rather than creates value. Neither is purpose a short-term, cause-led marketing campaign or a more purposeful brand positioning. None of these on their own will create value beyond a launch. In fact, there is a strong possibility they will devalue the brand or business.
How to create value through purpose
So, what role do marketers have in generating the longer-term value that purpose creates? Increasingly, marketing departments are expected to not only define