Building purpose into the core of a business leads to increased sales and success, Andy Lothian, Group CEO of Insights told us on the Mind Your P’s podcast last week. However, it is often misunderstood as a ‘nice-to-have’ rather than a core business strategy.
The difference between having purpose as a ‘tick box’ exercise in your marketing or CSR strategy and really living your purpose separates your business from the crowd, and others notice it too. According to CGS survey findings, the second highest reason consumers return to a brand, after product quality, is its sustainable or ethical business practices.
Whilst some people argue that this is no new-discovery, the business sector has been slow on the uptake to integrate purpose into their strategy in a meaningful way.
Trends show that an increasing number of people believe it’s businesses’ responsibility to find solutions to social issues, but, disappointingly, a much smaller proportion of senior business leaders think the same way.
We’ve witnessed first-hand how doing good for the community can benefit organisations. But you don’t have to take our word for it: becoming purposeful leads to higher financial performance in both the short and longer term.
We’ve outlined some of the ways that living your purpose can bring real business benefits. From profits to public opinion, here’s just a few of the ways leading with purpose can get you more bang for your buck.
More and more, people are looking to shop and do business with brands who stand for something more than just profits. Customers are on average 5x more likely to buy from a purpose-driven business compared to their purpose-less counterparts.
There’s a real consumer desire to make more ethical and sustainable decisions, and so there’s a widening market for purposeful businesses. But, it can be hard for consumers to sort the good from the greenwashing at times. Getting really clear on your purpose and sticking to it throughout your marketing and business actions is a great way to show people that you mean what you say and to reach this widening audience of ethical consumers.
Andy Lothian recommends using the Ikigai model to narrow in on what that purpose is for you.
The Japanese model asks some simple questions that makes it easier for individuals to understand their reason for being, and the answers lie in a Venn-diagram format. The centre circle is your reason for being, or Ikigai.
He says it helps people to ask themselves: “What does the world need that I can provide? Finding that Ikigai is the starting guide of beginning to be purposeful.”
Purpose is an important part of employer branding. Not only are customers changing their expectations from businesses, but so are employees.
Company culture is a big consideration for applicants in choosing whether to apply to a company, and surveys have found that meaningful work is one of the most important deciding-factors for prospective employees.
The Harvard Business Review also found that purpose-driven businesses outperform their counterparts when it comes to hiring and retention. Part of this is because employees who believe in your purpose and feel a sense of fulfilment are more likely to bring in employee referrals, cutting down recruitment costs and helping to ensure a higher chance of success.
Reputation is just as important for future employees as it is for customers and clients. A bad reputation can cost up to 10% more per hire, so creating a positive and conscious reputation is important as part of a long-term recruitment strategy, to attract both the best talent and reduce costs. In short, almost everyone wants to work for a company that does good. When your company is on-brand, on-purpose and on-point, the talent comes to you.
We all know there’s a strong link between employee happiness and productivity. When purpose is built into the core of the business, it solidifies a positive culture and creates learning environments for your team. When people work for a purpose-driven business, they themselves feel like they are part of the solution which has a powerful effect on productivity.
Whether your organisation commits time to community volunteering, or a pledge to fight poverty, your team are likely to feel motivated by being part of the mission to tackle social issues. Employees who are engaged with their company’s purpose are reported to have increased productivity by 38%.
The John and Natty McArthur University Professor at Harvard Business School, Rebecca Henderson, said that meaningful work can lead to higher levels of engagement, creativity, and that employees are more likely to partner with each other across different departments which can lead to higher levels of efficiency and productivity.
The author of the book Reimagining Capitalism in a World on Fire said: “Once they’re past a certain financial threshold, many people are as motivated by intrinsic meaning and the sense that they are contributing to something worthwhile as much as they are by financial returns or status.”
The role that businesses play in society is morphing and expanding everyday, as are responsibilities that come with it.
Something we hear from our podcast guests and business partners time and time again is that, as communities come up against socioeconomic challenges, whether it be race, poverty, or sexual discrimination, not being part of the problem doesn’t cut it anymore. Instead, they are expected to be part of the solution.
Organisations must commit to building more than just profit if they want to survive in a new-generation economy. The benefits that purpose brings not only affect your reputation and productivity, and it also brings bottom-line benefits.
We help make it easier for businesses to incorporate social good into their business strategy through employee volunteering. To find out more about how we can support you to bring your social good goals to life then please get in touch, or join our community for monthly updates with CSR news, advice and inspiration.
To hear more of Andy’s pearls of wisdom, listen to his podcast episode.