Two decades ago, Dove took a stand to challenge what it calls “false beauty standards”. If you have seen their most recent campaign, The Code, the soap brand renews its vow to champion “real beauty”, with a commitment to never use AI to create or distort images of women.
For 20 years, “real beauty” has been a defining motivation for the Unilever brand, giving it a distinct personality and committing it to a singular purpose.
Can you or your clients, with your hand on your heart, define the purpose of your business?
Purpose-driven businesses grow faster and have higher consumer and employee satisfaction rates. So, read on to find out the benefits to you and your clients of coalescing around a clear soul and identity.
Understanding why a business exists
Deloitte says that having a purpose is as important to a business as “a foundation is to a house, a conductor is to an orchestra, and a canvas is to an artist’s masterpiece”.
Having a purpose:
- Articulates why you or your clients’ business exists
- Explains what problems the business is there to solve
- Tells people who the business wants to be to everyone it touches.
Being a purpose-driven business isn’t just about donating some profits to charity or helping out in the local community. It’s something that is woven into the DNA of the business, helping to guide decision-making and how the firm operates.
In the past, you or your clients may have seen sustainability, diversity, equity and inclusion as a side issue, or the responsibility of an individual within your company. Today, however, these are regular boardroom issues and form part of who the company is.
Think about those firms that stand for something:
- Colgate – The toothpaste brand has run its Bright Smiles, Bright Futures initiative for 30 years. It reaches children through free dental screenings and oral health education, so far helping more than 1 billion children and their families across 80 countries.
- Ben & Jerry’s – The ice cream brand is guided by its core values to advance human rights and dignity, support social and economic justice for historically marginalised communities, and protect and restore the Earth’s natural systems.
- Co-Op – Co-Op’s purpose reflects the company’s commitment to making a positive impact on society and the environment, while also providing high-quality products and services to its customers.
As you’ll read later, having a purpose can have huge consumer benefits. Indeed, Deloitte found that more than 80% of consumers would be willing to pay more if a brand raised its prices to be more environmentally and socially responsible or to pay higher wages to its employees.
3 steps to finding a purpose
When establishing the purpose for your or a client’s business, there are three key steps.
1. Clarify your purpose
As an individual or as a company, define the purpose with as much detail and clarity as possible. Identify what differentiates your purpose and what makes your contribution to it unique.
2. Articulate the purpose
Whether an individual or a company, write down your purpose and revisit it regularly to keep it fresh. Regularly remind people about why the business exists and what it’s there to accomplish, so everyone can make decisions based on this underlying purpose.
3. Use the purpose
Actively use purpose for decision-making. You and your clients can use purpose to define strategic choices and to develop their value propositions and future plans.
Having a purpose can help you grow faster
Deloitte says that purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors.
Using the first example above, Unilever’s 28 “sustainable living” brands such as Dove, Vaseline, and Lipton delivered 75% of the company’s growth and grew 69% faster on average than the rest of its businesses in 2018.
Purpose-driven firms boast higher employee and customer satisfaction
Deloitte also reports that purpose-oriented companies have higher productivity and growth rates, along with a more satisfied workforce who stay longer with them.
The research shows that such companies report 30% higher levels of innovation and 40% higher levels of workforce retention than their competitors.
Additionally, Forbes reports a study from Psychosomatic Medicine that showed people have less incidence of cardiovascular disease and lower mortality when they have a greater sense of purpose.
Moreover, younger generations also want to work in businesses with an authentic purpose. More than 70% of millennials expect their employers to focus on societal or mission-driven problems.
People want to work for companies that make a difference. So, if a company can authentically point to how it is building a sustainable future and workforce, through the support and benefits it provides to its employees, it will have a head start attracting new talent.
Research from HSBC asked consumers about the likelihood of behaviour towards both purpose-driven and purposeless companies.
Source: HSBC
The research found consumers are four times more likely to trust, purchase from, and recommend purpose-driven companies. They’re also six times more likely to defend a purpose-driven company in a “challenging moment”.
Get in touch
We specialise in working with business owners to build a sustainable financial plan and help them to achieve their life goals.
If you have a client who would benefit from Chartered advice, or you’d like to explore how you can work more closely with Sovereign, please get in touch. Email hello@sovereign-ifa.co.uk or call 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
