Purpose is at the top of every smart CEO’s mind. 79% of business leaders believe purpose is key to business success (according to this PwC survey). And more business leaders than ever are approaching ActionFunder for support in putting their purpose into practice.
Business leaders are refocusing to make purpose central to their strategies. Some are making the shift because they see the destruction that capitalism has caused in the last century. And they’re taking personal responsibility to help reverse the damage.
Others are motivated by the ever-increasing business benefits of leading with purpose. The data is too big to ignore. Research from B Labs shows that purpose-driven businesses grow 28 times faster than the national average. Companies that lead with purpose have 40% higher retention rates and 64% of their employees are more engaged. Not to mention the fact that consumers are 4.5 times more likely to champion their brands.
Watch out for purpose washing
Sadly, some companies are trying to use purpose as a shortcut to growth, otherwise known as “purpose washing.” This is basically when brands create marketing campaigns to show support for current events or trending topics without doing the foundational work to back it up.
“In the rush to stand for something, some organizations have risked putting the purpose ‘story’ ahead of the purpose plan and actions.” ~Becky Willan, Co-Founder & CEO, Given
More often than not, purpose washing is the result of poor planning rather than an intentional decision to deceive. Regardless of the cause, the consequences are the same.
Purpose washing erodes trust, destroys brand reputations, creates PR nightmares, dampens employee morale, and causes companies to lose customers. (According to Global Web Index’s Corporate Social Responsibility report,) 81% of online consumers in the UK and US say they may stop using a brand if they found out it made a misleading pledge about environmental or social issues.
It’s more important than ever for companies to walk their talk.
Tips to help you put “purpose” into practice
Purpose is so much more than a marketing campaign. It’s about the way your business operates, the decisions it makes, and how it treats its people. To reap the rewards of purpose, your efforts must be genuine.
There are some key steps you can take to make purpose part of your ethos before rushing to issue press releases or create big ad campaigns.
Connect the dots.
Chances are, you’ve done some great work already towards identifying and actioning your company purpose. Check in on your company values, mission, and vision to start. You’ll likely find there’s a principled purpose woven through your positioning.
Then take a look at what your company is already doing across environmental measures, and social support for workers, customers, and other stakeholders. Perhaps some of those measures are written up in your company policies too. Chances are, you’ll find plenty of activity across your organisation already putting purpose at the forefront.
Once you’ve reviewed what your purpose is and the sustainable practices that are already putting purpose into practice, it’s time to strategise. How can you build on what you’re already doing to put purpose at the forefront? Think about how you can use purpose to inform leadership strategies, hiring practices, procurement processes, sales and marketing activities, customer service approach, company culture, and more.
Consider the full spectrum of purpose.
Walking your talk means considering the full spectrum of purpose. That means being purposeful in considering and actioning Environmental, Social, and Governance (ESG) factors. Here are some of the points to consider in each of those areas:
- Environmental: the energy and resources your company uses, the carbon emissions and waste it produces, and the impact it has on the environment.
- Social: the relationships your company has with customers, communities, institutions, other organisations, and employees.
- Governance: the practices, controls, and procedures your organisation uses to govern itself, make decisions, ensure compliance, and meet stakeholder needs.
Get buy-in across the organisation.
The more people in your organisation who have their fingerprints on prioritising the company’s purpose, the stickier it will be. Here are a few approaches to consider:
- Create a working group with members from across the business to collaboratively shape your purpose plan.
- Leverage C-suite and departmental leaders as public-facing champions of the company’s purpose.
- Align company values with your purpose to help make it more tangible and pull it through the company culture.
- Acknowledge employees who push the purpose agenda with rewards, recognition systems, promotions, and incentives.
- Involve people from across the business in fun decisions like which charities to support.
Collaborate to increase impact
The more people you can get behind your vision, the bigger impact you’re likely to have. Think beyond employees. Collaboration efforts should include investors, customers, and even competitors.
Collaborate with investors: Many investor firms organise annual match funds or issue grants in the names of their portfolio companies. Consider proactively reaching out to your investors to choose non-profit partners that are meaningful for both of you.
Collaborate with customers: Give back campaigns are one way to get customers involved with your purpose-led efforts. In fact, some businesses are built on this model.
TOMS is probably the best-known example. From its inception in 2006 through 2019, every time someone purchased a pair of TOMS Shoes, the company gave a pair to a child in need. Over 100 million pairs of shoes were donated through this One for One™ model.
Another sustainable clothing company, Ten Tree, plants ten trees for every product sold. More than 50 million trees have been planted to date.
Why not let customers choose which causes you support when they buy from you or use your services? This is a model you will have seen in major supermarkets and you can easily build it into your own customer journey by giving each customer or client the chance to vote.
Collaborate with competitors: Working with competitors might be foreign to you, but collaborating with similar companies can lead to powerful ripple effects and help you achieve big purpose-led goals.
In 1989, the top four outdoor apparel companies–The North Face, Patagonia, REI, and Kelty–teamed up to launch The Conservation Alliance. Its mission is to fund and advocate for the protection of North America’s wild places. The alliance has grown to 270 member businesses and helped save more than 73 million acres of wildlands, protect 3,580 miles of rivers, stop or remove 37 dams, designate five marine reserves, and purchase 21 climbing areas. None of these brands would have been able to create this significant impact alone.
Get third-party accredited.
Third-party credentials can go a long way toward building trust. They give a strong public declaration that you mean business when it comes to owning your values There are over a dozen sustainability certifications for UK businesses. B Corp, CSR-A, and Planet Mark to name a few.
- B Corp Certification was introduced by global non-profit B Lab in 2006 and is fast becoming the accreditation of choice for purpose-driven businesses. There are more than 4,000 certified B Corps worldwide, with more than 500 of those based in the UK. ActionFunder is proud to be among them as we empower thousands of companies to be a force for good in their local communities.
- CSR-A gives accreditation and membership to companies that meet sustainability standards across 4 key pillars: environment, workplace, community and philanthropy. Their approach is focused on integrating social responsibility in all aspects of a company’s operations.
- PlanetMark is a sustainability certification that helps organisations to reduce carbon emissions. Certified businesses decrease their absolute carbon emissions by an average of 24% per year by reducing energy, waste, and water consumption, and improving travel and procurement practices.
Let data be your guide.
Part of walking your talk is conducting an assessment of your current performance. B Impact Assessment is a digital tool that gives an objective view of your company’s impact on the environment, communities, customers, suppliers, employees, and shareholders.
Once you’ve documented your current performance, we suggest you develop a framework to regularly measure progress. There are many different ESG and CSR tools that can help you to calculate your social and environmental impact. The insights you’ll get from these tools will help you to keep setting bold and achievable purpose objectives.
Be transparent with your performance.
Transparency is more than a “nice to have”. It’s a necessity. Investors, customers, employees, and the community at large all want to know how well you’re measuring up to your commitments.
So don’t keep your data in a bubble. Share where your company is in its purpose journey. Celebrate your wins both internally and externally, and be honest about where you still need to make progress to win trust and avoid being outed for falling short when your objectives aren’t reached exactly according to plan.
Lots of companies use annual impact reports to share where they are on their purpose journey. In fact, more than 90% of the world’s top 250 companies now produce an annual report on CSR (according to the KPMG Survey of Sustainability Reporting).
Get going with some quick wins!
Between net zero initiatives, cleaning up your supply chain, and creating more equitable and inclusive cultures, there’s a lot of hard work to be done. Getting some quick wins along the way will help keep you motivated while demonstrating real progress to stakeholders. A great way to find a quick win? Ask your team for ideas to activate your purpose. No doubt the creative and practical power of you and your colleagues combined will throw up some quick and easy wins to get you going on your purpose activation journey.
ActionFunder is a company-to-community funding platform that supports action rather than words. You can use it to find and fund local non-profits that align with your purpose, follow the work, and share results with stakeholders. By funding non-profits that are taking action on the ground, you’ll create tangible, measured impact. Plus, ActionFunder cuts the time and cost of local giving by 75%, significantly improving the profitability of your social impact programs.
The journey to becoming a purpose-driven company doesn’t happen overnight. But if your organisation commits to doing the internal work, your efforts will surely pay off. If you want some support in getting started get in touch with the ActionFunder team. We offer consultancy services to businesses that want to walk the talk on purpose.