Purpose Inspires Strategy

"Far and away, the best prize that life offers, is the chance to work hard at work worth doing." ~Theodore Roosevelt

Back in Teddy’s day life and business were easy.  A company’s purpose was simple: satisfy stockholders by selling more and making more profit.  While the world has become more and more complicated, more global, and more connected, many companies haven’t changed their purpose. 

Leadership teams can’t continue to focus solely on maximizing profit, they need to know who they are and what they stand for.  Social responsibility is the one concept that links both external and internal stakeholders. 

Despite Wall Street’s short-term performance expectations, companies with high ratings for environmental, social and governance (ESG) topics had operating margins 3.7X higher, on average, than those of lower ESG performers. They also generated higher annual total returns to shareholders, outperforming lower ESG performers by 2.6X. And, these metrics will only grow in years ahead.

"If you aren’t fully embracing the Purpose Economy by now and transforming your entire organization, you are going to join the likes of Blockbuster, RadioShack, Sears, Kodak, and Tower Records." ~ Aaron Hurst, author of “The Purpose Economy”

A purpose-driven business strategy creates value for stakeholders and is usually global.  It’s not just a marketing & communication strategy, the company reorganizes its processes around the purpose. 

Consider CVS whose purpose is to help people on their path to better health.  In 2014 the pharmacy company stopped selling cigarettes and lost $2B in sales.  They rebranded to CVS Health, and added pharmacy benefits management, and merged with Aetna.  Their social responsibility advocates and implements policies to stem the opioid crisis.  CVS is a good example of how to use a purpose-driven strategy to reshape the playing field.

Living a purpose-driven strategy is not easy and many companies don’t choose to take that path.  Reasons include the organization’s lack of interest in embedding a far-reaching purpose into the organization; unwillingness to focus on sustainability and diversity programs within the company and with partners; only focusing on short-term profits.  We believe that companies that don’t adapt will not succeed long-term.

"Purpose is one of the most exciting opportunities I’ve seen for this industry in my 35 years of marketing. Done properly, done responsibly, it will help us restore trust in our industry, unlock greater creativity in our work, and grow the brands we love." ~ Alan Jope, CEO of Unilever

So, what do we know?  Data and analytics are the new normal and companies need to use them to shape their purpose.  Data needs to inform a company’s purpose.  Data and analytics should be able to answer benchmark questions about where the value is. 

Behavior

• How does the world see us?
• What do we believe in?
• How do we describe the personality of our company?
• How is it manifested by our employees and leadership team?  What are the behaviors?
• How do our stakeholders connect with our products, our services, and our brand?
• How will our behaviors impact the future success of the company?

Demography

• How are we unique?
• Where can we go?
• What are and will be the trends that affect the business?
• Can we decompose our business components and rearrange them to be more successful? 

Finally, it’s about the people.

"People don’t buy what you do, they buy based on your reputation." ~ Simon Sinek

The challenge is to create evangelists among stakeholders. 

• Millennials and Gen Z consumers are significantly more likely to be loyal to a purpose-driven brand.
• Millennials are significantly more likely to want to work for and would be willing to take a pay cut to work for a purpose-driven company.
• 4 out of 5 investors agree that ESG integration will lead to equity out-performance over the next three years, and 7 out of 10 agree in fixed income.

Today’s stakeholder is tomorrow’s leader. Reputation is important.  How are we managing reputation risks?  How are our strategies doing the right thing? 

All of these can only be answered with the right data, the right pulse of customer, the right measure of reputation, the right analytics, the right systems, and delivered in an easy-to-consume way.

"I never guess. It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts" ~ Sir Arthur Conan Doyle

Data is the new normal.  Data is a prized asset.  Industry leaders recognize the value of data and purpose-driven companies power their strategies with data and analytics.  According to Forrester, while 74% of surveyed companies stated their desire to be more data-driven, only 3 out of 10 were good at connecting analytics to actions.

Robust strategies answer the HOW and produce an external roadmap to open new markets, improve customer experience, save costs, and innovate new products and services.  Robust strategies create evangelists, reinforce a learning and evolving organization, and inform talent acquisition.

Only data will define the ability to perform and adapt in the fast-evolving business world. 

Enterprises must harness data potential to derive the intelligence that inspires their business strategy.

Resources are scarce. 

Time is limited. This is THE second chance because there is no third chance.

Time Is Now.  We must move forward and continue Rising Ahead.

Author | Joanna Pasquale 

References | Accenture “Signals of Change” 2021 & Deloitte “Monitor” 2021