The journey to purpose is not a tactic. If not authentic, customers will see right through your feel-good message.
Six years ago, Harvard’s Michael Porter and FSG’s Mark Kramer made the bold statement that shared value – the idea that the purpose of a company is to achieve both shareholder profit and social purpose – would “reinvent capitalism.” They encouraged companies to go beyond corporate social responsibility and integrate social impact into their competitive strategy.
“Purpose is not just philanthropy. It’s a source of competitive advantage.”
Since then, we have worked with a group of marketing executives and business leaders in Silicon Valley and the Bay Area. Each year we assess the issues that are most top of mind. This year the issue of profit and purpose came to the fore.
To understand why, we interviewed more than 20 chief marketing officers and CEOs.
The importance of purpose
We found widespread agreement that having great products and services and being a “good corporate citizen” are table stakes in a world of empowered citizens and consumers.
“Any customer these days is asking for transparency on what a company stands for and why they operate,” says Melissa Waters, CMO of Lyft.
Purpose is not just philanthropy. It’s a source of competitive advantage. One of the key findings of our conversations was how purpose created advantage internally by aligning and energizing the organization.
Antonio Lucio, CMO of HP, finds that purpose streamlines decision making.
“The amount of time management teams are spending reacting to dramatic changes in the world is unprecedented. Purpose becomes the compass against which you’re making decisions.”
Purpose also attracts, empowers and inspires employees.
Mike Marcellin, CMO of Juniper, says, “People are looking for a worthy purpose or vision they can believe in. The more inspired your employees are, the better the work they are going to do.”
“A great purpose is grounded in something universally true that is authentically delivered by your brand.”
Journey rather than destination
In our conversations, we were struck by how systematically companies were approaching purpose – from how they initially define their purpose to how they embedded into the fabric of the business to how they sustain engagement with purpose over time.
The origin of your company is often a starting point to finding the company’s DNA – the “why” that gets people up in the morning and the common thread connecting the past, present and future.
Vineet Mehra, CMO of Ancestry, says, “A great purpose is grounded in something universally true that is authentically delivered by your brand and product.”
A challenge is how to sustain purpose over the long haul.
In its 60 years as a business, Visa has maintained a strong connection to founder Dee Hock’s vision, organized around a shared purpose and strong principles.
Lynne Biggar, the company’s CMO, attributes this longevity to “staying true to a vision that is truly authentic to our business.”
Many of the executives warned that the journey to purpose is not a tactic. Customers will see right through a “feel good” ploy about the wonderful things the company is doing.
If the company has been more focused on profit than purpose in the past, you have to be ready for some degree of skepticism and find ways to engage the skeptics in the process.
The fusion of profit and purpose is a journey more than a destination. If you are at the beginning of that journey, start by having conversations with your stakeholders about how you can connect the two more closely.
This article originally appeared on Harvard Business Review and was republished with permission.
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