Is Social Purpose a fad?
We have all been subjected to tedious and short–lived management fads – why is Social Impact, or “Purpose” any different?
No-one can forget the pseudo -karate fad that was “Six Sigma”. Only those with a doctorate in algebra were considered worthy enough to identify business issues, and win the coveted “black belt”.
Then, on the back of Nordström and Ridderståle’s book “Funky Business” came a plethora of office slides and adult soft play areas driven by a belief that “coolness” equated to competitive advantage.
“Core competencies” came next, where companies thought that they knew what the consumer wanted, better than the consumer themselves, and believed rigidity showed strength. Kodak’s history proves otherwise.
So why should Social Impact be any different?
In 5 years, will we all look back and laugh and say that the only “impact” management teams needed to consider, was the bottom line? Or that making a difference to the world should have been something considered by the individual and families, outside of the work arena?
Perhaps……but there is a fundamental difference between management fads, and Social impact. Six Sigma, office play areas, and core competencies are entirely disconnected to the society in which businesses operate and were fads that existed before social media. Now every consumer, employee or client has the power to champion or destroy a business’ brand equity with one tweet – and a lack of a social impact strategy can make a brand appear shallow and mercenary.
As Jeff Fromm points out “Companies like Unilever have seen first-hand the tangible value of making purpose a core driver of growth and differentiation. Nearly half of the company’s top 40 brands focus on sustainability. These “Sustainable Living” brands, including Knorr, Dove and Lipton, are growing 50 percent faster than the company’s other brands and delivering more than 60 percent of the company’s growth. The company’s commitment to improving public health with nutritious foods and a new level of transparency to ingredient sourcing has resonated with health-conscious consumers.” (A Purpose Driven Brand, Jan 2019)
Social Impact strategies will remain core to business success, because, according to Jeanne Meister (“The 2020 Workplace”) the bottom line no longer exists in the singular. She claims that the historical focus just on profit, has been replaced by a triple bottom line where a focus on People, Profit and Planet are equal predicators of success. Perceptions or allegations about a lack of integrity in management (Philip Green Arcadia, Ray Kelvin – Ted Baker); a perception of corporate mistrust on the back of economic crises ( Facebook providing an online “magical” tour of the damage in Puerto Rico after the hurricanes as app selling tool) or ill –considered environmental claims (Volkswagen emissions scandal 2015) caused significant damage to brand equity.
So what can a social impact strategy do to protect brand equity, attract top talent, and create client loyalty?
Developing and implementing a meaningful Social Impact strategy, with its roots firmly in the businesses’ overall purpose can help, by demonstrating the integrity and depth of the company.
The first step is to identify what your company purpose is and from this what you are trying to achieve with your Social Impact strategy. This needs to utilise your business skills and assets, connect with your clients, and have a reason, other than profit, in which your stakeholders can believe. For example:
- Driven from their purpose of ‘Unstoppable Power”, Duracell use their product and infrastructure in their “Power Forward” initiative, in which batteries are sent worldwide to help areas hit by hurricanes and floods.
- Lego are “committed to making a positive impact on the world our children will inherit” and have introduced a three tier social impact strategy – 1 ) they introduced Lego Life – a social network to allow kids to play safely online 2) 100% of the energy used to make bricks is now balanced by wind power and 3) they introduced 400,000 children in local communities to play activities centred on social and environmental issues.
- Goldman Sachs corporate engagement team states “Goldman Sachs and its people are committed to helping communities where we work and live – and in places more distant – where our ideas, people and resources can make a difference” and support 10,000 small businesses, a year with financial and mentoring assistance, making use of the intellectual capital of their employees, and enhancing their brand equity amongst their peers.
Once the business has decided upon and committed to a social impact strategy the business needs to make a genuine commitment to it. This could involve monetary donations, volunteering, “free” research and development or contributing product / skills to help achieve the societal aim. In this way employees, clients and consumers will more strongly associate with the brand and its societal credentials which over time will not only help ensure the sustainability of the business itself but will create value for all stakeholders.