Purposed 2019: 10 key takeaways for the purpose economy
Wow. Just, wow! Yesterday, Wednesday 25 September 2019, we hosted our event Purposed for the second time. An event around the purpose economy and how businesses can turn their purpose into action. When we organised the first edition in 2017, we hosted about 25 purpose enthusiasts. Yesterday, we welcomed more than 150 people, ranging from CEOs and CMOs to CSR and HR managers! That’s 6 times more than in 2017!! This overwhelming enthusiasm shows us the purpose economy is here to stay.
And we noticed it. Most of our audience said they think their corporate purpose should be powered by their people. They also feel that people nowadays are fueled by their purpose. This signifies there’s a shift happening in the business world. We’re going from a focus on money to an emphasis on meaning. And, this changes the way people connect with companies: recruitment becomes attracting, top-down CSR programmes turn into bottom-up initiatives, cause marketing is out and authentic stories are in, and the focus on revenue shifts to a focus on social and business value.
We kicked the day off with a talk from our CEO Diana Krieger and our own purpose expert Wouter Bakker. But, the real highlight of the day – and the reason many came – was the keynote from purpose maestro Afdhel Aziz. The author of ‘Good is the New Cool’ told a personal story about finding his own purpose and shared what he thinks businesses can do with the power of purpose.
We summed up the key insights from Afdhel’s speech. Because we want everyone to become a purpose enthusiast.
#1 Purpose is maturing and Wall Street is waking up
Purpose is not just for the few anymore and sustainability has lost its ‘tree huggers’ image. If you’re not doing something with purpose and sustainability these days, you’re well behind. Today, purpose is in every function and part of the business. We are part of the purpose revolution.
And the biggest corporations are also waking up. Last year, Wall Street giant and true capitalist Larry Fink wrote a letter that he is choosing purpose. And this year, nearly 200 CEOs of the biggest corporations in the USA joined him by signed a document pledging to move to a culture of shared prosperity.
#2 Purpose is the signal that cuts through the noise
It’s getting harder for companies to survive. Where companies used to have an average lifespan of 67 years, now they’re on average around for only 15 years. Aziz thinks that’s because consumers wouldn’t care if 74% of brands would disappear. Only those brands that add value to people’s lives will stick around.
That’s why purpose is important. It’s the signal that cuts through the noise. Your aspirational reason for being provides a call to action for both the organisation and its partners as well as the stakeholders. All the while providing benefit to local and global society.
#3 Your purpose is your why
But how do you find your purpose? There are ample examples of successful purpose-driven companies, like Patagonia or our Dutch pride Tony’s Chocolonely. But these companies were founded from a purpose. Of course that makes things a little easier, but according to Aziz, every company was founded from a purpose.
Your purpose is the reason why your company exists.
It’s the equation of
what the world needs + what your company is uniquely positioned to create.
That’s your purpose.
#4 Pick you sword and your shield
Now there’s a lot the world needs, and you can possibly help out with multiple problems. This is where you have to make a choice. Aziz warns companies to not go overboard. He encourages them to pick their sword and shield. Meaning, pick the one thing you want to fight for in the world (your sword) and decide how you’re going to do that (your shield).
A helpful way to pick your sword is to look at the SDGs. These global sustainability goals give a good guideline on our world’s most pressing needs. And if you need to convince your boss, there’s a business opportunity too: it’s estimated that the SDGs are a 12 trillion dollar opportunity for the private sector.
#5 Purpose needs to be built inside out
There’s no point in preaching to the world when you don’t have your own house in order. You have to practice what you preach, because people won’t hesitate to call you out if you don’t. According to Aziz, this comes down to three areas.
- Sharing skills and expertise
Engaging your employees on your purpose is still number one. By giving them the opportunity to volunteer for causes they care about and simultaneously contribute to your corporate purpose, you create a strong foundation for the purpose of your business.
Research shows that companies that offer volunteering and fundraising opportunities have 57% less turnover.
- Gender equality
In 2019, gender equality should be the norm by now. But unfortunately that’s not the case yet. Investing in equal pay and promoting the amount of women in management positions is not only the decent thing to do, it also results in increased performance for the companies who do.
Companies with the highest percentage of women board directors outperformed those with the least by 53%.
If you want to matter in a globalised world, diversity is the only growth strategy. You have to reflect the world you want to be a part of. Make other cultures and backgrounds part of your workforce. That’s how you innovate. A strong example is Nike introducing a sports hijab, which is now a best-selling product.
Companies with above average diversity have 19% higher innovation revenues.
#6 You need bottom-up initiatives and top-down long-term strategy
To effectively build your purpose from inside out, you need bottom-up initiatives and your top-down long-term strategy to work together. Before, CSR programmes were mostly top-down communicated and sustainability strategies were thought up in an ivory tower. That’s not how purpose works.
To become purpose-driven, you need to talk to your employees and stakeholders. Culture is an inherent part of your purpose’s success. Companies should facilitate meeting in the middle, strategy and initiatives. A clear purpose framework helps with this.
#7 Make your purpose believable towards your customers
Customers are going to hold you accountable. To make your purpose believable, your purpose has to make sense to the consumer. You’re going to have to think about your business goals; if your purpose has nothing to do with your business overall, it’ll become an unbelievable mask.
#8 Purpose is like a bank account
Nobody is perfect. This goes for both people and companies. Sometimes you’re going to do something well and win, and other times you’re going to take a miss and lose. Afdhel shared a well-known example from Nike.
When Nike launched its campaign with Colin Kapernick, it received a lot of attention. Both negative and positive. People were mad: they burned their Nikes and vowed never to make a purchase with the company again. However, there were also tons of people that applauded Nike standing up for something. The company got more than 163 million dollars in free media, sales increased with 31%, and the share value rose with 6 billion.
With this campaign they made a big deposit in their purpose bank account. However, Nike isn’t perfect. In the weeks and months after launching the ad, they also faced a lot of bad press for things like gender discrimination, taking a withdrawal from the purpose bank account.
#9 Purpose must be profitable to be sustainable
World’s biggest problems are the world’s biggest business opportunities. Fact is, you are still a business. And in business, making money is important. At the end of the day, you have to find a middle ground between growth and purpose.
Afdhel gives the example of Adidas’s shoes made of ocean plastic. A few years ago, Adidas partnered with Parley for the Oceans to intercept plastic from beaches and turn it into sportswear. By turning to new materials, the company wants to minimise their use of raw materials and waste. And it turns out to be a pretty lucrative feat: Adidas expects to make 11 million pairs of shoes made from ocean plastic in 2019. That’s double the amount of ocean plastic shoes they made in 2018, resulting in a 2 billion dollar revenue.
#10 But sometimes, purpose must come before profit
Even though profit is an indispensable part of business. Sometimes you have to show that your values come first. That you’re prepared to lose money. A strong example comes from Delta Airlines.
After the mass shooting in Parkland, FL, Delta announced they we’re going to end their discount program for NRA members. This sat not well with a lot of people, including some powerful politicians. As a result, the airline faced to lose a 15 million dollar worth tax benefit. But Delta stood its ground, and CEO Ed Bastian said: ‘Our decision was not made for economic gain and our values are not for sale.’ These are the moments where you can show what you’re made of and that your purpose is real. In the end, the tax benefit was never cut..
Are you ready for the purpose economy?
We had an awesome day and are thrilled to see purpose is becoming an important topic to many. Here’s to an even bigger and better Purposed 2020!
Do you want to know how you can build your purpose from within? Give send Martijn a message or call him at 06 2765 5588. (Just be warned, once he starts talking about purpose it’s hard to stop him.)
Comments about the event or insights about purpose? Please let us know, we’d love to hear your thoughts! Send us a tweet at @GoodUpHQ or use the hashtag #purposed2019.
Below you’ll find Wouter Bakker’s keynote on the theme of Purposed 2019: Purpose, powered by people.