Deciding that societal impact has become “a business imperative,” more corporate leaders are integrating the idea into their core strategies, looking for profits within purpose.
A new paradigm for defining “success” is spreading throughout the business community. It’s a formula that combines a socially aware strategy with corporate activism, directed by the C-suite and backed by boards. The sum of this equation is a holistic measure of achievement, one that values social impact as highly as financial performance. What’s more, companies are finding profit in promoting purpose.
The latest evidence marking this historic shift is a Deloitte report that finds growing support for a broader, social view of a company’s mission. “More than one-third of the more than 2,000 C-suite executives responding to the survey rank ‘societal impact’ as the most important factor their organizations use to evaluate their annual performance, more than those citing ‘financial performance’ and ‘employee satisfaction’ combined,” says Punit Renjen, Deloitte Global CEO. “This year our research finds executives and their companies are strongly committed to improving the world as they embrace Industry 4.0. Our research suggests that business leaders have embraced the belief that doing good also makes good business sense—and organizations are beginning to put actions behind their words.”
Deciding that societal impact has become “a business imperative,” leaders are integrating the idea into their core strategies, looking for profits within purpose.
The report finds that almost half of executives surveyed (46 percent) describe their efforts as driven by the need to create new revenue streams. A similar percentage say, “initiatives that have a positive social impact are necessary to sustain or grow their businesses.”
Renjen points to the increasing actions being taken to back up these beliefs:
The survey notes that companies managing to close any gap between purpose and profits are those that consider social initiatives “fundamental” to their business needs.
CEO leadership is also the main point of a new joint study by Weber Shandwick, a PR firm, and KRS Research, a public opinion research consultancy. According to “The Dawn of CEO Activism,” C-suite-driven statements on issues offer a good opportunity to “drive and differentiate corporate reputation.” And the markets seem to agree. The research found that nearly 40 percent of American adults believe that it is a CEO’s duty to engage with and speak out on hot-button issues. The report notes that the possibilities for purpose-driven engagement with customers and consumers are especially rich with Millennials, a cohort that appears to have an especially open mind toward corporate activism.
But the paper also includes several cautions, writes Leon Kaye in TriplePundit. Foremost is that “companies may want to ensure that such speaking up and stepping out is done if the topic at hand is linked to the company’s core business.” This gets to the question of authenticity, a prerequisite for taking a strong position that is perceived as genuine, not brand burnishing.
Authenticity is essential to a brand’s identity, writes Julia Wilson, Director of Global Responsibility & Sustainability at Nielsen. A company’s products and services and any stands taken must be related throughout its operations, from sourcing and supply chain, to manufacturing and messaging, and to its employees and public messaging. Wilson cites research showing that “transparency wins with consumers, but the imperative for brands to take a stand requires more than simple disclosure. This isn’t just about sharing your full list of ingredients but going deeper into how you source your products–and taking steps to actively support the workers who make that supply chain possible. It’s not just sharing your company’s diversity and inclusion performance but doing more for communities.”
Some would place the start of this socially aware, purpose and profit model at the beginning of the digital era, with so many new companies including social ideas in their founding DNA, from idealistic slogans (Google’s classic “Don’t be evil”) to philanthropic goals, such as Toms shoes’ “buy-a-pair-give-a-pair” purpose. But the importance of the social dimension of business has ramped up exponentially in recent years, driven recently by the rise of the Brands Taking Stands movement. A turbo-charged boost to the concept was added last year when BlackRock’s CEO Larry Fink advocated for social purpose as a crucial aspect of the 4,000 companies in which his $6 trillion fund invests.
That’s quite a challenge—but then what isn’t for the C-suite these days? In a PwC blog, authors Rajiv Jetli and Sebastian de Meel outline “a flood of strategic questions for the C-suite” raised by the new trade era of new policies, tariffs, and what some have called “slowbalization”—the undoing of the global commercial truisms of modern times. They conclude, “Determining how best to act on the answers in a meaningful and timely way, against a tumultuous trade policy backdrop, is the ultimate challenge for members of the C-suite.”
You can say that again—as we do every week, right here. Stay tuned.
Originally posted on the weekly Brands Taking Stands newsletter - be sure to subscribe!
Image credit: Patrick Lanigan/Flickr
John Howell, Chief of Thought Leadership and Editorial Director, is a co-founder of 3BL Media, the parent company of Triple Pundit, begun in 2009. Howell oversees original editorial content procurement and creation. He is also the author of the weekly Brands Taking Stands Newsletter. He has written and edited for Elle, Artforum, High Times, the New York Times Magazine, and the LA Times. Howell is based in Wonalancet, NH.