How incumbents should act appropriately
In the past, established companies have learned to optimize processes and achieve monetary goals. When it comes to efficiency and maximizing key performance indicators, business leaders continue to rely on proven approaches. They strive to increase sales and make profits. This is the principal rule also in today’s markets – as a result of how they have grown historically and as part of the overall economic concept.
The three dimensions of growth
However, suddenly companies are facing a turning point. At least it feels that way to some. Climate debate and energy issues, student demonstrations and the boom of green parties are moving our society, employees and shareholders like never before. For people, the attitude and behaviour of companies continues to increase in significance. They expect companies and politicians to live up to their promises and act appropriately to their responsibilities. This means companies and their brands must become aware of their own raison d’être. In addition to their economic purpose, they should also serve a social and ecological purpose. But what about serving the customers, some may ask now. Shouldn’t they be the key focus of all efforts? Hasn’t that been the mantra auf the last decade? They should also be, but not exclusively, is the right answer. Now it’s about a holistic view and balance.
Focusing on just one of these stakeholder groups no longer works. Today a defined balance is necessary to generate sustainable growth. Without denying the origin of the company and its DNA. Authenticity is crucial. Anything that does not appear authentic – internally or externally – leads to rejection reactions and damages the economic growth of the company, the ecological growth and thus above all our planet and growth socially. As a result, it is just not enough to simply formulate a “customer-centric” purpose statement or to derive the company’s purpose from a business perspective, or to align it solely to social, societal or climate goals. All interests must be adequately addressed, and the individual balance needs to be defined – following the key guiding questions” what is our individual (global) responsibility and how should we act appropriately”.
The demands of the “Purpose Economy”
The “Purpose Economy” is not simply served by introducing well-intentioned communication and declarations of intent. And to clear up a misunderstanding: A campaign alone is not enough. It is interesting to observe how established companies still believe that a purpose, however defined, can be implemented with a so-called “purpose campaign”, thinking they can “tick that box” by doing so. However, today’s stakeholders are increasingly questioning the actions of companies and brands and expect a noticeable change in their attitude and behaviour. They demand action overall – holistic view – and want products, services, people, communication and design to create a uniform experience without contradictions and truly in line with appropriate responsibility. They no longer allow themselves to be convinced by clever communication alone but expect to see appropriate action really taken and even though in their core businesses today. A holistic approach is still often missing, and perceptible actions in line with the company’s individual responsibility must follow. This, of course, is not an end in and of itself, but a commitment to the future-oriented purpose of every company and even still its economic growth.
How established companies should act appropriately now
While young start-ups, freed from the ballast of the past, start to build their products or services around a “purpose”, they become interesting employers, highly recommended brands for customers and investment cases. Managers within large companies and huge legacy often find it difficult to provide meaningful answers to questions with actionable follow up. The gap between the formulated aspiration and actual activities still often is too big. And this is exactly where the opportunity lies: ensuring the implementation of appropriate actions that guarantee long-term growth.
How do well-established major corporations find their purpose and appropriate contribution after decades without a defined purpose and in the light of their extensive legacy? Here are eight key questions they can work with:
On the formulation of the purpose:
- To what extent does your purpose integrate with the company’s existing attitude to ensure it remains authentic?
- Does your purpose address employees, customers and society in a balanced and appropriate way according to your global responsibility?
- Does your purpose clearly define the direction in which the company’s behaviour will be experienced across all touchpoints?
To implement the purpose:
- Do you as a company already have the appropriate products and services in your portfolio? If not, which ones are missing or should be removed to shape that future-proved portfolio?
- Which of the existing additional activities (e.g. CSR activities, Communications, Cooperations) should be prioritised differently?
- Which organizational changes support the adequate implementation of the purpose?
- Are you sufficiently talking about your activities in terms of content and tonality yet? How much does it contribute to your overall key message?
- Are you already leveraging the full potential of a unifying visual identity?
At Prophet, the world’s largest independent growth consulting firm, we believe this topic of purposefulness is not grounded in self-purpose, but in the clear interest of companies and their markets. Only those who acknowledge their responsibilities and act accordingly will generate continuous growth and secure a sustainable future for employees, shareholders and society.
Find out more about how to become a purposeful company by downloading Prophet Partner Helen Rosethorn’s same-titled report: Becoming Purposeful