Freya Williams, author of Green Giants: How Smart Companies Turn Sustainability into Billion-Dollar Businesses, recently gave an inspiring speech where she discussed the first nine (or ten) companies that had successfully been built into billion-dollar brands by focusing on purpose. As I was listening, the person sitting next to me asked why so many other companies – including the $6B company he represented – were not considered one of Freya’s “Green Giants.”
I am not mentioning this because Freya’s analysis is flawed. Quite the contrary: the first time I read the statistics supporting the business case for strong purpose initiatives, I started sharing the news far and wide because, finally, there was concrete evidence that people, planet and profit were intrinsically linked (click to tweet). I mention this because I think the person sitting next to me was right too… there are probably many other companies that qualify for the billion-dollar purpose club, but don’t have the strategy in place to capitalize on their existing initiatives.
There is growing and fairly indisputable evidence reinforcing the notion that companies that have a defined purpose – standing for and taking action around something bigger than the products and services they provide – are growing, prospering, attracting the best talent, and staying competitive in an ultra-competitive economy. Whether the emphasis is on preserving the planet, ensuring the well-being of their people and communities or both, “purpose” has become a source of inspiration for employees to rally around, the emotional tie for consumer purchasing decisions and, arguably more critical, the lens through which a company makes business decisions.
What the business community does not know, however, are the obstacles standing in the way of more companies increasing their investment in developing, defining and living up to a greater purpose. So, we decided to ask.
Ketchum conducted a global study of retailers and durable consumer good companies to better understand the dynamic between retailers and manufacturers as it relates to their purpose-driven initiatives, drivers for investment and barriers for growth. Here are a few key insights we uncovered:
- Reputation, Business Return and Staying Competitive are Top Three Drivers – but Consumers Still Matter:
Approximately three-quarters of the manufacturers and retailers surveyed agree on the top three drivers and confirm that their investments in sustainability and social issues are a strategic business choice, not a reaction to a consumer trend. Clearly this speaks volumes on how embedded purpose can and will continue to be.
- Meaningful Measurement and Communications Are the Main Obstacles to Implementation and Expansion:
Retailers and manufacturers across all regions are frustrated by the measurement of return on purpose. For example, 6 in 10 retailers surveyed believe purpose-driven initiatives are critical to long-term growth, yet 4 in 10 surveyed say they will invest only if ROI can be measured. More than half of the retailers surveyed said they do not communicate enough around their efforts, while nearly half of all manufacturers surveyed said they felt people do not care as much as they say they do. While there have been significant advancements in measurement across the board, standardization is required in order for companies and their stakeholders to accurately compare and contrast advancements.
Nearly all retailers and manufacturers in the study agree that purpose-driven work is important to their company today (94 percent and 98 percent, respectively) and expect it will increase over the next two years (93 percent for both). These statistics are encouraging because it tells us that we will be seeing more and more leaders focused on embedding purpose within their companies and brands, thus truly making purpose sustainable.
If communicators and counselors can harness the momentum and address the challenges, we will see a new Green Giants list that is brimming over with names already in the billion-dollar club, and others well on their way.
Do you have any questions about the findings of our survey or how we help you deliver greater ROI on your purpose initiatives? Feel free to contact me via email here.