Businesses that stand for something greater than what they sell are more likely to be profitable post-pandemic
Just as the global pandemic has changed the way we work, it has also changed what people expect from brands and businesses.
Has the COVID-19 pandemic affected business? Without a doubt, yes. The pandemic has caused many businesses to suffer, even to shut down entirely.
But has it stopped business from being done? No.
Rather, it has changed the way we operate and connect. It has caused businesses to evolve and expand their definition of their bottom line in the context of consumers expecting more from their brands, both in terms of service and delivery, but also in terms of ethics and societal impact.
Finding purpose or purpose-washing?
As companies look to rise above the noise and build a competitive advantage, there is a clear fundamental shift towards ‘purpose’.
In today’s world, whether you’re in lockdown or not, consumers’ expectations of brands aligning with ‘their’ personal values is critical. They want businesses to meet their needs, but also to contribute to the many challenges created or exacerbated by the COVID pandemic and other global challenges, from mental health to unemployment.
What COVID-19 has given us then, is an opportunity to demonstrate competitive agility by building more authentic, and therefore, more enduring, and hence profitable, relationships with customers.
It’s not just about your product or price anymore. Brands have become community property that consumers choose to invest in, be it to help the environment, their communities or society at large.
As a result, panic is setting in and we are seeing inauthentic, tick-the-box corporate social responsibility (CSR) strategies or bolt-ons develop, driving the worrying trend of purpose-washing among corporates.
They may appear to be doing good on the surface (to appease their customers), but if you dig a little deeper, there isn’t any substance. It won’t end well for those organisations.
I’ve watched a bank in Australia knowingly observe government JobKeeper (which is furlough pay) flow into the online gambling houses, affecting mental health in homes, domestic violence, and substance abuse. Where is the ethical line to be drawn between profit and social responsibility?
Throwing money at a problem is only part of the answer. Investing in long-term solutions and embedding purpose in your organisation’s DNA is a currency far more valuable.
Moving from doing good to driving change
Yes, companies have long tried to ‘do good’. However, these days this needs to be more than a just mission or impact statement. It’s an opportunity where a brand can demonstrate measurable impact and provide that differentiation that many consumers are in search of.
As Salesforce chief innovation officer Simon Mulcahy noted in the company’s fourth State of the Connected Customer report, not only are ongoing economic, health, leadership, social justice, and climate crises causing customers to “demand digital-first convenience and are leaning on brands to innovate like never before”, but “they are laying bare an urgency to earn and build trust while supporting and caring for all stakeholders — from employees and customers, to shareholders, to society at large”.
Indeed, purpose must be crafted to meet your customers’ values.
Your head, heart and hands must align because ethical values, culture and transparency are just as important to your bottom line. Companies’ words, actions, values and beliefs matter more now than ever before.
Consumers who are disappointed with a brand’s actions not matching its words will happily voice their opinions, and technology and social media will enable them to do on a grand scale, and most will walk away, forever!
They will, however, reward authenticity, strong leadership, and outspokenness with loyalty, which in turn drives engagement. In so doing, purpose can create sustainable value for both your customers and your employees, stakeholders and brand.
Creating shared value
As customers and clients become more discerning, companies must align business operations with a measurable ESG strategy to survive and adapt to the current ‘ecosystem of shared value’.
As Mark Kramer and Marc Pfitzer note in the Harvard Business Review: “Companies that turn to collective impact will not only advance social progress but also find economic opportunities that their competitors miss.”
COVID-19 has changed the world; it has signalled a new era in the digital and ethical revolution. By meeting with purpose, the impact is immediate, measurable and sustainable (for all parties), and well, it feels good.
