Purpose isn’t just a numbers game
An executive at a leading FMCG company recently described a dilemma to me: “Ultimately when I look back on my life, will my success be defined by the fact I was the best at selling shampoo?”
She’s far from the only one reassessing their career. In a large part, the Great Resignation has been triggered by millions of people asking how they really want to spend most of their waking lives.
It’s no surprise that the upheaval of a global pandemic, combined with increasing anxiety about climate change, and a renewed focus on racial justice have pushed businesses to place greater emphasis on purpose and sustainability. No one wants to be embarrassed to tell their friends who they work for, especially when so many people are turning away from the corporate world.
In 2021, research from McKinsey found that 70% of employees find their sense of purpose defined by work, yet only 18% believed that they get as much purpose from work as they want. The world of work is being disrupted by the next generation, who have a transformative understanding of what constitutes a “meaningful” career. Businesses need to adapt alongside this change, or they risk hemorrhaging talent.
Despite the clear HR obligation to create more purposeful work, fund manager Terry Smith questioned Unilever–one of the largest proponents of a purposeful approach in the world–over a strategy coined for one of its products: Hellmann’s mayonnaise. In his annual letter, the Fundsmith founder called out the brand for “losing the plot” and tying itself in knots to define the purpose of the condiment.
Clearly, Hellmann’s exists to shift mayonnaise–but their stated purpose is to “make taste, not waste”. Campaigns associated with the brand aim to help reduce food waste. It’s easy to see why employees may be more motivated to work on solving the world’s food waste issues rather than selling condiments.
Unilever employees were, by all accounts, bemused at Smith’s line of attack on the Sustainable Living Plan. Unilever’s highest growth brand is Dove, which is arguably its most purpose-led brand. It’s not just employees that want brands to be more conscious: consumers do too.
Yet in a digital age, where cancel culture and social media encourage a rapid spread of information, accurate or not, the lack of transparency around supply chains in the industry has made it difficult for consumers to make informed decisions about where they should shop. The dialogue on corporate values is too brief and inconsistent. People struggle to distinguish between the businesses implementing serious policies to improve their impact, and those who are merely “greenwashing”.
This is slowly changing. A number of apps such as Good On You and ReNoon help customers identify sustainable fashion choices. Retail giant Target has developed “Target Clean” a new, easy way to identify products formulated without specific ingredients. Many high-growth brands are themselves highly purposeful. Tony’s Chocolonely was created with the mission of reducing slavery in the cocoa-farming industry and is now one of the most popular chocolate brands, with over $100 million in revenue.
When it comes to sustainable shopping, customers often become trapped in an eco-goldilocks conundrum: This product involved lower carbon emissions but that product’s packaging is recyclable. It is nearly impossible for consumers to weigh up competing environmental concerns and it will remain that way until more regulations are brought in.
Businesses should get ahead of this developing legislation–not only to motivate employees and engage consumers but in order to safeguard their share prices. Climate risk is clearly investment risk as Larry Fink said in his recent CEO letter.
“Few things will impact capital allocation decisions–and thereby the long-term value of your company–more than how effectively you navigate the global energy transition in the years ahead,” according to Fink. That’s why it’s important for purpose to be a true northstar: It needs to be thoughtful and well-articulated so that shareholders understand the role it plays in profit.
In our age of activism, no brand can afford the reputational risks of not being seen to be purposeful by customers and felt to be ethical by employees. Truly purposeful companies, however, will be the ones that thrive.
Ella Robertson-McKay is the managing director of One Young World. Unilever is a One Young World partner.
More must-read commentary published by Fortune:
- The Great Resignation’s culture conundrum
- How the European gas market fuels Putin’s obsession with Ukraine
- Arianna Huffington: It’s time to replace work/life balance with “life-work integration”
- We need a radical new approach to tackle scientific misinformation online
- How George Washington defeated a pandemic to save the American Revolution
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