Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.
Much like what a foundation is to a house, a conductor is to an orchestra, and a canvas is to an artist’s masterpiece—a clear purpose is everything to an organization. It is an organization’s soul and identity, providing both a platform to build upon and a mirror to reflect its existence in the world. It articulates why an organization exists, what problems it is here to solve, and who it wants to be to each human it touches through its work. While it’s not the first time in history businesses are pondering why they exist and who they are to their customers,1 the current trend based on our research shows that businesses are using purpose to create deeper connections with consumers, do more for the communities with which they work, attract and retain talent, and in the process, are achieving greater results and impact.
Not every organization views purpose as an all-encompassing ideal. Some consider it merely a tool to advertise who they are and what they stand for to capture more market share. Others believe selling quality products at the lowest price point is the only thing that matters to consumers. While we acknowledge instances of successful companies in the market aligned with this thinking, our research shows that what separates purpose-driven businesses from the rest are longevity and authenticity. Companies that lead with purpose and build around it can achieve continued loyalty, consistency, and relevance in the lives of consumers. Those that fail to identify and articulate their purpose may survive in the short term, but over time, people are likely to demand more.
Purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors, all the while achieving higher employee and customer satisfaction.2 Today’s consumers often identify with a brand’s purpose, seeking to connect at a deeper level even as the brand reciprocally aligns with who they are and who they want to be.
In a recent consumer poll, Deloitte asked respondents to share what they cared most about while making decisions about brands (see figure 1). 3
In today’s world, purpose is paramount. The more businesses talk about purpose, the more it runs the risk of becoming just another corporate buzzword. But in its truest form, purpose is different from the rest. How? Purpose answers an all-important question, “Why does a company exist?”—and the answer can serve as the beacon for all organizational decision-making.
Our findings revealed that many consumers today make decisions based on how brands treat their people, how they treat the environment, and how they support the communities in which they operate. When companies align their purpose with doing good, they can build deeper connections with their stakeholders and, in turn, amplify the company’s relevance in their stakeholders’ lives. Increasingly, businesses are harnessing the power and opportunity of aligning their purposes with societal good. In Deloitte Global CEO Punit Renjen’s Success personified report, leaders ranked societal impact as the number one way they measure annual performance—more than financial performance or customer and employee satisfaction.4
In the following section, we discuss and demonstrate the significance of purpose-led business, offering insights into why some companies choose to drive business from purpose and how others learn from such purposeful practices to evolve their own thinking.
Purpose with an impact
Many organizations are successfully driving purpose into their businesses for three main reasons:
- Purpose is a core differentiator. Purpose-oriented companies have higher productivity and growth rates, along with a more satisfied workforce who stay longer with them.5 Our research shows that such companies report 30 percent higher levels of innovation and 40 percent higher levels of workforce retention than their competitors.6 While traditional trends might dominate purchasing behavior, new opportunities exist to connect with customers through purpose.
In 2019, our consumer survey showed that price and quality remain the biggest factors driving customer decisions.7 However, many of the same respondents (55 percent) believe businesses today have a greater responsibility to act on issues related to their purpose. Those failing to do so risk being displaced by purpose-driven disruptors. For example, Unilever’s 28 “sustainable living” brands (i.e., brands focused on reducing Unilever’s environmental footprint and increasing social impact) such as Dove, Vaseline, and Lipton delivered 75 percent of the company’s growth and grew 69 percent faster on average than the rest of its businesses in 2018 (compared to 46 percent in 2017).8 Soap, petroleum jelly, and tea are everyday household essentials, but by promoting sustainable living, these products became differentiated as they embody the company’s purpose.
- Purpose means something to all people. Purpose-driven businesses factor in the experiences of all humans they touch,9 as people want to work for and support a company whose purpose is focused on the greater good of society.10 “They are looking to work with companies that share their values, that actively express what they are doing to be a good partner with the world,” explains Carol Cone, founder and CEO of Carol Cone ON PURPOSE, often referred to as the “Purpose Queen.”11 Organizations that don’t clearly articulate their purpose to their customers, workforce, and partners may run the risk of falling behind or failing entirely.
On the other hand, brands that have an authentic relationship with all their stakeholders can create meaningful connections with them, enabling those stakeholders to identify with and feel ownership of the brand’s purpose.12 This trend is only set to strengthen as young people around the world are growing up with a deeper sense of purpose than previous generations and are seeking out products that directly support causes about which they care. For example, 53 percent of South African millennials suggest they’ve changed their relationship with a business because of the impact its products or services have on the environment or society.13 Moreover, younger generations also want to work at companies with an authentic purpose, with more than 70 percent of millennials expecting their employers to focus on societal or mission-driven problems.14
- Purpose is who they are. Purpose-driven businesses truly embed purpose in every action, aiming to leave an enduring impact on people’s lives. Increasingly, customers are looking to engage with companies that help them achieve their goals. Whether it’s Kellogg’s aim to “nourish families so they can flourish and thrive” through nutritious breakfast cereals; Patagonia being “in business to save our home planet”; or Sumo Salad aspiring to “make Australia a healthier and happier place”—orienting business around purpose can help companies drive their operations toward outcomes people value, and in turn, deliver what stakeholders value.
Authenticity is paramount
The origin of purpose and its overlap with corporate social responsibility (CSR) can make customers, workforces, and partners wary of a business’s motives. While a company’s purpose doesn’t have to directly impact society as a whole, authenticity is paramount.
Many organizations leading with purpose deploy different strategies to ensure they demonstrate authenticity in everything they do. Here’s how you can do the same:
- Tell your story and make it impactful. Authenticity is rooted in a brand’s commitment to creating an impact and sharing its story. Procter & Gamble’s (P&G’s) push to become “a force for good and a force for growth,” for example, is rooted in telling stories about issues close to its purpose and what its customers value. P&G recognizes that more than 5 billion people across the planet use its products, and as a result, its campaigns seek to demonstrate its commitment to equality worldwide. P&G campaigns such as “The Look” and Tide’s “Wash Away Labels” address issues such as diversity, equality, and unconscious biases. 15 This can enable P&G to connect at a deeper level with its consumers, regardless of who they are and where they are from.
- Walk the walk. Authentic purpose-driven businesses “walk the walk” by being transparent and accountable for everything they do. With incredible transparency and data at their fingertips, consumers today seemingly know everything about how a business brings its products to market. Our consumer pulsing survey revealed that more than 80 percent of consumers would be willing to pay more if a brand raised its prices to be more environmentally and socially responsible or to pay higher wages to its employees. Out of these respondents, 15 percent said that they would be willing to pay over 25 percent more for a brand’s items.
Thus, when a brand leads with purpose—authentically—it can achieve a “trusted status” with its customers, workforce, and partners, opening up new connections while increasing growth and revenue. Take the instance of Max Burgers, a burger joint founded in Sweden in 1968, addressing the issue of climate change. In launching its Climate-Positive Burgers, Max Burgers aimed for greater transparency about its sourcing and the impact of its products on customers and the environment, helping earn trusted brand status in the process.16
- Put all humans at the heart of your decisions. Brands leading with purpose often occupy a meaningful place in the hearts and minds of all the people they touch. For example, at Deloitte, our purpose—making an impact that matters—serves as the soil from which everything else grows, influencing and fueling life in all parts of our organization, work, and talent. Our purpose guides everything we do—from hiring and learning and development to who we want to be for our customers and the communities in which we work.
Acknowledging the importance of diversity and inclusion and representing all humans in the decision-making process further proves the authenticity of a brand. To support inclusive decision-making, Deloitte encourages their workforce to apply a lens of empathy in everything they do. Supported by human-centered design techniques, Deloitte practitioners are provided the opportunity to participate in training to learn approaches that encourage empathy by placing themselves in the shoes of clients, partners, stakeholders, and colleagues, to guide our collective work. By investing in training and learning, practitioners can better connect with people, and companies can ensure their people are their greatest ambassadors, helping achieve and communicate their purpose.
- Let purpose evolve with the organization and bond its people. Every business is founded with a core purpose, but purpose can require nurturing and revisiting too. Stoke your purpose over time, revisit your core DNA, and evolve it inclusively with all your people. Then use the findings to help bond people across siloed parts of the organization, define your strategies for customer engagement, cultivate a diverse culture, and define and refine who you are in the world.
Achieving meaningful growth
In a world overflowing with options, many brands authentically leading with purpose are discovering new opportunities to deliver value to their customers and the communities in which they operate. By leading with purpose, being authentic in how they tell stories and articulate their impact, focusing on all humans, and imbibing empathy, many of these companies are outpacing their competitors and leaving an impact on everyone they touch.