What has purpose-driven business got to do with Covid?
At first glance, you may already be thinking “Nothing – this is click-bait…another article cashing on in Covid to get views!”
But bear with me for a minute.
We are in a time of unprecedented uncertainty. We literally do not know what is going to happen tomorrow.
Last night Trump banned Europeans from entering the US. Lufthansa’s share price has gone into a tailspin and Air France is debating cancelling all flights. You have to go back to 9/11 to come anywhere close to this level of global chaos and uncertainty.
We are in a crisis and it’s only going to get worse.
But, when we begin to emerge from it, as we inevitably will do, the companies and brands who will be standing strongest will be the ones who are clear on their purpose, clear on what they stand for and clear on why they exist – not just what they do and how they do it.
Why is that?
Because purpose-driven companies are the ones you want to buy from, the ones you want to work for, the ones you want to win and the ones whose brands you are proud to associate with.
In the words of Paul Polman, ex CEO of Unilever
“[People] don’t want to go end their lives and look back at what they’ve done and say, ‘Well, I built market share of Dove 4.5% […].’ No, they want to say I helped so many millions of women get self-esteem, I helped so many people improve their nutritional situations, and by doing so, I’ve actually strengthened the institution I represent’. And that is really purpose in action.”
Firms that are clear on their purpose and that live their purpose grow faster than those that don’t (85% of purpose driven companies showed positive growth over the last three years, compared to 42% of non purpose-driven firms).
They attract and retain the best customers, particularly when things go wrong (like they always do and are doing right now).
They attract and retain the best people. Employees are three times more likely to stay in a purpose-driven company than a non-purpose driven company. Three times! Employee satisfaction tends to be almost twice as high.
Their stock prices grow faster. Take Tesla – the only automotive car company with a purpose (which is to accelerate humanity’s transition to sustainable energy). If you had put $100 into Tesla stock in March 2016 it would be worth $350 today. If you had put the same $100 into General Motors at the same time, it would be worth exactly $100 today.
When you get a crisis like Covid, the status quo gets fundamentally disrupted. Things get turned on their heads. Impossible becomes reality. And when the system gets shifted, the companies who don’t have a purpose that benefits people and planet are at big risk.
Because, you, the consumer, would rather not buy from them.
You buy gas from Exxon because you have to. And as soon as you have a viable way not to, then you won’t anymore.
That’s the crux of it.
And in the rare moments of systemic shock like the one we are entering now, when we are all jerked out of autopilot and when suddenly everything is on the table, we actually get to choose: who do we actually want to buy from and who do we want to work for and align with and what meaning do we want our lives to have?
The great thing about a crisis is how it rewrites the rules. No-one could have predicted yesterday that transatlantic aviation would have to hit the pause button. But now that it has been, we get to ask ourselves what we want to do about it.
For many, getting on a plane had become a given, a reflex. I know it had for me. But when it’s no longer an option, we have a chance to check in on what is really important for us and write a whole new set of rules around that.
I do a lot of public speaking, and up until now, that required a lot of planes. My carbon footprint was ridiculous and no amount of tree planting made up for it. But today I can’t travel, so I get to ask myself what I want to do instead. And I’ve chosen to start building online courses and creating videos for people to watch from the comfort of their offices or homes. I’ll reach more people, it aligns much more with my values, and it’s better for the planet.
Before this, I was on autopilot. Today, Covid has forced me into a situation where I have had to change – and I’ve chosen to align my behaviour and my purpose.
Next year, my carbon footprint will be lower, as will the amount of money I will have given to airlines, taxi companies, hotels and restaurants. While hopefully, the impact I’m having on the world will be greater.
That’s the power of a crisis. It gets you closer to what really matters.
I don’t do predictions, but when the dust settles around this crisis and a new normal emerges, I do hope that word why will have a whole new level of importance in business, and that firms who refuse to see the purpose of purpose will be fewer and farther between.
Are you seeing companies embracing purpose as a way to deal with crisis? Or maybe you are seeing the opposite. Email me, share your experience and join the conversation: firstname.lastname@example.org