The days of brutal capitalism are over. Today, capitalism must have a human face. Companies are no longer to run for profits alone; they have to identify and solve society’s problems as well or risk a backlash from its stakeholders. Short-term flash-in-the-pan support for causes which stakeholders, hitherto, took as acceptable solutions for societal issues are no longer the options. They have become museum pieces. Today, businesses must take the driver’s seat in identifying and proffering solutions to social and environmental challenges facing our world. They are expected to play a key role in fighting climate change and in achieving United Nation’s Sustainable Development Goals (SDGs). Embracing social purpose is not a matter of choice for companies. It is a business imperative.
But becoming purpose-driven is not an easy task. It requires a fundamental shift in the way a company operates. Interestingly, most business leaders look up to PR and Communication professionals to help them explore, understand and surmount the challenges inherent in the change process. They also rely on them to communicate social purpose in a way that sinks favourably with their stakeholders and motivate them to support the initiative.
Unfortunately, most PR professionals are yet to understand what social purpose is all about, how it works in practice let alone how to integrate its philosophy into the strategy and culture of a company. This article takes you on a journey of discovery to what social purpose really is, its roots and the key facts that PR professionals should know in order to communicate it effectively within a company and with its external stakeholders.
What Social Purpose Is Not
Perhaps, the first step to take when trying to understand a new idea such as social purpose is to first identify what it is not but looks like it. My research on the subject reveals that some PR professionals confuse it with corporate social responsibility and sustainability, and even use the terms interchangeably. This is a recipe for failure in identifying the right stakeholders, developing effective PR strategies and selecting the right media and techniques to move the needle of a social purpose campaign in the desired direction.
Corporate Social Responsibility; or CSR for short, is concerned with actions that are ethical and in good taste. It includes discretional donations and support for causes that are meant to alleviate the pains of the community where a company operates. Compliance with environmental standards, obedience of the laws of the land and observance of human rights are also key aspects of it.
The problem with CSR is that it is often discretional, and done as an addition to a company’s activities. It has also been abused by companies that use social issues for advertising campaigns and disguise deadly products with claims of responsibility as was the case with Volkswagen in 2015.The company was discovered to have deliberately designed a means to hide carbon emission from its cars in a desperate move to show the world how environmentally friendly it was. The damage such actions have done to public trust of companies’ CSR initiatives remains very deep. Some scholars believe CSR has lost its steam and gone defunct.
Sustainability, on the other hand, is the ability of a company to continue to be in business while at the same time ensuring that the future of our planet is not jeopardized by its actions. It emphasizes high ethical and environmental standards in business practices, and also emphasizes economic performance, to ensure a company remains a going concern and creates a long-term value for stakeholders.
The problem with sustainability is that it is often managed as an add-on activity just like CSR. It is therefore not often taken seriously. And for the most part, it is used as a tool for managing corporate risks, enhancing corporate reputation and increasing sales.
Regrettably, Sustainability has become associated with greenwashing which Magali Delmas and Vanessa C. Burbano define in their 2011 article, The Drivers of Greenwashing as “the act of misleading consumers regarding the environmental practices of an organization (firm-level greenwashing) or environmental benefits of a product or service (product-level green-washing)”.
Volkswagen “clean diesel engine” claims was a clear case of greenwashing. Mercedes Benz was caught doing almost the same thing with its BlueTech vehicles which it marketed as “clean diesel” and “earth friendly”, and was reported to actually release nitrogen oxides at levels more than 65 times higher than what EPA allows.
Nestle has also been accused of greenwashing for its claim of “sustainably sourced Cocoa beans” because the production of the key ingredients of its cocoa products is said to drive massive deforestation in West Africa.
Although CSR and sustainability may bring some benefits to society, they are not the same as social purpose. Social purpose is a new idea that meets the demands of business in the 21st Century.
What Is Social Purpose?
Social purpose is the benefits that a company brings to society, woven into its processes and culture and placed at the heart of its brand and corporate strategy. It constitutes the DNA of a company, clarifying what it stands for and acting as a guide on the kind of experiences it delivers to stakeholders. It is a new way of doing business that integrates profit-making with the provision of social good in a seamless manner.
If CSR and Sustainability are about rallying behind a cause, social purpose is about standing up for a cause. It is about a company accommodating a cause or a social issue that aligns with its core business activities as its reason for being and contributing to positive changes in the society in that area.
Put simply, social purpose is served when a company identifies a unique social issue that aligns with its core activities, weaves it into its brand and corporate strategy, and delivers it in a way that generates benefits to society and enhances its profits.
When A Social Issue Is Fit For Purpose
Not all social issues are fit for purpose. A purposeful issue is one that addresses the needs of customers and other stakeholders, draws heavily from a company’s expertise, relates to its products and services and connects with its beliefs and values.
For example, a food and beverage company is expected to address issues such as obesity and nutrition. They relate to its business and they are of serious concern to its customers and society. And a financial service firm can provide solutions to the issue of wealth inequality while an energy company can do something about climate change given the nature of its operations. Picking a social issue that does not align with a company’s core business makes the company look inauthentic.
The Unilever Example
Unilever is acknowledged a gold standard in developing and implementing a purpose-led strategy that relates to its core business and addresses the concerns of its stakeholders. In 2010, it launched a project known as The Sustainable Living Plan with goals that include helping more than a billion people improve their hygiene and living conditions, reducing the impact of Unilever’s operations on the environment and promoting gender parity in its factories. It tries to achieve these goals by distributing its health and hygiene products to remote communities, reducing packaging, factory and water wastes, and making these issues an integral part of its operations.
The initiative aims at protecting the future of its business by protecting the planet and its people. The company recognizes the fact that business can only thrive in an environment where people thrive.
The Roots of Social Purpose
You may call it the next stage of human civilization as David Reed did in his article published in the Medium. Or you may see it as the new yardstick for measuring the success of a company in the 21st Century. One thing is certain: social purpose is not a revolutionary idea. Rather, it is the latest evolution of several ideas before it that called on businesses to make meaningful contributions to society from where it draws its resources for survival and growth. It has its roots in a number of past ideas and movements such as Corporate Philanthropy, Corporate Social Responsibility, the Triple Bottom-line, Corporate Citizenship, the Shared Value concept, Sustainability, and a host of others.
As our society faces a myriad of complex and wicked problems such as climate change, wealth inequality and terrorism, people are demanding more than just transactional or product/service-based relationships from businesses. They expect them to stand up for, and contribute to, resolving issues that matter to them. These other movements gave way to social purpose which is considered to be the best approach to doing these.
The Voices For Social Purpose
Social purpose is not some floundering worldview canvassed by academics who are not in touch with reality. It has gained momentum in the business world. Stakeholders, from employees to investors, are demanding that businesses identify and articulate a purpose that goes beyond profit.
A PWC Report, titled; Millennials At Work: Reshaping the Workplace, reveals that millennials want their work to have a purpose, to contribute to the world. Little wonder 50% of them are ready to take a pay cut to work with such organizations, according to the Deloitte Millennial Survey.
Interestingly, consumers are the ones making the loudest call for social purpose. A research by the Economist Group reveals that 77% of consumers would prefer to purchase products from a company that operates with a social purpose. And 66% say they would switch from a product they typically buy to a new one from a purpose-driven company as revealed by the 2018 Cone/Porter Novelli Purpose study.
Surprisingly, investors whom many think would be more interested in companies maximizing shareholders value are not silent about social purpose. In their research paper, The Investor Revolution, published in Harvard Business Review, Robert G Eccles and Svetlana Klimenko reveal that Environmental, Social and Governance (ESG) issues are almost universally top of mind for executives of global institutional investing firms, including the world’s three biggest asset managers, BlackRock, Vanguard and State Street.
The paper also reveals that in 2006, when United Nation backed Principles for Responsible Investment (PRI) was launched, 63 investment companies (asset owners, asset managers and service providers) with USD6.5 trillion in Assets Under Management (AUM) signed a commitment to incorporate ESG issues into their investment decisions. But by April 2018, the number of signatories had grown to 1,715 representing USD81.7 trillion in Asset Under Management. This is a clear indication of investors’ big support for social purpose.
Seven Social Purpose Facts For PR Professionals
Developing PR strategies and communicating social purpose effectively within an organization and with key external stakeholders can be a very tricky business for PR professionals. We are trained to deal with commercial, government and non-governmental organizations, not companies integrating social good with business. Nevertheless, it is possible to succeed with Social purpose. Here are seven key facts I believe can help you do a great job:
- It is the responsibility of PR Leaders to place social purpose at the heart of an organization’s strategy and decisions
Don’t wait for marketing or HR. They may not understand the implications of not embracing social purpose. Draw the attention of your top management to the gains and guide them on how to implement it.
This calls for extensive knowledge and understanding of the best practices in social purpose. This article is meant to be a guide and therefore is in no place to give you all the knowledge you need. Research and monitor developments and practices of competitors and come up with the best strategy for your organization.
- A company’s social purpose is best discovered, not invested
It could be tempting for PR Leaders to think that they can work with top management, create a task force or hire a consultant to come up a purpose statement to guide actions in implementing social purpose in an organization. That amounts to inventing a social purpose. It cannot work.
The nature of a business and its core beliefs and values are what define what its social purpose should be or what social issue should be integral to its strategy as its reason for being.
Recognize the fact that every staff wants to satisfy a higher purpose. For most people, who are disappointed by organized religion, their work is their spiritual practice. Purpose is what gives their work the moral and spiritual flavor they need. So, question the workforce and work together to discover what best satisfies their needs.
- Social Purpose cannot stick if it doesn’t permeate the culture of a company
Every staff should be able to connect it to their day to day task. And words and actions of both managers and leaders should reflect it. It should become the way of life of everyone in the company.
Developing a culture of purpose begins with finding creative ways to stimulate discussions about social purpose. Start with the top management, then identify and train purpose champions to spread the word.
- Social Purpose Messages stick only when they are as constant as the North Star
A message that is not constantly communicated gets forgotten, and people fall back to their old ways. Inculcating social purpose ideals within an organization requires continuous, ongoing communication. Internal education is key to developing a purpose mindset among employees.
Several studies have shown the best tool for engaging with customers and other stakeholders on social issues is the social media. The reason: it has the ability to promote genuine discussion and dialogue.
- Investors require information on how social purpose contributes to financial performance
That investors have embraced social purpose does not diminish their interest in profits. Some studies reveal that they are concerned about how ESG performance leads to financial performance. What has changed is the way they think about profit. The new thinking is that it should flow from the barrel of a broader purpose that captures society’s concerns and issues. They are conscious of the fact that the health of a business is determined by the health of the society.
- The right way for a company to take a stand on a social issue is to ensure it aligns with its reason for being
Several studies have shown that stakeholders expect companies to take a stand on hot button issues and contribute to resolving them. This has prompted some companies to take advantage of social issues that resonate with their customers in a bid to connect with them at the emotional level and make more sales. Most of them get their fingers burnt.
That was the case with Pepsi in 2017 when its social issue ad posted on YouTube got a backlash from its customers and other stakeholders so much so that it had to pull it down.
The ad showed Kendall Jenner, a celebrity model, abandoning a photo shoot to join a protest. On getting there, she walks straight to the police line and hands over a can of Pepsi Cola to a Police officer. The action prompted cheers from the protesters and the tension went down.
Pepsi said its intention was to project a global message of unity, peace and understanding but what it got was the ire of stakeholders because the brand is not known to stand for such ideals. It was accused of exploiting social justice movement to increase sales.
Airbnb’s case was different when it took a stand against Donald Trump’s order to temporarily close America’s border to refugees through a social issue ad during Super Bowl. The ad called “We Accept” showed people of different nationalities along with the words, “We believe no matter who you are, where you’re from, who you love or who you worship, we all belong. The world is more beautiful the more we accept.”
Instead of a backlash, it became one of the most appreciated and talked about Super Bowl ads largely because Airbnb has always stood for unity and diversity. The company is known for promoting unity and diversity for years. Its tagline “Belong Anywhere” says it all.
- The social issues a company can solve or contribute to solving are captured in the United Nations Sustainable Development Goals (SDGs)
You don’t need to do extensive research to find the social issues your company can take a stand on and contribute to solving. Simply go through the 17 SDGs and pick the ones that align with your core business, connect with your core values and relates to your company’s products or services. The greatest challenge facing PR professionals today is how to make an organization stand out in a terribly cluttered marketplace. The solution is to make it stand for something that connects with its stakeholders at the emotional level. Make it serve a social purpose along with its pursuit of financial performance. It guarantees stakeholders’ engagement, talent retention, risk mitigation and, above all, brand differentiation. It behooves the PR professional who desires to remain relevant and make a mark in his career to study, master and make social purpose work in the organization he serves.