5 things we've found to be true

Over the last 12 months, we’ve been privileged to work with smart, passionate people in ambitious companies. We’ve challenged them. And  they’ve pushed us, tested us and made us reassess what we thought we knew. We’ve been reflecting on the key lessons that we’ve taken from these projects – some pretty obvious, others quite surprising.

1. BIG IMPACT COMES FROM BIG COMPANIES

Unilever’s Lifebuoy shows how sustained commitment to social purpose can drive massive growth.

On all our client engagements, we’ve made a point of learning from disruptive new entrants and innovative start-ups. But to really want to make a big difference, work with a big business.  Large organisations touch the lives of millions, sometimes billions, of people every day. They are well placed to address the important issues facing society. And their business benefits from social advancement, economic growth and resource conservation. What’s more, they are supremely skilled at scaling great ideas, influencing behaviour and convening others for change.

 

2. CONNECTING TO SOCIETY DRIVES GROWTH

Kering, and its brands including Gucci, Puma and Stella McCartney, have systematically invested in less harmful processes to reap environmental and commercial benefits.

From BMW and BASF to Infosys and IBM, companies that connect with society and the wider world at the core of their business model outperform their peers over the long-term. Big business operates with the permission of society, not in a bubble. So aligning value-creation with societal, environmental and economic contribution makes intuitive sense. And the results speak volumes. Lifebuoy promotes regular hand washing which saves millions of lives and creates a multi-million-dollar business. Gucci’s leather tanning process drives out heavy metals and reduces risk for the whole industry.

 

3. PURPOSE VS. PROFIT IS A MYTH

Unilever has mapped the impact that its ‘sustainable living brands’ have on top line and bottom line.

Day-to-day business has the potential to both generate significant profits and make a big impact. This is where real value and long term growth lie. Purpose-driven brands account for half of Unilever’s growth and are growing at double the rate of the rest of the business. (Unilever, 2015) And companies that properly harness purpose outperform their peers by 20% (McKinsey & Co, 2015). In today’s world, purpose and profit are inextricably linked.

 

4. ‘CSR’ MISSES THE MARK

How not to do it: this image from Guardian Sustainable Business uses outdated cliché which limits the appeal of sustainability to business leaders.

First we had philanthropy (doing good), then Corporate Social Responsibility – CSR –  (offsetting bad). But this is no longer enough. At best, CSR is a bolt-on. At worst, it’s a smokescreen. Even when it’s well-funded, the traditional notion of CSR is often out of touch with the business, focuses too much on limiting the downside, and does not drive value-creation.

We’re now entering the third wave of sustainability (creating value). This requires joining the dots between strategy (how a company creates value), purpose (why it exists) and societal impact (how it connects to the wider world). Doing this is not straightforward but, as leading companies are finding, it is valuable. Indeed, for leaders, this is their business model.

 

5. GOOD WORDS MAXIMISE GOOD ACTIONS

Kenco’s Coffee vs. Gangs campaign gives compelling voice to its work in directing young people away from gangs into jobs in coffee growing.

In today’s ultra-connected, hyper-transparent world, spin doesn’t work and actions must match expectations.  But, without a powerful authentic voice, impact is limited.  For businesses to truly harness the power of purpose, they must stand out, speak up and engage.

McKinsey & Co. estimate that 30% of profit can be attributed to radical and authentic engagement. It helps drive the agenda and deliver on commitments as well as creating energy to drive change.