Consumers Aren't Fooled When CSR Is Packaged as Purpose
Purpose is not corporate social responsibility. But you wouldn't know it these days as many companies, in their rush to embrace purpose, erroneously do so by cutting checks to charities unrelated to their business interests. In short, they simply rename CSR, and that's not purpose. These organizations aren't doing themselves any favors nor are they fooling today's consumer, who demands that brands go beyond selling goods and services and stand for something.
Truly purpose-based brands don't need to focus on what's been classically called CSR. Their purpose is so deeply ingrained in their culture and business practices that their behaviors both build business and help others while occurring naturally and authentically.
Take Walgreens. Through its "Get a Shot, Give a Shot" program, which provides life-saving vaccinations to children in need globally every time it administers a flu shot, the drugstore chain transformed a commodity product into a powerful purpose-driven movement that simultaneously built its business and helped others.
When Walgreens launched the program in 2013, it administered 1.7 million more flu shots than the previous year's same quarter. The program isn't an "expense," but rather a smart, profitable business move that's aligned with its core purpose of championing everyone's right to be happy and healthy.
By contrast, when ExxonMobil cuts a check to its foundation to help promote, "global health, education and economic opportunity," there's nothing about that action that links to its core business as an energy company, and it likely derives little consumer empathy as a result. It's CSR intended for political leverage and corporate goodwill, but proudly touted as "purpose."
Misrepresenting CSR as purpose isn't illegal, immoral or illogical, but beware the company that aspires to garner the rewards of being purpose-based -- better financial performance, more engaged employees, the ability to weather difficult market shifts, etc. -- by simply relabeling CSR. All parties will ultimately and most likely be disappointed with the results.
Here's why purpose is important to building brands:
It's a critical decision-making tool. It doesn't necessarily make decisions easy, but it does make them clear. Southwest Airlines' purpose, to give people the freedom to fly, helped it resist the urge to charge for bags during the 2008 recession and enabled its "Bags Fly Free" initiative to add $800 million in annual revenue by stealing market share while some competitors fell into Chapter 11 or were forced to merge.
Or take brands like Walmart and Uber. Both are polarizing, yet they are successful organizations that relentlessly filter business decisions through their purpose: Walmart saves people money so they can live better; Uber enables mobility in the sharing economy.
This doesn't mean everyone likes the decisions Walmart makes to keep prices low or Uber makes to break into new markets biased to the transportation status quo. But because they are purpose-based, they can survive, even thrive, with that tension.
Purpose wins millennials. They're already the dominant consumer cohort and will soon become the leaders of corporate America. If nothing else, this generation has been clear about what it values in its professional and consumer life: Authenticity, clarity of purpose and value beyond the transaction. Brands that deliver on these values through products, services and behaviors will thrive with this generation. For those that don't, exposure or extinction is only a matter of time.
It could save your job. Corporate boards, C-suites and other stakeholders are rapidly becoming dialed in to the performance benefits of having an authentic purpose and using that to align good deeds with good business. This awareness is at a tipping point, going from "nice to have" to "must have." So, how can you identify your organization's purpose?
Remember that purpose isn't something you create; it's discovered from an organization's DNA. Fundamentally, most organizations know what they do and how they do it. Purpose is the why: Why does your organization exist?
Thanks to business consultant and author Jim Collins, there is also this exercise: If you can answer these three questions with the same fundamental thought, you've essentially articulated your core purpose.
What is your organization best in the world at? (What is your expertise?)
What drives your economic engine? (How do you make money?)
What are you passionate about? (What gets your employees up in the morning, beyond making a paycheck?)
Once you've identified your core purpose, here are the steps you should take.
Create a clear purpose statement. This is harder than it sounds. Take the time to make it as short as possible. Avoid "and" and subordinate clauses. It should be one simple, declarative sentence.
Don't just say, act. Purpose is not a presentation slide. It should ultimately be ingrained in your culture and practiced daily -- in the initiatives you get behind, who you hire and fire and what partners you work with. The more it's practiced, the more authentic and effective it will become.
In the end, consumers, corporate stakeholders and prospective employees judge brands on their actions, not labels. So if you're a brand without purpose or confusing yours with CSR, now is the time to define it and act on it before you're lost in the shuffle of directionless followers.
J.B. Raftus is chief marketing officer at GSD&M, which counts Southwest and Walgreens as clients.