Purpose is the buzzword of 2019, but leaning in too quickly poses significant risks

There was one word on every CCO’s lips at the recent 2019 Page Spring Seminar: Purpose.

Companies across almost every industry have embraced corporate purpose as the key to attracting and retaining talent, gaining a competitive edge and driving innovation and growth. Increasingly the C-suite recognizes the value of a strong corporate purpose and uses it as their North Star to guide decision making on critical issues that impact their employees, customers, communities and investors.

A recent example of this was Salesforce’s decision to ban retailers that sell certain guns and ammunition from using its sales management software. Discussing the decision at the Fortune’s CEO Initiative in early June, Saleforce’s CEO Marc Benioff said the decision was not about his personal views (although he has been a vocal advocate for gun control in the past) but rather about meeting the expectations of his employees and customers.

Younger generations “want to be in an environment and business that’s about purpose”

They want to “make sure the company they’re in is committed to improving the state of the world,” stated Benioff.

Benioff is certainly at the forefront of leading a purpose-driven organization. But leaning into your corporate purpose is also fraught with potential risk. Brands that have jumped on the purpose bandwagon to leverage societal issues as a marketing ploy without conducting the proper due diligence to ensure they have the authority, credibility and authenticity to take a stand have tumbled instead.

The resulting purpose-washing is real, and it has significant, far-reaching impacts on brand reputation and sales

Following the launch of its “Toxic Masculinity” campaign earlier this year, Gillette has continued to lean into societal issues despite the backlash. The company celebrated Pride Month by launching a new ad featuring a father teaching his trans son to shave for the first time.  It’s a thoughtful and emotional campaign, but does Gillette really have the credibility to be beacon for gender equality?  A cursory look at Gillette’s business practices revealed that company still employs a “pink tax,” where products advertised towards women cost more than similar products marketed towards men.  Additionally, the company offers four months of maternity leave for women, yet they only 6 weeks for new fathers.  For Gillette to truly stand for gender equality it needs to ensure that its business and employee practices are aligned to this purpose.

While Gillette—admittedly through its own earnings calls—is thinking more about the long game than the immediate issues raised about its campaigns, in order for the company to truly stand for gender equality it needs to ensure that its business and employee practices are aligned to this purpose.

To help understand these risks before they create a firestorm, CCOs should put their brand through a purpose stress-test to assess how and when to take a stand on societal issues

This deep assessment needs to include all key functional areas of the business and asking the tough questions of its leaders and processes:

  • Are you “walking the walk” in terms of your corporate policies and programs?
  • Do your CSR efforts reflect your purpose?
  • Do all of your sponsorships and marketing programs align with your purpose?
  • Do you have investments in stocks and bonds of problematic companies or countries?
  • What does your supply chain look like, e.g. offshore businesses and business partnerships?
  • Does the makeup of your board reflect the values you are professing (e.g., D&I)?
  • Are there any executives with “skeletons in the closet” that need to be considered?

Only after asking these tough questions across the organization (beyond the marketing team), can brands make a truly informed decision as to whether or not to take a stand on a societal issue

Brands do not need to be on the right side of these questions 100 percent of the time for its purpose to be real. In fact, recognizing where there is work to do and offering a roadmap to solving deficiencies adds to brand authenticity. No company is perfect, so recognizing weaknesses and laying a plan to address them can go a long way to gaining the trust of customers and employees.

As the race for the 2020 Election heats up, so will discussion and debate around societal issues. Before weighing in, brands must stress test their purpose, or risk being labeled as purpose-washing.

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Jackie Kolek

Jackie Kolek

Jackie Kolek is Partner & General Manager at Peppercomm.

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