Having a ‘social purpose’ isn’t just wrong — it’s bad for business

Jeff Melnyk
The Startup

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Being Canadian, I don’t lose my temper often. We are polite folk, more likely to apologise for saying sorry than to find ourselves criticising others. But I’ve been in California for three weeks, and perhaps that’s influenced my mood. The scourge of the business world has hit the West Coast, threatening to infect boardrooms all the way from Silicon Valley to Vancouver. Having watched this phenomenon spread like wildfire in Europe, I suppose it was only time that it made its way across the pond. And it is making me angry.

The problem is “social purpose” — and the seductive siren’s call is coming for your marketing director.

Championed by brand and advertising agencies, social purpose is your saviour. It will herald in a fresh wave of connection to consumers — proving that you are compassionate to your customers and their communities. Your reputation will be de-tarnished, your halo reinstated, your people reinvigorated. You care.

Watch out — because “social purpose” is the new greenwash, similar to companies who use campaigns to show they are helping save the planet to boost their image. It is a rebrand of a brand promise, with a CSR twist. It takes the importance of the idea of purpose and combines it with philanthropy in an attempt to create a halo for your brand.

Social purpose is a repositioning exercise that is costing brands big, and confusing business leaders, who are desperate to maintain their competitive edge and differentiate themselves in an increasingly crowded market.

Full disclosure: my partnership helps leaders find purpose and grow. We have worked with some of today’s biggest brands, and some of the most exciting start ups, as well as SMEs who want to leverage their culture to help them scale. We believe in the purity of purpose — an enduring North Star that guides your vision of growth. We work with leaders to understand why their business exists, and how that intention can give them something solid to lead from as they navigate the complexity of a growing business. We help them align their purpose to their values and their offer to the world, so that they show up to their stakeholders in a truly authentic way.

We believe that all purpose-led and values-driven brands create social impact. They do so because purpose demonstrates that your business serves a need for people — that you have a role in solving a problem for others, and that you create an impact in people’s lives. So to have a “purpose” AND a “social purpose” makes very little sense. Businesses that know their purpose, and get their purpose right, know that they are helping society. If your purpose is correctly articulated, and used strategically in your business, you will be positively impacting people’s lives while you grow.

A good business doesn’t need to do anything to be socially responsible. When it creates value for its major stakeholders, it is acting in a socially responsible way. Conscious businesses believe that creating value for all their stakeholders is intrinsic to the success of their business, and they consider communities and the environment to be important stakeholders.

— John Mackey, Whole Foods

Here’s four reasons why a quest for “social purpose” will harm your business:

Social purpose is a distraction

Having a social purpose, in addition to a mission or a purpose, is a mess. Your purpose keeps you focussed on what is most important, and the role you play in people’s lives. It helps you to strategically navigate an ever changing market.

When a company truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability. Purpose guides culture, provides a framework for consistent decision-making, and, ultimately, helps sustain long-term financial returns for the shareholders of your company.

Larry Fink, Blackrock

Purpose is not a brand equity campaign — it is the fundamental reason why your business exists in the world.

We have too many examples of brands that have tried to position themselves as “good for the world” only to fail to live up to promises, because their product was not authentic. You cannot claim to impact society if your purpose has no relation to what you sell.

BP’s infamous “Beyond Petroleum” rebrand tragedy, by agency Ogilvy & Mather in 2000, would no doubt today be considered as a launch of a new “purpose” (though it doesn’t pass Within’s principles). The objective was to position BP as an environmental crusader and highlight the company’s “commitment” to renewable energy, at a time when the vast majority of its investments and revenue stemmed from carbon intensive oil and gas, much of which spilled into the Gulf of Mexico in 2010.

Social projects are CSR initiatives unless they are baked into your business model and reflective of your product. TOMS “One for One” ensures a pair of shoes is given for every pair purchased. They do the same for eyewear, and support water projects via their TOMS coffee. “One for One” helps TOMS innovate and move into new opportunities, proving that the idea is core to their business model. Very different to Pamper’s “one pack, one vaccine”, which is a cause-related marketing campaign designed to manipulate purchase.

Our client, MiiR, has closely aligned their “Product to Project” model with the idea that what we enjoy in their high quality mugs — from water to coffee and beer — relies on clean water, a healthy environment and strong communities. They don’t need a social purpose — their business is focussed on the design of premium goods, and their support of sustainability projects is strategically chosen in alignment with their product. As MiiR grows this model will help them to innovate their product offer as well as the social impacts that they and their customers are passionate about.

Purpose must help you grow all aspects of your business — not just connection to a target consumer through marketing.

Social purpose is lying to consumers

The myth is that social purpose creates connection. But consumers aren’t stupid — they know your purpose isn’t to save the world, and that your business makes money off of them buying your product. An authentic purpose demonstrates the impact your business makes on people’s lives. That impact should be in direct relation to the value proposition of your current product or service, and any future offer as you pivot to serve the market.

I recently spotted a comment on LinkedIn by a brand strategist for a major agency calling the Nike ad featuring Colin Kaepernick a “purpose play”. I’m not exactly sure where that ridiculous term came from; their post seemed to suggest that Nike exists to take a political stance on social inequality and racism, rather than exist to be a retailer selling sports gear.

Television advertising isn’t purpose. Nike’s ad was a prime time attempt to get your attention. Remember that Kaepernick was left unsigned by NFL teams and unused by Nike for a year due to his political activism, during which time Nike almost dropped him as one of their endorsements. An athlete shunned by the NFL and the US President, Kaepernick was deemed too controversial by most. Nike needed to choose the right moment to capitalise on his endorsement contract or potentially face litigation for breaching his contract.

Nike’s purpose is not social activism and the company was not created to take a stand on issues. Their purpose is to “bring inspiration and innovation to every athlete in the world”. Their growth goal is to “deliver innovation, at speed, through more direct connections.” The Kaepernick ad was designed to gain credibility with “the young, urban market it has long targeted.” Nike doesn’t need a social purpose; inspiring all of us to be athletes is purposeful enough. But let’s be clear that their advertising is created to get your attention, not get you kneeling at the national anthem. In their follow up earnings call, CEO Mark Parker spoke proudly of record consumer engagement — not increased awareness of social equity or political change.

The Gilette backlash is another obvious recent example and represents a trend in FMCG companies looking to cash in on social causes and make their brands stand out in an increasingly competitive marketplace.

Purpose must be authentic to you — not created by ad agencies to drive sales.

Social purpose is manipulating your employees

The myth: social purpose will improve employee engagement, because employees want to work for (and thus will be more devoted to) an employer that cares about social causes. Leaders that believe they can make their Millennial employees work harder through CSR initiatives are operating in the old paradigm.

In fact, what Millennials — and everyone else on your team — wants most is the chance to do work that creates impact for the business, not campaign for charity. They want to give their talents in a place that solves real problems. And they want to develop those talents for an employer that champions their growth.

I believe the most important social impact any business can have is how it operates to create an empowering and equitable environment for its people. A place where people love who they are and what they do. One that encourages freedom and connection, rather than servitude and competition. Imagine the impact on society if all employers supported their employees to live their dreams by doing meaningful, valuable work.

For Nike to have credibility taking a stand in the equality debate they need to clean up their own operations — a New York Times investigation found “a long history of female employees being iced out of key roles and subjected to inappropriate behavior by supervisors.” Living our values to create places of belonging and growth for our employees is critical to being a 21st century business.

Our client British Land has made a considered effort to shift its workplace in line with its purpose of “creating places people prefer”. Having a 21st century workplace that champions diversity isn’t just in line with its values — it’s smart thinking for a FTSE100 company. To stay on top it’s going to need to attract the best and most diverse talent, representative of the communities it serves, who want to work collaboratively. British Land doesn’t need a social purpose for this — it must focus on creating a place where people prefer to work.

Purpose is our passion. It’s why we come to work and deliver our talents in service of others — not how we give back to communities in need.

Social purpose requires the wrong business metrics

Business leaders need dashboards to help them know how to unleash the potential of their teams. The majority of measurement in business is not fit for purpose. Leaders press for outcomes rather than understanding what key results are needed for growth.

Social impact measures are flawed if their only purpose is to drive sales. Businesses often struggle to link impact to business value. When I worked with Mondelez International on their Coffee Made Happy programme we established very specific KPIs, guided by experts in the field, to demonstrate how social cohesion and economic growth in coffee farming communities could support an increase in productivity of beans in key areas. The quality and volume of beans produced was critical not only for the business but for the farmer and their families.

Robust environmental measures are critical because all 21st century businesses must understand how their operations impact on the environment, from carbon emissions to waste and resource use. And business must have an intimate knowledge of how their operations are effecting local communities. But these measurements are not measuring purpose — its part of understanding the sustainability of your product and service offer. Sustainability measures are becoming business as usual, in the same way that every company must have a profit and loss account and a balance sheet.

Purpose is an intention, and that is difficult to measure. What we can measure is our performance; the quality of how we deliver, and the progress towards our vision of growth. Everyone in your team must see the value they create for the business. OKRs, when used properly, are the best way for each individual to see their contribution to business success. They effectively map back what each of us do every day in order to drive growth.

All businesses should have a high level OKR that looks at the impact their product or service is creating in the lives of their customers in order to understand the value everyone is creating.

Purpose is measured through the value we create for the people we serve — not through the sustainability metrics of our business operations.

Finding your authentic purpose is essential for every business.

Within’s Guide to Finding Purpose is a resource that aims to help you get your purpose right. And if you are short on time, there’s a one minute film to give you some top tips.

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Jeff Melnyk
The Startup

Brand strategist, retired music producer, and exec coach for CEOs around the world. Fellow of the RSA. Founding partner of Within People. withinpeople.com