As presented by Rosie Warin, CEO of Kin&Co to open the Conference Board of Canada’s Business Un-usual Conference; how to profit from purpose.
Business as usual is no longer an option. Embedding a purpose beyond profit into your business is not only the right thing to do, it also makes financial sense too. But don’t just take our word for it, the stats are there to prove it. This blog post highlights some of the key statistics showing the benefits of a fully embedded purpose, as well as providing some useful links to help you go out and explore more for yourself.
Purpose; your best employee engagement tool
Studies have suggested that when business takes purpose seriously it can help it attract better employees and empower them to work better and more creatively.
- Organizations in which employees are primarily motivated by shared values and a commitment to a mission and purpose are nine times more likely to have high customer satisfaction (LRN)
- Evidence shows that when an employee feels their own values overlap with their employer’s, when they feel they have a shared sense of purpose, then they have a far higher engagement with their work (BITC toolkit)
- An engaged workforce results not just in lower rates of turnover, but in greater productivity, with a 2009 study finding that highly engaged employees achieve 43% more revenue, 12% higher customer advocacy, 18% higher productivity and up to four times greater financial performance.
AND, the key to mopping up the best, young talent out there
- In Deloitte’s 2015 survey of millennials, 60% stated that they joined their current employer because of the organisation’s sense of purpose.
- Kin & Co’s own research last year found that 78% of millennials only wanted to work for an organisation with purpose and 69% would leave their company for a similar one that was more purpose driven.
- In a survey by the Cranfield School of Management 88% of CEOs and 90% of MSc and MBA students stated that a business must have a clear purpose beyond profit to attract the next generation of talent.
OK, that’s great, but what’s the ROI?
Aside from the financial benefits of increased productivity and staff retention; having (and importantly embedding) a purpose can positively impact the bottom line more broadly too – here’s just a snapshot of our favourite statistics:
- Purposeful brands outperform the stock market by 133% . ‘Meaningful brands’ have a 46% higher wallet share than other brands [Meaningful brands; Havas Media, 2015]
- An EY, Harvard Business School and Beaconfield Institute Study (2015) found that 58% of companies with a clearly articulated and understood purpose experienced growth of +10%, as opposed to 42% of companies not prioritising purpose
- BrandHealth Survey: – 1-in-2 consumers will pay more for a brand that supports a cause which is important to them, while 40% have abandoned or rejected a brand because of its behaviour or values.
- A recent study from the Swiss business school the IMD, looked at a return on investment for global businesses over a five-year period and concluded that “a strong corporate purpose beyond profit can impact financial performance by up to 17%”.
- Last year Unilever measured the success of its ‘Sustainable Living’ brands against the rest of its products and found that they grew at twice the rate of the rest of the business and accounted for 60% of company growth.
Living your purpose – why it matters
Think you’re ready to be purpose-driven? Take heed, it’s not an easy or speedy process. Just having a purpose statement isn’t enough – it can’t be seen as tokenistic or unauthentic or you’ll lose the trust of customers and employees. In order to achieve the benefits listed above, it needs to be properly embedded through your culture and operations – you need to be living and breathing it in everything you do.
- The IMD study mentioned above states that in order to reap the financial benefits of purpose, the company must integrate purpose into strategy and operations.
- Employees who say their organizational purpose is “known and understood” are 51x more likely to be fully engaged than those that don’t (Modern Survey).
- A 10% improvement in employees’ connection with the mission or purpose of their organization would result in a 12.7% reduction in safety incidents, an 8.1% decrease in turnover, and a 4.4% increase in profitability (Gallup)
- A strong and well-communicated purpose can improve financial performance by up to 17% [Corporate Purpose Impact; Survey, Burson-Marsteller & IMD (2010) p.10]
- 97 percent of companies that deeply integrate a broader sense of purpose into their DNA report a good or great deal of incremental value from doing so. From building customer loyalty to preserving brand value and reputation and the ability to develop new and innovative products, embedding purpose across activities allows companies to remain competitive and continue to generate value even in a less-than-ideal economic climate. [EY, 2017]
Seeing the benefits of purpose is about embedding it within every aspect of how your business works, influencing every decision no matter how small. If you take it seriously and engage with making purpose a fundamental part of what you do then you stand to flourish.
We’ll be releasing new research on the importance of living your purpose – and importantly how you go about it – later this year. If you’d like further information about the business case for purpose or would like to join our mailing list for further updates, please contact Rosie Warin on firstname.lastname@example.org.