Having the right strategy to communicate your mission is as important as your mission itself
by Janet Andersom artwork by Camille Kachani
Once an organization has established a clear sense of purpose among its employees, how does it go about communicating that to the outside world and how can it show that it means it – that its purpose is authentic?
Talking about purpose in the right way can be critical to success. Research by public relations consultants Burson-Marsteller in Nordic countries in 2014 found that customers in that region are willing to pay a premium for products and services from a company that they view as responsible and that corporate purpose is three times more important than financial performance for corporate reputation overall. Internationally well-known companies like Lego, Carlsberg and Volvo came out high in the survey results.
Burson-Marsteller found that one of the most effective tools for engaging with consumers on these issues – whether it be the company's commitment to social responsibility or the wider impact they have on society and the economy – is social media, because this enables the conversation to go beyond advertising and promotion into genuine discussion and dialogue. Engaging with consumers on the company's values and practices helps build loyalty to its brands.
Customers are not the only stakeholders that it is important to communicate to about purpose. Larry Fink, CEO of New York-based investment firm BlackRock, says that investors, particularly long-term ones, want the opportunity to engage with companies to help foster long-term value.
Indeed, it seems there is a shift away from short-term investment – a shift that Lynn Stout, a professor at Clark Business Law Institute, welcomed. "If you hold your funds for less than two years, you are really just renting your stock instead of owning it – you don't care about long-term sustainability or reputation, you just want the share price to go up as quickly as possible," she said. By contrast, a long-term investment environment in which shareholders hold their shares directly is one in which a shared sense of social and moral purpose can flourish. Corporations can only serve the social purposes we want them to serve if they have the space to look towards long-term projects that provide social benefits.
With "conscious capitalism" on the rise and sustainable investing no longer a niche activity, companies need to work out how to articulate their purpose to shareholders and show that they understand their impact on their community, the environment and society at large.
What does purpose mean to you and your business? Our Think:Act magazine on purpose addresses changing values in the business world. Long-term vision forms the basis for lasting products, inspiring services and iconic companies. The time has come to reinvent corporations.