Why Purpose-Driven Companies Need To Embrace Their Positions As Alternatives To The Standard Market Economy Ethic (and what this means for building a more prosperous future, for Purpose-driven companies and the world at large)
Something fundamental is changing in our society.
Itʼs a reversion of sorts, but of the good variation.
Like a pendulum that is coming back to its center. A homeostasis of sorts.
The advent of modern-day advertising and marketing told us we needed to pursue money, status, and personal achievement on our path to a meaningful life. Material excess was flaunted and celebrated. We were programmed to think of ourselves as consumers first. The language of shared value and common prosperity has been stripped from our cultural lexicon, giving rise to a hyper individualistic, consumerist society. As inherently social beings, our natural inclination to consider the collective wellbeing was and continues to be suppressed.
Slowly but surely, more realized they were little more than commoditized objects. Slowly but surely, more are seeking balance, simplicity and healthier lives, seeking greater connection to family and community. More are increasingly basing their lives on their impact on others. More are aware of how their actions have ripple effects in exponential ways. We are gaining a greater understanding that, even in this complex world, everything we do has a consequence. We are starting to understand more clearly what those devastating consequences look like.
We want businesses to help us fulfill this new definition of what it means to be human. (Itʼs not new, it was simply nascent for some time due to cultural and market forces). In times of immense turmoil, people are increasingly turning to brands as island of stability, away from mainstream institutions like the media, government and big business. An overwhelming majority of consumers say they will be loyal to companies helping them fulfill this new definition of meaning.
57% of people are willing to pay more for a product from a Purpose-driven company. Implicit in this statement is that we as consumers are becoming more aware of the true value and costs of activities we carry out, which includes our consumption.
Purpose-driven businesses are clearly not doing a good job, however. 2/3 of
consumers canʼt name a single company that is helping them live a more meaningful, purposeful and connected life.
How can this be? Why is this the case?
Purpose-driven companies generally position their brand around its positive impact for all stakeholders. The problem is, all companies can do the same. (a la “goodwashing”) Purpose-driven branding in this current form can be too easily coopted. Consumers are already inundated with an infinite supply of choices. Without more explicit differentiation, Purpose-driven companies will continue to get lost in the clutter.
Purpose-driven companies are afraid to poke the bear, so to speak. Theyʼre often afraid to explicitly articulate what is different about this alternative mode of business compared to the standard market ethic. As people building Purpose-driven companies, weʼre people proactively thinking about what can be done to transform our societies for the better. Maybe some selection bias comes in here. Weʼre too nice. Weʼre less willing to be explicitly critical. We shouldnʼt be.
We must be more proactive in communicating and differentiating how our companies operate. We must explain in clear language how we play by a different set of rules. We are not confined to the standard market economy ethic. We canʼt be afraid of the inevitable pushback that will come. To grow this movement, we must provide clear differentiation for how we do business. In doing so, consumers will become more enabled to support and take part in the movement.
Consumers will reward us: greater loyalty, more supporters, more meaningful connections, more customers, more pride. Comparative advantage.
We must be real and authentic in this age of information overload and infinite supply. Consumers increasingly see all marketing as “spin.” We arenʼt marketing, in that sense. We are communicating how our companies deliver a more prosperous world and are inviting customers to take part.
The status quo forces want the people to believe there is no alternative to the current system, that this is the best we can do, the best of human ingenuity. But we are saying no. Business can be done differently. There are alternatives, ones based on different rules and incentives.
We must recognize we are all working together as a part of a bigger movement, not just individually acting on our own values but working as a collective to transform expectations and behaviors.
Right now, we must work collectively to start small fires. These small fires will open up the space for others to do more and go further in creating alternative business institutions centered on collective wellbeing. We as Purpose-driven companies have much to offer in doing our part to bring these ideas back into our societies. After all, it is the conditions and market logic under which businesses operate that create the core conditions of our world society.
Ultimately, our impact will be far beyond the realm of business: Our businesses are simply the sparks that inspire others to continue to think creatively on building a better society with different incentives and conditions. We can light the world, if we remain bold.
Alejandro Fenn COO at Jukko