In 2006, four years after competing in The Amazing Race, entrepreneur Blake Mycoskie of Arlington, Texas, took a vacation to Argentina. During the visit, he offered to help a volunteer deliver shoes to impoverished children.
The rest, as they say, is history.
Returning to the states, Mycoskie sold his online driver education company for $500,000 to launch a startup selling simple canvas shoes in North America. The kicker? For every pair sold, the company would donate another to a child in the developing world.
After The Los Angeles Times covered the story, the new shoe company, TOMS, took off, selling 10,000 pairs in only the first year.
And that was how yet another business discovered the power of purpose in the modern marketplace.
“In today’s digital world, consumers aren’t making decisions based solely on product selection or price. They’re now assessing what a brand says, what it does, what it stands for.” —Accenture Strategy
Purpose-driven brands for the win.
Though not every company can be an overnight success, the story of TOMS speaks to an increasingly research-backed fact of marketing:
From Certified B Corporations® to 1% for the Planet companies to your favorite skincare brand, firms in 2023 that value making an impact over simply making a profit are gaining a competitive edge.
In fact, companies that do more good (like B Corps, for example) are doing more business, experiencing:
- Faster growth
- More market share
- Greater customer loyalty
- More employee engagement and less turnover
- Better innovation
- In Harvard Business Review’s eight-year study of extremely high-growth companies, purpose was one of four key growth drivers. Companies that make a social or environmental impact, HBR reports, “create new markets, serve broader stakeholder needs and change the rules of the game.”
- In a study of 20,000 consumers by Accenture Strategy, over 60% thought brands should take action on the issues that mattered to them. And over two-thirds of Americans feel such companies care more about them and their families.
- Deloitte found purpose-driven brands capture more market share and grow on average three times faster than their competitors. They also report 30% higher levels of innovation and 49% higher levels of workforce retention.
- According to Gallup, if just 8 out of 10 Americans felt their jobs had meaning, companies could realize a 41% drop in absenteeism, a 50% drop in safety incidents and a 30% increase in quality.
“A purpose-driven approach allows companies to broaden their mission, create a holistic value proposition and deliver lifetime benefits to customers …. Leaders need to think long and hard about how to make purpose central to their strategy.” —Harvard Business Review
Why the ROI?
Gone are the days when consumers judged companies solely by what appeared on store shelves.
The social media savvy, socially conscious consumers of 2023 want more from their chosen brands—including a proactive stance on social and environmental issues.
That consumer preference is one of the reasons Unilever (the 400-brand giant whose portfolio includes household names like Ben & Jerry’s, Dove, Hellmann’s and Vaseline) placed a big bet on what it calls sustainable living—brands that:
- Have a clear purpose and help to tackle a social or environmental issue over time.
- Produce products that reduce environmental footprints and/or improve health and wellbeing or livelihoods.
In a full report titled “Making Purpose Pay,” Unilever found that these brands:
- Accounted for around half of its top 40 performers.
- Generated 60% of company growth.
“Consumers are becoming much more aware of the positive differences brands can make to social and environmental issues, and also the differences they themselves can make through their everyday shopping choices.” —Unilever.
Become a company that gives back.
If conscious capitalism is the way of the future, how can modern companies adapt to capture the benefits? (And change the world?)
According to Accenture Strategy, it starts at the leadership level, with deliberate reflection on questions like:
- “What is our brand promise?”
- “What do our employees and customers want us to stand for?”
- “How can we make the lives of our customers, employees, and suppliers better?”
- “What is the value of doing so? What are the risks?”
From there, the rest is a journey involving commitment, investment and organizational buy-in.
“It is not enough for a brand to just talk about its purpose—consumers expect action too! It takes time to create a significant impact on a social issue, so it is important to get going, keep going and sustain action over a period of time.” —Unilever
Of course, it never hurts to have outside help.
Organizations like Do More Good Movement® out of Lincoln, Nebraska, exist to help businesses succeed in their journey of aligning impact and profit.
The movement has set a goal of witnessing 250,000 shareholder-driven companies operate in the U.S. (and helping them to do so). Alongside other forms of support and coaching, it can help businesses achieve certification as Benefit Corporations, Certified B Corporations®, Conscious Capitalism companies or 1% for the Planet organizations. (TOMS is a Certified B Corporation.)
Attendees to the annual ROI of Why conference sponsored by Do More Good Movement® can network with leaders from top social enterprise firms. They leave with step-by-step action plans to implement successful strategies in their own organizations.
Tickets to the 2023 conference on March 21–22 in Lincoln are available on the Do More Good Movement® website, domoregood.com.