Business leaders, employees, investors, and communities know the pressure is on: Companies have to operate responsibly. How they do so is the challenge.
Purpose is under pressure.
Last year, we said 2022 would bring a “great reckoning” for corporate purpose—and it did. ESG commitments made headlines and came under fire. Urgency around climate action accelerated as progress failed to cool our planet. Employees shuffled between companies in search of greater meaning, pay, and balance. Twelve months later, we’re left feeling unsettled, but sure of one thing: When a strategy like purpose causes this much tension and change throughout the global economy, it’s for a good reason.
It’s clear that business leaders, employees, investors, and communities know the pressure is on: Companies have to operate responsibly, full stop. How they do so is the challenge. So, we asked members of the Purpose Collaborative, a global network of 42 purpose-driven firms and more than 500 thought leaders and professionals, to share their insights for the year ahead. Here’s what professionals from the U.S., Europe, APAC, and Latin America believe business leaders can expect in 2023.
PEOPLE INCREASINGLY UNDERSTAND THE IMPORTANCE OF SOCIETAL ISSUES
“Citizens express their concerns not only for their own cost-of-living struggles, but for basic human dignity as conflicts and natural disasters push social concerns and human suffering into sharper focus,” said Laurence Evans of Reputation Leaders.
The team at Reputation Leaders recently asked U.S. citizens which issues they would like to see organizations supporting in 2023. While the issue of climate change led as the number one concern for respondents, Evans noted, “climate change is only marginally ahead of a whole group of social-and human-focused issues, such as poverty and hunger, human rights, corruption and abuse of power, and homelessness. The ‘social’ portion of ESG, we predict, will rival the environment as the leading area of concern in the coming year.”
TRANSPARENCY AND AUTHENTICITY WILL REIGN
As purpose and ESG move closer to being established-business strategies, scrutiny from all kinds of stakeholders will increase. “Market demand for a more socially-conscious economy will continue to pressure increased company ESG efforts, and programming,” said Caleb Gardner of 18 Coffees. “Yet pending regulations will cause companies to be less vocal about their efforts.”
This is true around the world: “2022 saw a flurry of regulatory action against companies accused of greenwashing, especially in Europe,” said Jessica Marati Radparvar of Reconsidered. “In 2023, companies will need to be more nuanced in how they communicate purpose efforts with greater honesty and transparency.”
Pressure for transparency will come not just from external groups, but increasingly from within companies. “We are going to see more employee-oriented campaigns signal to internal and external audiences what a company stands for,” said Phillip Haid of Public Inc.
Fabio Milnitzky of IN agrees that companies will need to be more transparent than ever. “That includes embracing ambiguity: to know where you want to be, but acknowledge you are not there yet,” he said. “Brands will no longer ask audiences for approval to operate, but rather for permission to make mistakes.”
Truly authentic companies will be willing to not only make mistakes, but to bring in others to accelerate and amplify impact. “Expect to see more unexpected collaborations between brands, designed to bridge divides and bring people together: from companies and nonprofits teaming on issues such as mental health, to startups and established companies partnering on issues from climate justice to democracy,” said Carrie Fox of Mission Partners.
“The realization that climate action is deeply connected to sustainable development and social justice worldwide will lead to a greater imperative for corporate and government action,” said Nick Aster of South Pole.
Fox also predicts we’ll see “more impact collaboratives launching among foundations as a way to pool resources and drive even more change on the most pressing issues—less division and silos, more collective impact and purpose.”
Additionally, “social impact programming for marginalized groups will grow,” said Melissa Orozco of Yulu PR. “Organizations are creating ‘places’—virtual and actual—where people belonging to these communities can access a company’s resources and networks to achieve their goals.”
Companies with more established ESG and purpose initiatives will focus on capturing and telling impact stories. “As brands continue to fund and develop long-form content, they will rely on documentary films with pro-social, high-impact themes,” said Marcus Peterzell of Passion Point Collective. “This will provide the brand with thought leadership halos while endearing themselves to consumers at the same time.”
“In a world that feels divided on so many fronts, from war, famine, political unrest, climate change, and politics of hatred, themes of empathy and belonging will reign,” said Nicole Rennie of Forward Storystudio. “Those whose efforts are centered around DEI, cultivating community, and building bridges across cultural and political divides will be rewarded in the years to come.”
KNOW THE CHALLENGES: MISPERCEPTIONS AROUND PURPOSE, THE THREAT OF “DISTRACTION,” FRAGMENTED WORKFORCES
Despite scores of studies proving the ROI of ESG and purpose initiative, skeptics remain. “The ongoing misperception that purpose and profit don’t support each other when, in fact, they are fully aligned, will continue to be a challenge,” said Annie Longsworth of The Siren Agency. “A brand that knows and lives its purpose—not just its ability to make money—will be successful in 2023.”
This makes “measuring and accountability” all the more important, said Sophia Story of 3 Sided Cube. “Everyone talks about purpose, but how it is defined in your organization and how you measure it will be essential.”
Internally, “the fragmentation and dispersion of the workforce creates a unique challenge to communicate and connect purpose with employees, partners, and consumers,” said Harold Hamana of Knight & Pawn. “The virtuous circle of creating-communicating-living-reinforcing the values of companies and brands must now happen remotely, though multiple channels and frequently in real time, to be effective and believable.”
This level of “volatility—inflation, housing markets, politics, and world affairs—will continue to place pressure on the storytellers of our world to capture our times and tragedies,” said Elliot Kotek of The Nation of Artists. “The same volatilities are likely to be utilized by short-term-minded operations as an excuse to stick to what they’ve done previously and forego more purposeful plans—unfortunately, that short-term mindset is likely to damage corporate value.”
The organizations that do leverage volatility as a change agent should bolster their efforts by aligning with like-minded stakeholders. “The mass realization that governments will significantly miss carbon targets and emissions reductions by 2030 will be a major force leading to consumer pessimism or detachment in some circles, and increased activism in others,” said Kristian Darigan Merenda of Carol Cone On Purpose.
Some organizations may take this a step further, leveraging “purpose to find a way to bridge the political divide,” said Silvie Snow-Thomas of Elle Communications. “So much related to ‘purpose’ is considered progressive, even liberal, but we are never going to make a true, lasting impact and create actual systems change if the political divisiveness and separation continues to be so pervasive.”
SUCCESS RELIES ON VULNERABILITY, CAREFUL LISTENING, AND THE ABILITY TO OPERATIONALIZE A VISION (STARTING WITH EMPLOYEES)
“Listen to your employees,” said Laura Ferry of Good Company. “See them as whole people, with diverse cultural experiences and complex lives. The more you know about them as individuals, the easier it is to align company purpose with the unique circumstances, personal passions, and talents of a fully-realized, highly productive, sustainable global workforce.”
Companies can strengthen this link by ensuring purpose is aligned with corporate strategy, and embedded in every employee’s KPIs. This helps “ensure a sustained focus in all corners of the organization,” said Talya Bosch of Carol Cone On Purpose. “And link purpose to culture, equipping and training middle managers, as well as everyone else.”
“Embedding purpose means changing culture so that everyone, everywhere, in every function of the organization, all the major stakeholder groups, know what the company is about,” said Shahin Hirji of R&G Strategic. “Once you have established a purpose, use it as a litmus test in all decision-making and a starting point for all new projects, activities, and strategies.”
When operationalized in this way, purpose can be a powerful antidote to two familiar foes to any business leader: uncertainty and risk. “Regenerative brand leadership in 2023 requires welcoming vulnerability, embracing ‘not knowing,’ and turning challenges into quests,” said Raphael Bemporad of BBMG. “You have to get comfortable with the discomfort of not having all the answers, and invite that as an opportunity for creativity and for cultivating new leadership from the bottom up and from diverse, outside perspectives to pioneer new ways forward.”
Laura Probst of Do Good: Make Money agreed, saying, “the intersection of turbulent economic, political, and cultural forces make extreme clarity of one’s corporate purpose essential. It’s very difficult to live your purpose if your employees and key stakeholders don’t have a clear understanding of what your purpose is, can easily restate and share it, and live it in their activities.”
Like any good strategy, purpose must remain rooted in core truths, but evolve over time. “An authentic, inspiring, and actionable purpose lies in the intersection of the core and the future role of an organization,” said Derya Tombuloğlu of Heart Mind Design. “In a constantly changing world, organizations are becoming ‘future-obsessed,’ underestimating the core that brought the organization to today. To activate purpose, leaders should create room for reflection and reconnecting to the core to shape the future.”
Ultimately, “purpose in 2023 must be fierce and true,” said Shayna Samuels of Ripple Strategies. “We can no longer ignore the threats to humanity, including climate change, hunger, and equity. Proposed solutions cannot be superficial. They must have genuine impact with long-term commitment. Every business must do their part.”
Article Credits: Fast Company