Being Purpose-led is now becoming a commercial necessity, in response to environmental and social issues, and key to increasing customer and employee relevance and loyalty. The need for businesses to take action today is clear.
I started my career over 25 years ago as a new graduate working in strategy consulting. And whilst some elements have come full circle for me, others have markedly changed over that time. After nearly 20 years working in businesses, I went back to consulting, but the journey of Purpose-led businesses, as well as consumers, employees and investors expectations, has moved stratospherically in that same period. The consulting I do today has a much greater opportunity to make a difference not just for the business, but for their stakeholders too.
As a consultant back in the 90s, I worked in both the UK and USA. We worked hard and played hard – the first photo is from one of the many weekend trips I took with other colleagues on secondment in the States at the time Ian, Simon, Mark and James (what goes on on tour stays on tour!). We helped clients solve their business problems, reset their strategy, enter new markets or support their M&A activities – similar needs to those of today.
But whilst clarity of Purpose (or Mission as is often called in the States) had a role back then, the primary focus for most businesses and their Boards was growing shareholder value (or avoiding losing it!). Purpose still had a place in what the business was about, but in the main, it drove decision-making around what markets businesses were in and how to continue to open more commercial opportunities. There certainly wasn’t the breadth of stakeholder considerations that we’d take into account today.
In 2000 I moved to the Co-operative Bank. Ahead of its time with a strong ethical policy that drove its commercial lending and some consumer offers, there were many debates and tensions to navigate in continuing to grow market share and a lot to learn in balancing (or not) a strong sustainability agenda with desire for commercial success. For consumers, ‘ethical buying’ was still a very niche market in the UK, with a perception that ‘ethical=more expensive’. The debate was around how we continued to push for growth in a potentially limiting market – marketing and product development was not therefore necessarily all about ethics. The ethical policy was also focused on ethical and environmental perspectives, not a view of all stakeholders as you’d expect to see today. And as that ‘ethical’ framing didn’t necessarily translate into customer actions, the Bank fell foul of the same PPI mis-selling claims that all banking institutions did in following years.
Fast forward to 2013 after moving to The Co-op Group – the Co-op’s retail and consumer-services businesses. The Co-op, like the Bank, had been trading a commercial strategy separately to its ethical and sustainability agenda and, with the exception perhaps of Fairtrade products, the latter was not integrated and visible in how it traded. The Co-op was still grappling with similar questions of how the two co-existed with a need to offer low prices to be competitive for customers, and in the main, customers not being that bothered about the ethical credentials.
This came to a head with the near collapse of the Coop Bank following its merger with Britannia Building Society and the resulting impact on the Coop Group. The need to reset the organisation’s strategic intent was identified and I was privileged to work with Richard Pennycook and Steve Murrels on delivering that reset. The Exec and Board agreed that what was needed was to get back to what Co-op was all about – its Purpose. And to put that Purpose back at the heart of the business – as can be seen in how they talk about the businesses today.
I led the central work to reframe Co-ops Purpose and put it back at the heart of the business. Our task was not only to rearticulate the Purpose – Championing a better way of doing business for you and your communities – but to also reset how it lived through what we did as a business, and how we did business with all our stakeholders.
This included looking at our products and services (current and future), our member proposition and experience, colleague offer, community programmes and wider sustainability initiatives to look at opportunities aligned to our re-established Purpose. We also looked at our approaches to decision-making to ensure Purpose was embedded in how we made decisions, as well as exploring how we could measure the social impact we created.
The difference was a clear understanding of how our Purpose acted as the golden thread which connected what the Co-op was all about (you and your communities) with how the business traded and its operations. The 2nd photo is us celebrating the launch of the new Membership proposition, directly linking and creating value for you, the member, and your community. The result is an organisation with uplifted commercial performance and Purpose and Membership back at the heart of the business, with aligned activities and championing of key causes now a much stronger part of their externally told story.
Fast forward again, but this time to 2021, and being Purpose-led has moved on again. Customers are increasingly looking to use brands with strong sustainability credentials and sense of purpose, employees want to work for businesses that align with their values and investors are also increasingly looking to businesses with purpose-led agendas. People’s frame of reference has changed, arguably accelerated by the pandemic as so many trends have, but it was one that had started to accelerate even before.
In 2021, the businesses we at Hedgehog have been working with have a much stronger sense of Purpose and the impact they are aiming to have on their immediate stakeholders and wider planet and society than their predecessors of 25 years ago. We’ve had the opportunity to work with a manufacturer using mushroom matter to create compostable packaging rather than polystyrene and plastic. And we also did some pre-planning work with an initiative focused around COP26. Not the sort of work as a consultant you’d have been involved in 25 years ago. Being able to help organisations like these get the clarity they need to drive their activities forward has been both refreshing and rewarding in equal measure.
But not all organisations have yet got the clarity they need on their Purpose, and how that translates through into their products and services and operations to drive commercial success. Or how it all works together, rather than running silo commercial activities and sustainability agendas as we’ve experienced in the past.
If you think you need to do more to be more Purpose-led, we’d love to have a chat to see if we can help. For an initial discussion please email me at alyson@hedgehogstrategy.com.