The New Purpose Economy: Communicators, Get Bullish about Sharing Solutions
September 25, 2019
On August 19, 2019, more than 180 CEO members of the Business Roundtable (BRT) signed onto a new statement of guiding principles of corporate governance, shifting public companies from viewing profit alone as the purpose of an enterprise to regarding profit as a result of an enterprise’s purpose. To achieve this new direction will not only require a shift from quarterly decision-making to more strategic long-term planning, but it will also transform how (and with whom) companies communicate. In this new purpose-driven economy, storytelling may supersede stock tickers for gauging corporate success.
Modern Standard for Corporate Responsibility
For decades, the BRT adhered to Nobel economist Milton Friedman’s view that shareholder enrichment was the sole purpose of a public enterprise, enshrining the philosophy in its 1993 statement of purpose, “There is one and only one social responsibility of business, to engage in activities designed to increase its profits.” That’s a far cry from the group’s latest Statement on the Purpose of Corporations, which reads, “We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.”
Referred to as a modern standard for corporate responsibility, the new direction reflects the reality of the evolving marketplace, in which citizens increasingly look toward companies to solve societal and environmental problems and punish those that appear to put profit before people. In a survey conducted on behalf of Fortune in the summer of 2019, 64% of Americans said a company’s prime directive is “making the world better”—a lofty expectation that requires companies to evaluate where the value they deliver intersects with the interests of society.
Human Issues Resonate
Few dispute the importance of a healthy environment or the need to address climate change, but there’s evidence that the desired narrative around corporate responsibility may be moving from the global scale to a human one. The 2019 Sense & Sustainability® Study, published by G&S Business Communications, found that 55% of Americans correlate local job creation with a favorable business reputation for sustainability, defined as corporate social and environmental responsibility. They also recognize that this responsibility extends to a company’s supply chain, with 76% saying they are likely to favor companies that comply with human rights or compensation laws—an 8% increase over the prior year’s findings.
Given that companies are largely composed of people creating solutions for other people, human-related purpose stories exist in every enterprise. They’re a good place to begin when evaluating purpose performance and building a narrative that connects business operations with improving people’s lives across every interaction.
A Growing Demand for Positive News
Interestingly, the market for positive corporate responsibility news remains underserved despite rising consumer demand. While 60% of Americans surveyed for the 10th annual Sense & Sustainability Study believe bad news tends to dominate green business coverage, only 20% are aware of corporate efforts to share news about improving the environment and society. Even when you look at the home and building solutions industry specifically, 57% believe there is a tendency to report bad news in green business coverage about home and building companies, and only 23% are aware of the industry’s efforts to communicate responsible and ethical actions. An industry that is one of the largest employers in the U.S., exerts a daily influence on people’s lives and relies heavily on natural resources should dominate conversations in a purpose-driven economy.
Perhaps it is this perceived glut of bad news reporting that keeps corporate communicators from telling their purpose stories. Too often, the sentiment prevails that “no good deed goes unpunished” as companies that promote solutions to global challenges fear opening the door to greater scrutiny of their operations. Typically, though, the good-deed-gone-bad scenario emerges when a company appears more interested in the idea than the substance of its activity. Take, for example, the 2019 Google Camp where some of the world’s most influential people gathered in Sicily, Italy, for a three-day private event to discuss important global issues, including climate change. While this event was meant to be secret, it made infamous headlines not because of the solutions discussed for mitigating climate change but because the celebrities and top leaders reached the island location by fossil fuel-guzzling private jets and yachts.
Solutions Journalists Offer Opportunity
Journalists report on the news, and when world leaders and celebrities are caught greenwashing, it’s their duty to cover the story. It doesn’t mean journalists won’t report on positive news. In fact, a whole “good news” industry has sprouted up to find and share stories meant to uplift people’s spirits. Some are more of the human interest click-bait variety, such as The Huffington Post Good News and The Good News Network, but there is also a rising field of solutions journalism that offers business communicators an excellent opportunity to share their purpose stories.
Solutions journalists aren’t focused merely on reporting on positive news but rather on providing greater insight into approaches to world challenges that are likely to lead to positive outcomes. Complex issues often require complex solutions, and this new breed of journalist seeks to better understand and share various tactics to inspire others to join in solving these challenges. They are an audience more likely to embrace the incremental improvements that are often part of a company’s purpose narrative.
Time will tell if this shift to purpose-driven leadership takes root and whether share value gives way to shared values, but it is clear there’s currently a bull market for communications that creates a more purposeful dialogue about global challenges. Business communicators know how to link evidence with empathy to turn data about corporate responsibility into meaningful stories of human connectedness and action. Investing those talents into building narratives around corporate responsibility will certainly pay dividends.