While many companies have been pushed to make business changes in the wave of the pandemic, there are some enterprises that have been pushing a change of their own – for the greater good.

Purpose-led companies, or purpose-driven companies, are not new. But as society places more focus on culture, impact, and business approaches that rise above profits, these companies are now receiving renewed attention. 

A purpose-driven or purpose-led business commits their business goals to the benefit of the public, being accountable and putting what is right into practice.

In this article, we briefly study why purpose-driven goals matters for businesses in today’s economic climate and look into some of the companies that are currently working to create value for society.

What is a purpose driven brand?

In essence, purpose-driven brands are widely leading the commercial world across many different industries today. They are essentially brands with a compelling mission statement, devised with the intention to leave a positive footprint by attributing its purpose and operational processes for the betterment of the world. A purpose-driven brand remains motivated by their core mission, an important part of which is attributed to the active resolution of an existing worldly problem or to address and alleviate a societal need. It serves a higher purpose that drives real change. This deliberate attempt to make the world a better place in turns informs the brand’s overall business purpose, brand vision, brand identity, brand story as well as its internal decision making processes. Purpose-driven brands incorporate both ethical and moral beliefs and considerations into the operations of their business and daily operations as they strive to make the world a better place for all.

The Rise of Purpose-Led Companies

The concept of purpose-led businesses has floated for some time, but lately, the conversations have increased.

With social media, community platforms and the multitude of news outlets, consumers and the society at large now has more access to information about how companies operate, source, and produce their products.

Through the democratised sharing of information, people are now able to learn and make more informed decisions about the products and services they use. They will frequent brands that supports worthy causes and addresses social and current issues, and choose those with principles that are more closely aligned to their own.

There is also growing talks among industry movers and shakers as well as academia about the sustainability issues that comes from the continuous quest for profit. Among the discussions were how the world’s natural resources are depleting faster than they can be reproduced, which are widening the gaps between the richer and poorer nations.

There is an understanding that purpose-led leaderships and business models are the way forward. While it is not quite at the finishing line, we are already seeing some sprinters who are ahead of the race. 
 

Purpose driven brands Vs Traditional Brands: Key Differences

Purpose-driven companies steer their business decisions toward the greater good and measure their performance differently. In contrast, a traditional brand is more focused on the commercial targets of its business, which tends to be an established product or service that has been in the market for a longer period of time.

Notably, Purpose driven brands are increasingly growing in numbers. They excel by prioritising purpose and impact as the major driving force behind its strategic business plan. This in turn, attribute increased recognition for the brand as part of their operation processes drives positive impact in the communities, which can lead to instill positive values and morales in the log run. 

Here we list a few companies that understand the fundamental shift in the role of corporations. These companies have been known to invest in their employees, deal ethically with their supplies, and protect the environment, boosting consumers’ confidence as they deliver their commitment through the products and services they offer.

Why Does a Purpose-Driven Brand Matter?

There is a plethora of benefits in adopting a purpose-driven approach. Statistically, research from McKinsey posits that employees at purpose-driven companies are 4 times more engaged at work. This in turn gives the business a competitive advantage over other businesses. More importantly, purpose-driven brands tend to excel in establishing brand loyalty as consumers tend to support businesses that are contributing to making a positive change in the world as opposed to the ones that are negatively affected the world. 

The higher purpose that purpose-lead businesses also confer a unique identity to their brand. According to Porter Novelli and Cone, 73% of Americans would be more likely to defend or be associated with a purpose-driven brands. As a result, customer loyalty attributes to consistent increase in sales and an overall higher profitability that enable the purpose-lead business to drive further changes. It is worth noting that there is a high potential for successful purpose brands to widely spread the messages of its cause as their efforts gain more recognition, particularly in a world driven by online wide-spread marketing. 

Tesla

Since its inception, Tesla has been known for its sustainable and clean energy initiatives manifested most popularly in the brand’s automobile line. Tesla’s mission statement is to accelerate the transition to sustainable energy, but with Elon Musk leading the brand, the company’s goal transcends the auto industry as they set out to change the world. 

True to Tesla’s purpose-driven mission, the company was quick to respond during the pandemic. It opened its manufacturing space and repurpose its car parts to build ventilators for hospitals during the height of the Covid 19 pandemic.

Musk may court controversies and is often thrust in the limelight for them, but his expertise in guiding innovation and delivering the company’s commitments is not one to be discounted. This is also what makes Tesla a standout among other companies in the electric car manufacturing category.

The Cheeky Panda

An eco-friendly brand, the Cheeky Panda is known for weighing their success by the tons of carbon balanced and the number of trees saved. The company makes sustainable toilet paper, kitchen tissues and rolls, and baby wipes using bamboo – the world’s fastest-growing plant. 

It all started when the founders travelled to South East Asia and noticed how much bamboo was discarded. Upon their return, they studied products made from bamboo. This resulted in a more sustainable alternative to pulp products.

The company products are available across Europe, China, the US, and the Middle East in retailers like Boots, Watsons, Amazon, and Carrefour. Its commitment to sustainability is evident in its impact on the environment. To date, the company has saved more than 250,000 trees and 31,100 tonnes of CO2, while reducing plastic by 10,000 tonnes.

Patagonia

Patagonia has been hailed as a paragon of brand purpose. This began with its owner, Yvon Chouinard, a former rock climber who remains as Patagonia's visionary in chief. In 2002, he pledged to donate 1% of its sales income or 10% of its profits (whichever is higher) every year to grassroots environmental charities.

Everything about the brand reflects Patagonia’s mission statement. From its core values, down to its repair and recycle campaigns (which encourages consumers to buy less) and using only organic suppliers. The company is also making effort in labour conditions with policies in place for its supply chain and productions. 

The company is a proponent of brand activism. Patagonia exerts firm commitment to take a stand and practice high moral values. 

Lego

For generations, both the young and old has enjoyed Lego for its fun and imaginative qualities, but the company’s switch to focus on purpose and sustainability was truly the building blocks that separates Lego as one of the most important brands on the planet.

Lego went in pursuit of purpose over profit, refocusing their core values and mission to make sustainable products and run environmentally-responsible operations with a higher purpose “to inspire and develop the builders of tomorrow.” Lego has even went as far as to end a 50-year brand partnership with Shell as Lego’s environmental values no longer resonated with that of Shell’s.

In a big step to realise their purpose, Lego is investing $400 million to facilitate its social responsibility and environmental initiatives. One of these initiatives is to make all LEGO packaging from recycled or renewable materials. They are also committed to making all its core products from sustainable materials.

Starbucks

To cap this list, we have Starbucks. The coffee giant may not seem an obvious choice due to its high revenue source, but the company has purpose deeply embedded in their business operations, from recruitment, to sourcing and supply, and into the community in which they serve. 

Among some of the worthy practices include putting its partners (baristas) through training and education programmes in preparation for corporate positions. When this campaign launched in the U.S. in 2014, there was a surge in applications for corporate roles, and this campaign was extended to the U.K for its success. On top of that, Starbucks also practices ethical coffee sourcing and has worked on supporting local farming initiatives via their regional arms across the world.

How to Build a Purpose-Driven Brand?

Active steps can be taken in establishing a purpose-driven brand, which beings with defining the purpose of a brand. This can be achieved by evaluating the driving forces behind a business plan, what problems it resolves, as well as its short and long term targets. Next, it is vital to integrate the purpose into the brand identity by ensuring that the purpose is woven into the branding, mission statement, and throughout the company culture. Once this has been achieved, the next step is to engage the audience by communicating your purpose through marketing campaigns, storytelling, and transparent best practices. The purpose is to engage your audience in a creative manner and get them on board, possibly through consumer interviews, focus groups or even a live count on the website to reflect differences and impact the business model is making. Naturally, these efforts should be measured, and the impact should be reported and evaluated regularly. Finally, a purpose-driven brand should be authentic in its values and proposition as authenticity is the key to building trust with consumers.

Purpose Driven Companies: Challenges and Considerations

The establishment of a purpose-driven brand is not with obstacles and challenges, it is important to understand and dissect them. Gettig the buy-ins consistently across the board could be a time consuming and challenging endeavor because it is a multi-faceted exercise that requires a purpose driven brand to find the right cause for its business model, one that is in alignment with its business values or can build resonance with its target audiences. This problem can be alleviated by adopting thorough research and gathering stakeholder input, which in turn will accord the necessary buy-ins. Next, the matter often gets increasingly complex as purpose driven brand must balance profit and its over-arching higher purpose. While it is not an easy task, instilling a clear Strategy and actively evaluating the effectiveness of its short-Term Investments and sustainability strategies would be helpful. Last but not least, it could be difficult to cater and adapt to changing social norms and issues in today’s evolving Landscape. Hence, contingency plans that predicate upon flexibility and ongoing evaluation are crucial.

Conclusions

Many companies are actively in pursuit of becoming a purpose driven brand to actively mark its mark in the commercial world. There is growing importance to purpose-driven branding in the business world because these brands are set out to utilising their commercial goods or professional services to support a social cause and in generating positive changes for the greater good, which differs from a traditional brand per se. In this article, we briefly study why purpose-driven goals matter for businesses in today’s economic climate and examine some of the companies that are currently working to create value for society. We also stipulated the steps to the effective establishment of a purpose-driven brand. Although it is not a strict formula, it is beneficial to be mindful to bear these strategies in mind as a start. Finally, we identify the opportunities as well as obstacles, that a purpose driven brand presents amidst an evolving economic landscapes characterised by change and unpredictability.