4 Reasons Why Purpose-Led Companies Will Outlast Competitors
Whether its actively exemplifying their mission statement, or empowering their employees to be the best version of themselves, companies that are prioritizing purpose have a distinct advantage over their competitors. Here are 4 reasons why companies should put purpose first.
1. Employee productivity and satisfaction
125% higher productivity when employees are inspired at work (Bain and Company)
73% of purpose-oriented people are satisfied in their jobs (LinkedIn)
How they incorporate purpose and bring to life: Delivering happiness to their employees through Zappos University, shadow sessions, life coaching, and flexible scheduling. (See this blog post)
2. Company performance
- Purpose-driven businesses have 4x the compound annual growth rate (CAGR) of companies in the S&P 500 Consumer Sector (Korn Ferry Institute)
63% of CEOs agree that emphasizing purpose in their business contributes positively to revenue growth (PwC)
Patagonia launched it’s “Common Threads Initiative” to encourage customers to repair and reuse as much of their clothing as possible, even creating a market with eBay for customers to trade items they no longer needed. Within 18 months, they had repaired over 30,000 items. Patagonia also purchased a full-page ad in The New York Times, which featured a simple shot of a fleece under the headline “Don’t Buy This Jacket.” Ironically, the more Patagonia pushed anti-consumerism, the more people bought their products, resulting in a 30% jump in sales.
3. Employee Retention
Deloitte’s 2016 Millennial Survey showed that young people are more likely to stay at an organization if their values align with that of their employer. 88% of employees who stayed at their organization for longer than five years were satisfied with the sense of purpose in their company, compared with 63% who left within two years. (WEF)
A global survey by Right Management found that out of 91 possible factors, personal commitment to an employer’s core values is the top driver of employee engagement.
Company: Whole Foods
It starts at the top with CEO John Mackey and his commitment to values-based leadership and putting purpose first. In his oft-cited blog post “Creating the High Trust Organization,” Mackey makes the case that modern businesses need a higher purpose, in part, to help galvanize employees around a common cause.
Whole Foods’ core values include “Support Team Member Excellence and Happiness” and “Serve and Support Our Local and Global Communities.” These values have made it easier for Whole Foods to attract the right employees for the organization, resulting in low employee churn.
4. Brand Loyalty and Consumer Engagement
79% of Americans say they are more loyal to Purpose-driven brands than traditional brands and nearly three-quarters 73% are more willing to defend them, according to the 2018 Cone/Porter Novelli Purpose Study. In comparison to their relationship with traditional brands, 77% feel a stronger emotional connection with purpose-driven companies, 70% are proud to be associated, and 67% are more willing to forgive if that company makes a misstep. Also, three-quarters (78%) of Americans would tell others to buy products from Purpose-driven companies. (Press Release)
Consumers today are using a company’s values as a filter for whether they should support (or avoid) an organization. 87% of consumers stated they would purchase a product based on values – because the company advocated for an issue they cared about — and 76% would boycott a brand if it supported an issue contrary to their beliefs. (We First blog about 2017 Core Comm Research Findings)
Everlane launched in 2011 as a direct-to-consumer clothing brand that is committed to “radical transparency” as one of their defining values. Radical transparency means Everlane shares the exact cost breakdown of their clothing—accounting for materials, labor, duties, and transport. Additionally, consumers can see beautifully produced photos and videos of their factories worldwide.