“Don’t find customers for your products, find products for your customers.” – Seth Godin
Businesses are transforming our lives, experiences and our futures. From innovative ideas, models and products that make our lives more enjoyable and meaningful to creating mutual value, the business world have gone through a transformative growth. In the early days as documented in history, business was about trading what individuals had for what they didn’t have. That was barter trade and in an economy it ensured people had all they needed and had confidence in the ability of others in their ecosystem to fulfill their end of the trade. It worked seamlessly until a new era emerged following industrialization. Over this period it was an exploitative regime with corporations and businesses keen on the product being bought by customers regardless of whether it had value for them or not. This saw the role of governments heightened as defendants of the public and there was some level of confidence in governments. This is changing and it’s the basis for which I felt the urge to pen this piece down.
Globally, confidence and trust in governments is dwindling as reported by the Center for Public Impact, the non-profit foundation for Boston Consulting Group. In line with this, there is a growing appreciation of social impact as a key component of businesses by consumers. It’s on this premise that different insight reports by consulting firms such as McKinsey, PwC, Deloitte among others point towards growth in companies and market value for companies that commit to doing good. The social responsibility of businesses is playing a critical role. In a research by Shelton Group, this trend is noted among millenials with 90% buying brands whose social and environmental practices they trust.
These trends have been mapped by brand positioning strategies as well ranging from: Functional features (1970’s), Emotional benefits (1980’s), Value-added services (1990’s), Integrated user experiences (2000’s) and Brand purpose (2010’s). In the last phases we’ve witnessed an increase in the number of companies getting involved in corporate social responsibility (CSR) activities which happens to be a form of charity. It helped companies appeal to the emotional and sentimental needs of the communities and customers which played out to their advantage. However, with more customers being woke, companies will not only have to be charitable but pursue a cause they believe in and do it with the society in mind. In my perspective, charity is expensive in the long run as it doesn’t play to the tune of your operations but serves as a measure to get to your customers without necessarily getting a way to obtain insights to improve your offering. It thwarts growth and improvement.
On the other hand, anchored value and purpose at the core of a company’s operations serves as a key piece in driving sustainable growth. It offers companies an opportunity to drive transformational development in the communities they serve while making money like the e.g. the model that Ray Anderson used in transforming Interface, carpet making company. This is the basis of the transition and focus on shared value as a key principle in businesses where there is an intersection between the company offering and societal need that nurtures a mutually benefitting relationship. I believe this realization has been the driver behind the proliferation of social enterprises that integrate the values of NGOs but at the same time acknowledge they don’t have to be dependent on donations and therefore look for ways to create impact in sustainable ways.
In the coming years, we’ll witness and appreciate the growing role of corporations in our lives driven by dwindling government trust, heightened social consciousness globally, changing business models and growing sense of responsibility. With these trends then it will be upon businesses and business leaders to align for valuable contribution of their companies to the customers they serve. This is one thing that I have always envied about Johnson & Johnson as was inscribed in their Credo 75 years ago by Robert Wood, a member of the founding family. A commitment to put the needs and well-being of the people they serve first.
“Our well-being is our shared responsibility. It’s time to lead with our hearts to put purpose and reputation before profit and returns. Then, we’ll be the hope that humanity so needs.”