Giving back is no longer optional for companies competing for top talent
“Purpose” is getting so much attention in the business press these days that now things are going meta: Harvard Business Review recently published a series entitled, “What is the purpose of your purpose?” (1) It’s an excellent read and the authors include an important caution: “Although this focus on the role of corporations in the economy and broader society has many positive aspects, a risk is that speed, shortcuts, and spin may take precedence over authentic action.” The risk of pretending at social responsibility, rather than truly embracing it, is huge, and in 2022, the consequence is the very viability of your business.
If all this buzz around purpose feels familiar, it’s because more than 10 years ago, it was the buzz was about the environment. Companies rushed to position themselves as earth-friendly, only to face backlash from consumers calling out superficial “green marketing” for what it was: inauthentic. Marketing a company as earth-friendly is not the same thing as actually rethinking a business to actually be more sustainable. Here we go again, only this time the accusations of “green-washing” are being replaced with accusations of “purpose-washing” — and now, it’s employees who are calling foul.
Employees demand real purpose
The current generation of young talent isn’t satisfied with companies that only gesture at making their communities better places.(2) In fact, the majority of employees say they wouldn’t work for a company without a strong purpose, and would be willing to take a pay cut to work somewhere truly purpose-driven.(3) Employees know that Instagram posts that say the right thing aren’t the same as actually doing the right thing. In the past, you may have been able to check the “giving back” box by, say, hosting an annual day of service. Today, giving back needs to be a deeper and more tangible part of your organization’s DNA. Efforts at social responsibility need to align with, and be extensions of, core business strategy, goals, and culture. Otherwise, you will fail the authenticity sniff test, lose talent, and even risk losing profitability.
While the values of a younger workforce are one big driver for companies’ emphasis on committing to purpose, the Great Resignation is another.(4) The period between ages 30 and 45 used to be considered a more settled stretch in a person’s career. But new data shows that employees in that age bracket are the ones for whom the pandemic prompted the biggest existential crisis: they reflected on what they want — and it turns out they want to do work that matters.(5)
What’s more, a majority of consumers cite a company’s purpose as a major driver in purchasing decisions, and investors are increasingly prioritizing purpose, too.(6) As Gartner’s chief of research, Chris Howard, recently explained, “There is a growing recognition that enterprises exist within society and bear responsibility for the outcomes they produce, good and bad. And this type of sustainable business mindset — in which organizations shift from a mindset of ‘doing less harm’ to ‘doing more good’ — is increasingly a dimension of valuation for investors, so it cannot be ignored.”(4)
Redefining “good business”
At this historic moment, as we collectively reconsider what the future of the workplace will be like, we must also fundamentally reconsider what it means to be a responsible company. At the 2019 Business Roundtable, members redefined what it means to be a corporation for the first time since the group’s founding.(7) In the past, a corporation was defined as a group focused solely on maximizing shareholder profits. Now, a corporation’s stakeholders are defined to include shareholders, the environment, society, and employees. This new definition rolled out just before a global pandemic that sparked a major reconsideration of so many aspects of how we live and work. It’s not a surprise that many businesses know they need to change, but are unsure of the roadmap.
When I was starting out, the career story went something like this: Get a job, rise up the ladder, make money, make personal choices about community service or philanthropy, and then, one day, when you retire, think about giving back in a more meaningful way. That story has changed, and organizations who cling to the old narrative will become increasingly irrelevant.
When it comes to giving back better — that is, strengthening your company’s authentic commitment to social responsibility, to the point that it’s baked into your core strategy and culture — there aren’t many role models. We may know what a bad business is — but what’s a good business? And what does it look like to shift from the old paradigm, to the new?
That’s the question of the hour. If you’re looking for a partner to help you navigate this moment, I invite you to learn about the nonprofit organization I founded, Working for Women. We bridge the gap between companies committed to social change, and nonprofits looking for support — all while funneling resources towards women’s economic independence, which data shows (and shows, and shows) makes both the economy, and society at large, better for us all.(8)(9)(10)
How’s that for purpose?
Founder & CEO, Working for Women