6 trends that will reshape business purpose in 2021
The world we’re entering in 2021 will be far different than we imagined a year ago. Yet we begin the year armed with lessons from 2020, as well as new challenges, new opportunities, new beginnings, and renewed hope.
For businesses, this has meant a growing movement to embrace purpose—a reason for being beyond profits, grounded in humanity—to do well and do good by solving some of the world’s biggest societal challenges. 2020 accelerated this movement by forcing companies to reprioritize; put their employees, customers, and communities above shareholders; and use their capabilities to respond to the pandemic with agility and empathy.
This year, their insights take on new meaning.
Where We’ve Been: Purpose and the Pandemic
Pre-pandemic, society grappled with an impending climate crisis, along with all the other pressing global-social challenges of today—from hunger and homelessness to healthcare and education.
While COVID-19 became the issue of 2020, it also highlighted and exacerbated underlying issues like inequality, the state of our prison systems, access to education and technology, racial justice and so much more.
This convergence of issues challenged companies to step up in unprecedented ways, as more citizens looked to the private sector to take action that stretched nongovernmental organizations and gridlocked governments couldn’t. “Over two-thirds of all philanthropic dollars donated to the pandemic came from the corporate sector,” says Brittany Hill, founder and CEO of Accelerist. “Purposeful companies realized, yet again, they can fill societal, governmental, and economic gaps in times of crisis.”
The organizations with an established purpose pre-pandemic responded swiftly to the events of 2020 and—most important—with empathy and humanity. “Purpose has served as an antidote to paralysis, helping companies stay focused and motivated in extremely adverse conditions,” says Fábio Milnitzky, CEO of iN. “When all else is uncertain . . . people turn to what they know is true and unchanging—purpose—as inspiration and direction for decision-making.”
Though awareness of the role of purpose in business has grown in recent years, purpose as a core business strategy had never been put to the test as it was at the height of the pandemic.
Where We’re Going: Purpose in 2021
The silver lining of 2020 is that the world is now entering an era of “shifting paradigms,” says Raphael Bemporad, founding partner of BBMG. “Brands are becoming increasingly ‘regenerative,’ evolving from ‘sustainable’ and ‘resilient,’ with higher aspirations and a determination to challenge the status quo to improve the system for all.”
Harold Hamana, managing partner of Knight & Pawn, says, “Purpose will be at the core of every sensible organization adapting to a post-COVID world, taking into account the new reality of employees, their goals, and their redefined relationship with their communities.”
With this new paradigm, here are some trends that will define purpose in 2021.
1: Authentic purpose measured in action, transparency, and accountability
To achieve its full potential—that is, driving both positive business and societal impacts—purpose must be authentic, “genuinely prioritizing what is right for the world over what is most profitable,” says Danielle Finck, founder and CEO of Elle Communications.
Companies today “have a responsibility to be more authentic. People are more in awe of what they can be instead of what they should be,” says Cory Grabow, partner and CEO at the Bruxton Group.
Post-pandemic, “‘authentic’ will tenaciously attach itself to corporate actions rather than corporate intentions,” says filmmaker Elliot Kotek, founder and CEO of the Nation of Artists. “Purpose will be measured by the trio of action, transparency, and accountability.”
Annie Longsworth, executive managing director at RF|Binder, notes, “Being authentic in purpose will mean companies leaning into this to guide decisions, allowing their purpose to be tested and challenged. Purpose must be used as a brand’s lens for decision-making, innovation, crisis response, engagement, growth plans, and opportunities.”
2: “Story-doing” becomes critical
With this increased focus on authenticity, storytelling will evolve into “story-doing,” as companies increasingly take action before they communicate about it. “We’ll hear stories about real risk-taking, about rolling up sleeves and jumping in to help,” says Laura Ferry, president of Good Company. “We will learn about the people who bravely stood up, helped others, or marched for a cause.”
Andy Schmidt, managing director of Pearl Consulting Europe, adds, “We are seeing a large increase of bold, long-term company commitments around transforming their organizations, value chains, even industries. While those long-term commitments are needed, consumers, employees, and investors expect for them to be backed up by short-term action. 2021 and the years ahead will belong to the businesses demonstrating short-term actions that bring their purpose and long-term commitments to life.”
3: Stakeholder capitalism demands a reset
The purpose of a corporation is no longer just to maximize profits for shareholders, but to serve and create value for all stakeholders. This movement, called “stakeholder capitalism” by global leaders including the World Economic Forum and Business Roundtable, refocuses short-term action and long-term vision to impact customers, employees, suppliers and partners, local communities, and the environment. Done smartly and authentically, this approach supports bottom-line growth.
“Six in ten people under age 30 want the post-pandemic recovery to prioritize ‘restructuring our economy so it deals better with challenges like inequality and climate change,'” according to a global study from BBMG. “Young people are looking for a reset rather than a return to the status quo,” Bemporad says.
The pandemic served as a pressure test for stakeholder capitalism, forcing companies to put human needs—from worker safety to customer support—before short-term profits. It has brought the importance of employees, customers, and communities into sharper focus, while inspiring new ways to address societal needs through business capabilities.
4: Corporate boards drawn into purpose strategy
The C-suite has been tasked with a new role as beacons of direction and hope amid turmoil. “The long-term impact of COVID-19 will present major challenges for CEOs, and they will need to rely heavily on core purpose to navigate what could be rough seas ahead,” Ferry says.
Governing boards will also play an increasingly important role in advocating for and advancing purpose within their organizations. “The acceleration needed for stakeholder capitalism requires more boards demanding social and environmental impact as a key business strategy for short- and long-term growth,” says Phillip Haid, founder and CEO of Public Inc.
“There is so much work to be done by governing boards to develop and foster an approach to business that works for all people, and not just for a select few,” says Carrie Fox, CEO of Mission Partners.
5: Employees as engines for change
With this, “purpose will be a larger part of the conversation about the new world of working virtually,” says Aaron Hurst, cofounder and CEO of Imperative. The rapid pace of business adaptation in 2020 has been remarkable, presenting new requirements and opportunities with more focus on employee welfare and culture.
While the C-suite must carry the mantle of purpose, it will not drive business and societal impacts if not developed, embedded, and activated by employees. “When the public sees a seven- or eight-figure-a-year CEO championing a cause or purposeful mission, it rings hollow and inauthentic with the public,” says Alan Chebot, owner of Parallax Productions.
Adds Jeff Blaylock, vice president of Kith, “A leader committing to purpose is a promise for change. Employees committed to purpose is an engine for change.”
6: Companies will collaborate at scale
The scale of the pandemic forced companies to work together to develop solutions and address critical needs. Organizations not only applied their own time, talents, innovations, and capabilities to respond to COVID-19 and the racial justice movement, but also worked alongside others to accelerate progress and supplement their own efforts. “2021 will be the year that industry competition becomes industry alliances,” says Melissa Orozco, founder and chief impact officer of Yulu PR.
While the most notable collaborations happened on the national or global level, “it was individual communities and small businesses banding together to help those who were less fortunate that made some of the biggest impacts,” Blaylock says.
We must never forget the events that defined 2020, or the lessons they taught us as business leaders, individuals, or as a society. We must continue lifting up the heroes—from the truck drivers delivering food at the height of the pandemic and our healthcare heroes to the millions of people of color and their allies who bravely marched for equality.”
2021 will be an even larger test for businesses around the world. Those that continue to embrace and embed purpose—or take the wise step to define and integrate a purpose—will define the next 12 months, and our collective future as a society.