Traditionally, for-profit corporations have aligned themselves with the idea that generating revenue and creating social impact are two separate goals. However, it’s clear that this is no longer the case. From Apple’s Zero Waste Program to Nike’s pledge to invest 1.5% of its annual income into communities, consumers – particularly millennial consumers – are now increasingly attracted to purpose-led organizations. This sentiment has only been bolstered by the COVID-19 pandemic, which has demonstrated the need for companies to translate their social impact statements into tangible action. The pandemic has not only transformed the way we live, work, and interact, but has also brought underlying social, economic, and racial inequalities into stark relief. For organizations to respond to these global issues responsibly, meaningfully, and authentically, they must realize that businesses – particularly technology businesses – are not neutral parties to such issues.
According to Gartner, 70% of enterprises will be experimenting with immersive technologies for consumer use, with 25% of them deployed by 2022. In the same year, it is predicted that 75% of enterprise-generated data will be created and processed on the distributed cloud. The pandemic has accelerated this change and necessitated a movement towards a technology-led, agile workforce for many businesses. In a world where technology will transform all aspects of human life, it is more vital than ever for companies to embrace sustainable and socially responsible business models.
Beyond the ethical implications for businesses to become more purpose-driven, consumers are also increasingly evaluating companies based on their environmental, social, and corporate governance factors. In a survey conducted by the Capgemini Research Institute in June 2020, it was found that 78% of 7,009 consumers across seven countries believe “companies have a larger role to play in society.” With the rise of impact investing, social entrepreneurship, and corporate social responsibility, consumers are influenced to purchase more from organizations that have a strong vision for people and society. According to a study by Forrester, 31% of 4,818 US online adults say that a company’s social responsibility reputation influences their purchasing behavior.
Corporate social responsibility also intersects with an organization’s values and identity. Not only does a robust and consistent company brand increase the loyalty of its stakeholders, investors, and clients, but also, the happiness and productivity of its employee base. A study of 100 Fortune 500 companies demonstrated that there is a correlation between a company’s profit margin and CSR, with the biggest factor coming from how much employees resonate with their organization’s dedication to social and environmental causes. Seventy-five percent of millennials, a key demographic estimated to inherit USD30 trillion of wealth over the next 30 to 40 years, have said that it’s important or very important for a company to give back to society.
There is no doubt that technology in the twenty-first century is under scrutiny. The potential for technology to disrupt democracy, encroach on privacy, and inflict large-scale harm is a pain point for many of its users. Yet technology is also uniquely positioned to provide accelerated solutions for positive change, with its ability to facilitate cross-sector collaboration, streamline business processes, and democratize access to information. Tech companies need to be mindful of this balancing act and organize their business according to wider societal implications. They need to find – and define – a strong purpose that considers the impact of their business on people and the environment. The criticality of this focus is even more pronounced in 2020 and in the post-COVID-19 era, where only volatility is certain.
Creating a purpose-driven culture across all levels of an organization begins with recognizing that social impact and profitability are far from mutually exclusive concepts. Rather, people, purpose and profit are intertwined in ways that allow for companies to become significant drivers of positive change, while also driving performance and growth.
Associate Consultant – Digital Customer Experience