Creating the Purpose-Driven Budget
April 07, 2015 04:00
By John McNeel in General
Today, as companies and brands come to grips with the new set of consumer expectations and seek to navigate the unforgiving rapids of social media commentary and scrutiny, embracing a higher Purpose beyond Profit has become more than a nice-to-have; it's a business imperative.
But as they rush to jump on the Purpose band wagon, those same companies have struggled with adopting the sets of behaviors that are consistent with their stated mission or ideals. Often the ambitious and heartfelt messages come crashing down under their own weight: it takes more than hot air to sustain them.
There's one often neglected factor underlying this failure of many companies to truly take flight with Purpose: the outdated, wasteful and counterproductive budgeting procedures that still prevail within most corporate organizations.
If a company is truly purpose-driven and understands that expressing and living that purpose is a fundamental business driver, there is no justification for the artificial silos that still exist today between marketing and cause marketing budgets, between corporate communications and corporate giving, yes even between sales and CSR.
Brands with purpose are ones that recognize the need to link their core business to a higher set of values and societal ideals, to really answer the question of what would be missing in the world if they didn't exist. They are brands that put everything through the filter of a statement of purpose that defines, for themselves and for the world, not only the 'how' and the 'what' of their business, but the all-important 'why.'
In a world driven by purpose, CSR budgets can no longer be considered just the price of corporate good conscience. They should be looked at within an integrated, purpose-driven budgeting process that connects selling and giving, purpose and purchase, customer engagement with the things that matter most to those customers.
After all, the money companies "give back" to causes would not exist in the first place if they didn't have customers!
Ample evidence points the way to this "final fusion" of purpose and profit — and the need for companies to therefore revamp their internal budgeting processes. According to Cone Communications, customers who know a brand gives to a cause they care about are 91% more likely to remain repeat customers, to buy more and encourage their friends to buy more.
Here are three simple ways to drive this much-needed reform within your organization:
Ensure that your statement of Purpose truly connects to what will make your business succeed. Too many so-called corporate Purpose programs are conceived as a way of "white-washing" the business facade. Your company will succeed and grow more effectively when driven by the right purpose and when it becomes the filter by which everything is judged — including where and how to invest corporate development, operations or marketing funds.
Conduct an audit of your CSR, cause-marketing or corporate-giving budgets to gauge whether they are supporting both your Purpose and your bottom line. Talking about ROI when it comes to CSR is often frowned upon by those who fundamentally misunderstand the notion of purpose. But a purpose-driven organization can unabashedly connect "doing well" and "doing good" because ultimately what is good for the company is good for the community, and vice versa.
Establish budgetary guidelines that rely upon a common set of KPIs, for all marketing, communications and CSR investments. Bring down the silos that in many cases are only still standing because of some old-school concept of corporate integrity. Monies that flow from companies to non-profit groups, or to support worthy causes or charities, should be seen as a fundamental pillar of doing business, which are also subject to the same rules.
Purpose is good for business. At the end of the day, when companies connect acts of selling with reciprocal acts of giving back, they are doing no more than acknowledging what Harvard professor Michael Porter pointed out: that one of the pillars of capitalism is (or at least should be) the creation of common value.
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