Fed up with hearing about what millennials want? The past few years have seen a flurry of studies, articles and commentary about this generation.
Scientists have them flip-flopping between lazy, narcissistic, materialistic to open-minded, liberal do-gooders. However, of one thing we can be sure; they have strong views about modern-day business and the role of business in today’s society. And as business leaders, entrepreneurs and CEOs, it’s now time to take their concerns seriously because in just six years, 75% of the workforce will be comprised of millennials.
Combined with the fact that their spending power will overtake that of Generation X (those born in the 1970s), and you have a force to be reckoned with. Their message is loud and clear; businesses must play a more significant role in improving society.
According to the recent 2018 Deloitte report, ‘there continues to be a stark mismatch between what millennials believe responsible businesses should achieve and what they perceive businesses’ actual priorities to be. Young workers are eager for business leaders to be proactive about making a positive impact in society – and to be responsive to employees’ needs.
And before you shrug this off as an isolated questionnaire in perhaps a developed country, this was a comprehensive study of over 10,455 millennials across 36 countries. This is not just rhetoric; the repeated warning to businesses vying for their money and loyalty is that millennials are prepared to switch brands to ones associated with causes – 91% in the US.
Milllennials are driving a need for purpose-led business
While there’s debate about whether millennials reached this point because they are consumers first and world citizens second (thereby expecting brands to solve societal problems), it doesn’t matter. The end game is still the same; businesses in the future must be purpose-led delivering profit with purpose.
And in case you think this is a generational ‘blip’, it appears that Generation Z are equally socially aware as demonstrated by the emergence of Swedish youth leader and activist Greta Thunberg inspiring school age children to March against Climate Change in UK, Australia, Belgium, Japan, USA and more. (Also echoed in the 2018 Deloitte study that, for the first time, included Generation Z participants).
For current business leaders, and especially larger global groups, the scale of the day-to-day job is enormous; simply ensuring that the business remains competitive in a fast-paced technology-driven climate while dealing with pressures from shareholders, investors, governments and regulators is beyond time-consuming. However, the most recent Edelman Barometer shows that 60% believe CEOs are driven more by greed than a desire to make a positive difference in the world.
So, what if there was a second way? An alternative business model that could deliver against all the commercial imperatives, but also create real value for society? In this way, the future millennial workforce and consumer/customer base would be satisfied on both counts.
CEOs need to take on social issues
One clear message coming out of the latest Edelman trust study was that 64% think CEOs should take the lead on societal issues. Clearly this requires pioneers, social innovators at the highest levels who are prepared to trial new purpose-driven business models that will disrupt – and will more than likely experience disruption, but in the longer term will deliver.
This is not new news. Companies able to harness the power of purpose to drive performance and profitability enjoy a distinct competitive advantage according to Harvard Business Review Analytics and EY’s Beacon Institute.
The good news is that we are already seeing true pioneers amongst our business leaders. These are the CEOs who have been prepared to take risks and have stood steadfast in the belief that purposefully improving society will benefit the organization. Take Unilever’s CEO Paul Polman who introduced the Sustainable Living Plan committed to embedding purpose into decision making; from sourcing to packaging to new product development.
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The Sustainable Living brands grew over 50% faster than the rest of the business and delivered more than 60% of Unilever’s growth in 2016. Paul’s message to the rest of the business community: businesses would be “stupid” not to lead on purpose-driven products and campaigns and those who don’t “won’t make it”. Equally, Larry Fink, CEO of Black Rock, one of the biggest asset managers in the world, recently wrote a letter to global CEOs stating that:
“Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders. Purpose is not the sole pursuit of profits but the animating force for achieving them. Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked.”
This is powerful stuff from one of the world’s most influential financiers. However, the dial to move towards purpose-led business is shifting too slowly. Whether born out of fear, apathy or it being in the ‘too difficult’ box, organisations must place purpose at the core.
The temptation to greenwash, brand spin or tag on a CSR-style activity or sponsorship is strong. However, millennials can sniff out insincerity and lack of authenticity from far away. In fact, Unilever disbanded its CSR department in a bid to embed sustainability in every corner of the business.
Balancing purpose and profit
Fortunately, organisations and groups such as B-Corp are a driving force for good amongst the global business community.
Businesses that receive certification from B-Corp must demonstrate that they balance purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.
Some well-known brands with certification include Hootsuite, Kickstarter, Patagonia and Ben & Jerry’s.
In the UK, Business in the Community has worked tirelessly over the decades to hold businesses’ feet to the fire when it comes to social responsibility. For example, their annual award scheme features, surprise surprise, the prominent Unilever Global Development Award.
The most recent winner in the small business category is an excellent example of the new model of a purpose-driven business that also makes money. Hydrologic is dedicated to giving people access to clean water in even the most remote parts of Cambodia – and doing it in a sustainable way.
They make, distribute and sell ceramic water purifiers to customers across rural Cambodia to remove bacteria without the need for boiling it. They create jobs, make profit and solve a huge societal problem. As the Chairman Michael Roberts states: “the core mission is to deliver products with high social, environmental, and economic benefits to rural Cambodian households – and the more successful we are at implementing our business plan, the more positive impact is created.”
Startups: the green shoots of purpose-led business
There are many, many other green shoots appearing that epitomize purpose-led business – and these generally tend to be startups. But startups turn into global brands, and in today’s fast-paced technology-driven climate, they can disrupt existing markets and sectors overnight.
As recently showcased in the Huff Post, there’s Bottle4Bottle, an Australian family-owned business that invites customers to shop for a cause. Each time they sell a bottle of lotion or spray tan solution, they donate a bottle of premium formula to an orphaned or abandoned child in need.
Or Warby Parker – a business that revolves around social responsibility. For every pair of glasses, they sell in their stores, they donate a pair to somebody in need. As part of their programme, they also train men and women in developing countries to perform basic eye exams and sell glasses.
Then there’s Toms, an inspirational young company that is also a Certified B-Corp. Their business model is based on a One for One premise – that with every product you purchase, TOMS will help a person in need. TOMS helps provide shoes, sight, water, safe birth and bullying prevention services to people in need.
Millennial ingenuity emerges
So, as the millennial generation matures, no longer will they simply be the consumers or spenders of the future. Before long they will start to emerge as our leaders, visionaries and trailblazers. The ingenuity of this generation is already starting to emerge, and the results are staggering.
For example, Guillem Singla Buxarrais and Dimitris Athanasiou, both millennials, co-founded Neurofenix to support stroke sufferers with rehabilitation of their upper limbs through smart games. Their NeuroBall intelligently adapts to the patient and becomes increasingly challenging as the patient progresses. This purpose-led start-up is an excellent example of a company that is solving a societal problem while also delivering against commercial objectives.
Then there’s Edward Maslaveckas and George Dunning who created Bud – the ‘universal banking platform’ where you can manage all your finances (be it a current account, credit card or savings account). Driven by a passion to make banking personal again, Edward and George, both millennial fintech entrepreneurs, have successfully built the business to eight while self-funding the project alongside support from the Open Up Challenge.
Supporting the next generation of purpose-led business
As we look to the next generation of leaders to re-orientate models towards being purpose-driven, we need to ensure that they are supported as much as possible to make their ideas and businesses a reality. This means that business schools, universities and education must embed the importance of social innovation and purpose-driven organisations into their teachings.
Refreshingly this is happening with appointments such as Michael Hayman as Honorary Professor of the Purpose Economy at the University of London, Mariana Mazzucato, Founder and Director of the UCL Institute for Innovation & Public Purpose (IIPP) and Dame Polly Courtice at the Cambridge Institute for Sustainable Leaders.
However, unlocking fresh ideas, creativity and innovation using tech-driven solutions to solve problems takes money and support. Initiatives such as the challenge prize model is gaining popularity globally as governments, foundations and regulators recognize their value in using them to effectively solve societal problems by leveraging social innovators.
From tackling antibiotic resistance, innovating in the face of banking regulations to the benefits that drones can bring to society, The Challenge Prize Centre at Nesta has distributed £15m to over 8,000 problem-solving innovators design real solutions to some of the great challenges faced by mankind over the past few years.
This includes Active Hands who make gripping aids are ideal for tetraplegic/quadriplegics, those with Cerebral Palsy, stroke recovery or any disability that affects hand function; or Neurofenix that develops products that engage stroke rehabilitation exercise through smart games; or Open Bionics who develop affordable, assistive devices that enhance the human body.
With a wealth of support, evidence and pioneering examples, the time is right for businesses of all sizes to think about how they can shift towards a more purpose-led model.
Perhaps the answer is to reach out to its millennial employees and invite them to co-create a vision for the future? Or perhaps it’s simply to follow in the footsteps of trailblazers such as Paul Polman and Larry Fink. What we do know is that time is running out – and we shouldn’t wait for millennials to be at the board table to make the change.