A few years ago, companies used purpose to differentiate. It was an edge over their competition, something that was applauded by consumers. Today, it’s the expectation. Businesses want to not only do well for their companies, they also want to make a difference in the world, and between modern slavery and extreme poverty, the supply chain is the ticket. We’re living in an age where supply chains are becoming more and more complex and what you can’t see can hurt you.
What does purpose actually mean? The Merriam-Webster dictionary defines purpose as “a subject under discussion or an action in course of execution.” The key word here is “discussion.” Purpose is subjective and it’s unique from person to person and business to business. What empowers our own individual purpose though is the power of conversation. Here is where businesses can move the needle.
So why now? What makes purpose not only relevant in today’s world, but critical to success? A Nielsen study reports that about two-thirds of consumers are willing to pay more for products and services from companies who are committed to positive social and environmental impact. Nine in 10 consumers expect companies to not only make a profit, but also operate responsibly to address social and sustainability issues, according to another study by Cone Communications. Additionally, it reports that 84 percent of global consumers said they seek out responsible products whenever possible and they’re willing to pay for the peace of mind in knowing they did so.
But social causes aren’t limited to consumer companies. There are an abundance of ways that companies can do good. Any company. Think about the core of your business and how you can leverage it to serve a higher purpose—one that aligns with the issues that are important to your customers and the industries you serve. Think about cloud and network technologies and how you can leverage big data, machine learning and AI to bring transparency into the supply chain and act with purpose. When it comes right down to it, consumers and businesses alike want to feel that their purchasing decisions are not only beneficial from a fiscal standpoint, but also a personal one. The emotional element that comes with bringing purpose into your brand is deeply powerful and should never be underestimated.
One of the major drivers in businesses adopting a “purpose mission” is the inherent risks that come with not doing so. For example, at each step along the supply chain, businesses are inviting opportunities for inhumane labor conditions and other non-ethical scenarios that pose severe risk to not only their brand’s reputation but also to business growth and talent retention. In today’s world, consumers and employees don’t want to associate with businesses that aren’t able to guarantee a clean and ethical lifecycle for their products.
Businesses want to make a difference. They want to drive ethical behavior across the supply chain, and take on things like supplier diversity, as well as tougher challenges like the elimination of forced labor or the use of minerals that come from conflict zones…and with the help of technology they have the power to do it.
Collectively, companies in the Global 2000 spend an astounding $12 trillion on goods and services annually. And by tying their purchases to purposes, these companies can ensure they provide fair labor practices across their supply chain. They can make opportunities available to minority and women-owned businesses. And they can ensure that no slave labor is being used to make their products.
Companies across all industries are trying to connect these dots. They appreciate that there’s a problem but struggle to identify where and how to solve it simply given the lack of transparency in understanding their own supply chains. This is where networks come into play. Just as social networks allow consumers to share, shop and consume, business networks give companies the power to discover, connect and collaborate across a global network of partners in an open and informed way. That way the learnings of one organization can benefit all. We can all work together to do good and we have a corporate responsibility to do so.
That’s the power of purpose. And it is the greatest power of all. As procurement professionals, it motivates us to innovate and solve complex problems using connected data and transparent multi-tier global supply chains. It enables and empowers us to reimagine and reinvent what is possible. At the end of the day, when you combine the power of purpose with the technology and innovations available, businesses can make more informed decisions. This isn’t just an enormous opportunity, it’s a responsibility.