By KoAnn Vikoren Skrzyniarz
According to Yale professor Richard Foster, the average company launched today can be expected to survive only 15 years, compared to over 67 years for those founded in the 1920s. The path to brand love and related customer loyalty has waned, and ensuring a dependably stable business today is harder than ever before.
100 or more years ago, companies such as Ford, Johnson & Johnson, Procter & Gamble, and CVS were launched with a clear sense of purpose based on the intent to solve a recognizable social problem. Early leaders of these companies believed that profit would come as a result of creating real value for their customers.
As the 20th Century unfolded, a growing middle class fueled the economic engine, success bred a hunger for more, and the focus of leadership turned toward the power to generate profit rather than purpose. This trend was exacerbated with the advent of Madison Avenue, as marketers learned they could influence consumers to feel insecure in their happiness and to respond to a new set of invented needs. People flocked to the comforts offered by a whole new array of short-term-fix products and solutions, accordingly.
The unintended consequences of what felt for decades like the Holy Grail – an infallible engine to increase global prosperity – began to be recognized by very few toward the end of the 20th Century. By then, however, the advent of the Internet vastly accelerated our understanding of the interconnectedness of our collective actions, including the previously unrecognized externalities being perpetrated on the planet and its inhabitants.
Today, we find ourselves in the midst of a global self-reflection about the role of brands in the world, our relationship to them as consumers, and our expectations of them moving forward. The tide has changed, and business as usual – with its laser focus on quarterly earnings growth – is no longer sitting right with most of us.
We are now in the midst of a substantial paradigm shift in terms of our expectations of the brands we support. And as the demand for new products, services and business models that once again deliver on both purpose and profit continues to soar, business leaders who are tapping this shift are thriving in the face of uncertainty.
Building a successful, purpose-led business in today’s world presents a complex set of challenges. It requires a reboot in the way we think about strategy, informed by a vastly extended field of knowledge about the social and environmental impacts of our operations. And it depends on a new set of tools and partners. Having a purpose statement alone will not drive you into the leaders’ circle or build the trusted brand that customers increasingly demand; the next economy requires whole-systems shifts through the collaboration of all parts of the value network.
The good news is, many forward-thinking brands – both smaller, local brands and global multi-nationals – are realizing that they have far more impact on society and the environment, for good or otherwise, than they once understood. By understanding these impacts more deeply, while reconnecting their strategy and operations to an authentic purpose, they are re-engaging their customers as partners to help create shared value in a changing world.
The Sustainable Brands community focuses on sustainability-driven innovation that creates both positive impact and profit at scale. We explore the systems, processes, tools and partnerships that are helping to introduce net positive purpose to the businesses we serve.
Visit sustainablebrands.com to learn more.
KoAnn is Founder and Chief Executive of Sustainable Life Media, producers and conveners of the international Sustainable Brands community. Prior to launching Sustainable Life Media in 2004, KoAnn founded and lead a boutique management consultancy called Organizations That Work, focusing on helping enable breakthrough financial performance through purpose-driven leadership and improved organizational alignment.