By: Alex James, CTO, Ascent
For many of today’s business leaders and their companies, making a positive societal or environmental contribution to the world is in their DNA. For the professional buying community and the recreational consumer alike, it’s a no-brainer to select suppliers with a conscience and a clear commitment to the common good.
As a result, more businesses than ever are being conceived and are succeeding because of a deeply held belief in social responsibility, equality and the need to live sustainably. Similarly, there has never been more emphasis on innovation in addressing short and long term challenges for our generation and those that follow.
According to research cited by leading analyst Josh Bersin in Forbes, for example, 65% of companies rate “inclusive growth” as one of their top three goals, eclipsing strategies like “growing market share” or “being the category leader.” What’s more, “citizenship and social impact” were rated critical or important by 77%.
All this adds up to companies, markets and economies that are increasingly driven by a sense of purpose. And on the face of it, what’s not to like about a win-win situation where businesses can be both successful and work for the common good?
Throwing down the gauntlet
The evidence that purpose = profit is increasingly evident. Whether it’s a cliche or not to reference Tesla in this context, their investment in energy storage technology has transformed the pace of change in the automotive industry – and myriad different applications across the wider world. Their commitment to sustainability (and more importantly, their ability to evidence this commitment) has carefully built consumer trust in new tech and created loyalty through responsible corporate citizenship.
Tesla’s mission is ‘to accelerate the world’s transition to sustainable energy’. In throwing down the gauntlet to a huge, established industry, Tesla has become the poster-child for what purpose-led businesses can deliver. It’s also a huge success and in October 2021 became only the fifth firm to exceed a market value of $1 trillion after car rental firm Hertz placed a $4.2 billion order for 100,000 vehicles.
Building digital capabilities to support purpose-led business
But declaring a strong purpose-led vision can be a double-edged sword. As soon as an organisation shares its purpose with the world, the clock starts ticking to articulate progress, describe investments and deliver results. The challenge for many is that purpose is often pushed into the spotlight early without full consideration of the demands it will make of the business in general – and its use of technology in particular.
The digital implications of purpose are significant. Any organisation that’s in it for the long term and intends to deliver on its purpose effectively and efficiently must understand the role of data and software in that journey.
From a data perspective, BI, modelling and visualisation allows scenarios and progress to be baselined, tracked, analysed and shared. Carbon offsetting, logistics optimisation and ‘what if’ analytics (changing packaging, reducing unit size etc) are all examples of initiatives whose success in real terms is grounded in strong data capability. Without this in place, businesses may lack the insight required to understand their impact, set meaningful, achievable targets or meet the evolving priorities and preferences of their purpose-led customers.
From a software perspective, automation and integration create efficiencies. Smart metering, IoT approaches and JIT (just-in-time) production make limiting waste more straightforward and change energy consumption models (lights-out manufacturing, autonomous vehicles, machine learning to continuously optimise and refine processes). Apps and systems embed new consumer and citizen behaviours that contribute to environmental and societal gain: video, AR and VR reduce travel requirements, NFC / Bluetooth-based apps help control COVID spread, bio-sensors support safety and health outcomes.
Startups have an inherent advantage over established businesses. These organisations – by definition – are legacy-free and their technology strategy can be aligned completely with their purpose. For the rest, technology and process challenges are akin to greenfield vs brownfield developments, where progress can only be achieved by deconstructing what was there before to realise something better for the future.
In today’s highly nuanced technology market, understanding the potential and pitfalls behind purpose-led objectives is absolutely fundamental to success. Making the connections between data, software and purpose is arguably the most effective route to living up to aspiration and delivering on commitments – and businesses that can best balance purpose and profit will reap the benefits.