Dilip Rao is the CEO and co-founder of Share bitethe leading food benefits platform designed for the modern workforce.
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We’ve been through enough periods of economic turmoil to see a dangerous pattern playing out: the market is showing signs of volatility, companies are starting to identify where they can cut costs, and before we know it, corporate social responsibility and other related initiatives are being scrapped .
The result? Employees and leaders are struggling to link their work to a greater purpose, and communities that rely on corporate support are facing mounting crises with fewer resources.
Consider the Great Recession: Between 2007 and 2009, almost two-thirds of companies reduce their money giving, employee engagement declined as burnout increased and Americans’ trust in institutions dropped sharply. It doesn’t have to be that way. Actually, it shouldn’t.
Spending my early career on corporate social responsibility initiatives and now leading a purpose-driven company has given me an understanding of the need to support these impact initiatives, especially during challenging times. Because as academic said Filippo Mezzanotti, economic crises can be “a catalyst for very profound changes”. In times of crisis, we can unlock targeted innovation that has a measurable impact on surrounding communities.
That’s why a recession is no time to lose sight of the target; the opposite, actually. It’s time to invest in a cause.
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There is power in the goal.
While corporate social responsibility and social impact initiatives are often the to cut first during a recession, a company’s goal is directly related to performance and retention, making it a necessary investment in long-term success. In addition, consumer expectations and employee demands have made targeting a corporate mandate in recent years.
As a nobleman closed in its Confidence Barometer 2022: “social leadership [is] now a core business function,” and consumers increasingly expect CEOs to be the face of societal change. Employees share this desire for companies to create impact—71% say it is “absolutely or very important to work where the culture supports giving.” Providing the opportunity to participate in a purposeful culture has a measurable impact on employee performance.
Employees motivated by a social mission And goal not only outperform their peers, but also report higher levels of satisfaction, engagement, connection and commitment. High employee involvement alone can increase productivity by 18% and reduce absenteeism by 81%, leading to an overall increase in profitability by 23%, proving that purpose can predict and facilitate financial growth.
In addition, according to one study“Companies with a strong sense of purpose are better able to transform and innovate” – a skill that becomes even more important in difficult times.
Today, we have the advantage of seeing how many companies navigate crises purposefully, enabling them to perform well And successfully tackling some of the world’s most pressing problems, such as climate change and insecure housing. In 2023, leaders can use their playbook to enrich both their businesses and communities. Here’s how.
Lead through a recession with a mission that transcends company walls.
To empower employees, shareholders and communities, it is essential to identify a mission statement that informs the pursuit of the company’s core objectives to ultimately produce impact and deftly communicate it to all stakeholders. Research proves the perception of a company’s responsibility footprint has a “positive impact on brand value during recessions”.
The first step is to ensure your mission Actually controls every aspect of your business. For example, people trust Patagonia because their mission is not just a statement; it’s a guideline that applies to all aspects of their business – their commitment to saving the planet drives everything from product development to creating a second-hand marketplace.
Communicate not only your goals, but also the process you follow to achieve them. When employees and consumers can see how a brand’s mission impacts day-to-day operations, they are better equipped to become true brand ambassadors and draw more attention to the work you do.
Build an ecosystem of targeted partners.
By strategically collaborating with like-minded partners, companies can maximize their footprint and find new entry points for meaningful change. Purpose-driven collaborations can gain even more value during a recession by maximizing efficiencies and cost savings and increasing impact across communities.
Strive for brand synergy as you build your personal ecosystem: Collaborating with companies with similar missions, values or objectives reduces friction along the way and forms the basis for an efficient partnership.
Additionally, keep in mind that when scaling is the goal, even your competitors can be fruitful partners. For example, by sharing resources, ideas and supply chains, Allbirds and Adidas, two of the most popular footwear brands, created a shoe with the lowest ecological footprint on the market.
Implement measurement systems to make a business case.
Some in business ignore the profit potential of purposeful organizations, especially during an economic downturn, because of the common misconception that its impact is immeasurable. Leaders can address these concerns by implementing transparent metrics from day one and tracking their progress toward their mission and financial goals.
Bombas was founded in 2013 with the mission to help the homeless. Last year, Bombas debuted for the first time impact reportwhich shows how its mission has led the company to profit year over year through its proprietary “infrastructure of giving” model, ultimately tracking the impact of 75 million donations in the United States.
In times of economic uncertainty, when investors are more hesitant to support new endeavors, built-in metrics can help organizations’ work speak for itself.
Purpose drives people and profit.
The evidence is clear; implementing goals should be a cornerstone of any business strategy, especially during a recession. Because by distilling purpose, leaders can work on the interests of all stakeholders by building a company that supports engaged employees, builds innovative products and partnerships that strengthen communities and generate sustainable shareholder success.
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