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Balancing purpose with profits in the consumer and retail sector

Purpose: the rhetoric vs reality in companies and how does it impact the hiring process.

In a world increasingly attuned to environmental concerns, diversity, and inclusion, I’m, unsurprisingly, seeing greater numbers of leaders wanting to work for purposeful companies.

It’s entirely understandable. Yet, behind the narratives can lie a stark reality —purpose can be conflicted with business practices and profitability.

◾️ All of this can flow down directly to employer brand.

◾️ So where is the balance for companies to strike?

Unilever’s former CEO, Alan Jope pursued a strategy where all its brands should stand for something, which was met with shareholder criticism in the light of disappointing growth. Jope’s successor Hein Schumacher, told investors recently that purpose can be an ‘unwelcome distraction’ for some brands and ‘irrelevant’ for others.

Many companies have no choice but to find a profitable path to being sustainable. Customers demand it, but even that can vary depending on what part of the world you operate in.

Lego’s recent setback to use recycled plastic bottles is a stark reminder that the journey towards incorporating a sustainability-focused purpose is fraught with challenges. In Lego’s case, pursuing a seemingly more sustainable option contributed to a higher carbon footprint.

Many companies proudly proclaim a dedication to purpose and incorporate sustainability into that purpose, but it can be far more complex in practice.

There is plenty of greenwashing experienced – I observe prospective hires quickly seeing the reality of a purpose-driven brand lacking substance.

Leaders’ actions must align with their words and company taglines. This is especially the case where social media can play a powerful role in brand image. Ask Bud Light, which suffered a social media backlash for taking what was deemed an insincere ethical stance.

My own view is that CEOs and their leadership teams must be honest about where a business is at. Don’t oversell a commitment to a purpose such as sustainability when it leads to a disconnect from the reality of your operations. It can quickly disenfranchise your people, and that trust can take years to restore.

And for prospective hires, there does need to be a level of pragmatism. What is the scope for you to influence a purposeful agenda – even if the company still has some way to truly regard itself as such? It could be a case of you assessing the company’s readiness versus its capability. From there, you can understand if your priorities and experience fit.

◾️ How do consumer and retail companies balance purpose with profits?

About BartonRock: BartonRock is the executive search partner for high-growth consumer and retail businesses

We manage the careers of executives whose know-how and commercial acumen steer the strategic direction for companies to thrive.

Our assignments search for executives who understand how to operate in dynamic and entrepreneurial environments.

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