Insights from the 2022 Purpose Power Index

Insights from the 2022 Purpose Power Index

In the business world, “purpose” was all the buzz in 2022, impacting everything from hiring and retention to productivity and profits. Purpose was such a big deal that it became the subject of numerous research projects with striking findings. For example, Great Place to Work reports that team members who find purpose in their jobs are three times more likely to stay with the company. McKinsey & Company says “purposeful” employees are four times more engaged. Cone/Porter Novelli found that 66% of consumers would switch and 57% would pay more for a purpose-driven brand. And Dynata calculated that 85 million U.S. consumers make buying decisions based on brand purpose.

Given the significance of purpose, let’s see what we can learn from the 2022 Purpose Power Index, an annual ranking of companies based on consumer and employee perception of their commitment to:

  • A higher purpose other than profit
  • Improving lives and communities
  • Benefiting society, not just shareholders
  • Bettering the world

Right off the bat, I was struck by the highlights noted in the report’s executive summary:

More large, mainstream companies made the list than ever before: 16 of the top 20 are big brands like GE and Google. Perhaps that’s in response to consumer demand and an expectation that all brands take a stand, not just niche ones like Etsy and Allbirds.

10 brands joined the top 20 for the first time, including Wegmans at number seven! I wonder if that’s more evidence of the increased awareness and importance of benefiting society over benefiting shareholders.

The pandemic helped certain brands, like Zoom and Pfizer, skyrocket up the charts. I think people in general are grateful for the products and services that helped them stay connected and safe.

Car companies rose through the ranks, with Tesla, Toyota, Ford and GM all shooting up from their previous year’s score. Maybe that’s because of increased offerings and changing perceptions around electric vehicles — and automakers targeting their marketing to address concerns about climate change.

Of all the high-level findings, one is especially important to my workplace culture-centric heart: The research shows that sense of purpose drives employee motivation, engagement and job satisfaction — but significantly more so for senior management than everyone else. Most upper-level managers think their company is doing a good job acting on its purpose. Only 35% of junior staff feel the same. More striking: 72% of leaders say their company’s purpose motivates them to get up and go to work each day. Only 45% of frontline workers say so.

To close that “purpose gap,” leaders need to communicate and bring their company purpose to life for all team members, connecting each person’s individual role to the collective purpose. In other words, we need to do more than just define our purpose. We need to walk it, live it, activate it. Or no one’s going to buy it. So, let’s take a look at how some top purpose companies act on their purpose, both as businesses and employers.

Walk the walk

No. 1 for the second year in a row, Seventh Generation does more than improve lives with affordable, eco-friendly products. It educates consumers and advocates for climate justice to try to make our communities healthier, sustainable places. The “Get involved” section of Seventh Generation’s website includes information and resources like sample letters and links to politicians’ emails. The company’s Zero Waste Challenge outlines its commitment to making all packaging, materials and sourcing 100% biobased, reusable and reused, recyclable and recycled, or biodegradable and degraded by 2025.

Fun fact: Seventh Generation is owned by Unilever, which also makes the list, along with its other top purpose brands, like Ben & Jerry’s and Dove. Makes me think Unilever might earn an even higher ranking next year as its brands continue to publicly demonstrate and reinforce their purpose.

Outdoor product companies like Patagonia, North Face and REI may have an easier time building an authentic brand purpose because their products and services help support an active, healthy way of life. No. 17 on the index, Patagonia, goes beyond that. Its founder, Yvon Chouinard, committed to donating 1% of sales to environmental causes and co-created 1% for the Planet, a global movement and impact fund that now has more than 5,000 members.

At REI, 10th on the list, there’s no question who’s boss. Team members and customers aren’t concerned about the company prioritizing shareholders, because as a co-op, employees and members are REI’s only stakeholders. No wonder the company’s policies and processes are all about building community and awakening “a lifelong love of the outdoors, for all.”

To do this, REI brings people together for classes and advice, group activities and inspiring stories. It invests 70% of annual profits into the outdoor community through member dividends, employee profit-sharing and retirement plans, and nonprofits dedicated to the environment. And it gives employees the busiest retail day of the year off to #OptOutside with friends and family on Black Friday.

Purpose-filled from the inside out

Of course, having “a higher purpose other than profits” extends internally, as well. You need to involve the entire organization in your purpose-driven activities. Leaders, managers and supervisors need to continually express and model the company purpose. More important, they need to ensure team members see how their contributions help advance it — and how everyone benefits from it. That includes developing policies and processes that help improve employees’ lives along with those of customers and community members.

Wegmans is a great example. The company focuses on helping employees develop and grow, investing more than $50 million every year in its scholarship program, online trainings and workshops, cooking technique certifications, internships, and management trainee and leadership programs. The ripple effect of those opportunities promotes upward mobility in families and communities.

TOMS, ranked #2 on the 2022 Purpose Power Index, puts its money where its mouth is when it comes to supporting employees and their communities. The company invests a third of its profits in “grassroots good,” supporting ground-level solutions with cash and long-term, hand-in-hand support. Every other month, team members can apply for a $10,000 grant to donate to an organization they’re involved with. And every year on Giving Tuesday, all TOMS employees spend the full workday volunteering for local nonprofits.

These initiatives are like a few of ours. All DS+CO team members can take a “Make it Happen” day off each year to volunteer in their community. Every month, we recognize and reward an employee with a contribution to the charity of their choice. We encourage and give team members the time necessary to serve on not-for-profit boards and committees. And as a company, we participate in more than 70 charitable events throughout the year, including Habitat for Humanity building days, the annual Heart Walk, United Way fundraisers and the MCC Gala.

But back to TOMS. Of all its purpose-driven activities, I’m most impressed with the company’s enduring commitment to becoming an anti-racist organization. Every employee participates in the ongoing work, which includes partnering with a diversity, equality, inclusion and accessibility (DEIA) consultant to provide training and evaluation, creating a DEIA Advisory Council to guide decisions, hosting an annual “Anti-Racism Day of Learning” and reporting progress on DEIA initiatives in the company’s annual Impact Report.

We’re working on this, too. Our own Mike Schwabl, board chair of Rochester Hope, helped launch the monthly First Saturday Service Festival to bring free social supports to one of Rochester’s poorest neighborhoods. We’ve got a ways to go, but by connecting with area schools and organizations like Urban League, we hope to help our industry become more diverse, equitable and inclusive. By hosting free Black Businesses Matter workshops and providing marketing tools, we aim to address inequities in opportunities. By creating an IDEA (inclusion, diversity, equity and action) panel to review our projects, we strive to eliminate bias in our work.

All these activities ladder up to our company purpose. Our “why.” As they do at Seventh Generation, TOMS and all the top Purpose Power Companies. And they aren’t performed in a vacuum. They touch and involve our entire company. That’s important, because when every team member sees their purpose is part of the brand’s purpose, and every customer recognizes and values it, well, that’s a successfully activated purpose. And that’s our purpose, isn’t it?

Lauren Dixon is board chair of Dixon Schwabl + Co., a marketing communications firm, which has  been honored as a Best Place to Work.