The Key to Finding Your Company's Mission? It's in Your 'Also.' To build a future-proof business, integrate social impact into your business purpose.
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"Gam vegam"— it's something I often hear when I'm walking the streets of my home city of Tel Aviv. It means "also and also," a way to explain two things that, on the surface, might be contradictions. This and that.
As a co-founder of Venn, a company focused on strengthening connections among neighbors, it was obvious pretty early on that our company's "also" would be social impact — something that's been part of our mission and even our company's inspiration from the very beginning.
When we launched five years ago, this was a radical idea to a lot of people we met — including investors. Today? Investors now try to guess the long-term profitability of a company by scoring its efforts in terms of sustainability and social responsibility. The word is out that companies with good ESG (Environmental, Social and Governance) credentials perform better.
In a Gen-Z world, lead with your "also"
Thanks to the influence of Gen Z and millennials, purpose and profit are now more entwined. Today, 80% of purpose-led brands outperform the market. It's no secret that companies need to be about more than just the P&L in order to attract top talent. More and more, millennials won't take a job at a company if it doesn't have values aligned with social responsibility. They'll even take a pay cut if it does.
And these shifts have accelerated in the post-pandemic world, where consumers say that the pandemic made them rethink what's important to them in life and how they spend their money. Just look at some of the brands that have emerged as leaders during this challenging time — including buzzworthy new brands that have managed to cut through the noise. They all have something notable in common: They're driven by their "also." And that "also" is social impact.
Take Chewy, for example, the ecommerce one-stop-shop for pet owners that also happens to be among the fastest-growing online retailers. Last year, the company partnered with the Humane Society to donate $1 million in food and supplies to rural areas impacted by Covid-19. Or meditation app Headspace, which helped people cope with pandemic stress — and also gained users — by offering free subscriptions to unemployed workers and first responders. Warby Parker has always integrated "also" into its brand identity with its "Buy a Pair, Give a Pair" model. Last year, the company experienced a surge in demand for its online services. It also partnered with VisionSpring to distribute PPE and relief kits to more than half a million people in high-risk countries.
Impactful? For sure. But these efforts wouldn't have been as successful if they didn't fit in with each brand's unique "also." For Chewy, it's animal care. For Headspace, it's mental wellbeing. In an era where every CMO is terrified of the word "cancel," consumers are quick to point out efforts that come off as greenwashing or just empty promises. But when a brand taps into the passion points of its consumers, it can rise above the noise.
Just look at Sephora. Last year, the company responded to accusations of discrimination in its stores with meaningful action. The brand launched a study on racial bias in retail, resulting in sweeping changes that experts say will lead the industry. Sephora also learned that its consumers sought more representative products, including the full array of Black skin tones. Today, Sephora is part of the 15 Percent Pledge, dedicating 15% of shelf space to Black-owned beauty brands, and it has expanded recruiting efforts for Black entrepreneurs.
Doing good is good for business
With younger consumers demanding that brands align with their values, it's not surprising that some legacy companies are now wearing their "also" as a badge of honor. Ben & Jerry's is 50 years old, but with its unflinching political stance, recently launching a new flavor and action campaign supporting criminal justice reform, it's right up there with Glossier and Zoom in terms of relevance. Patagonia has always been on the cutting edge of sustainability efforts, but last year it doubled down with an upcycling initiative that could flip even the most skeptical consumer.
At Venn, the seismic shifts we've all experienced over the past year have only deepened our commitment to social good. As "The Neighborhood Company," we improve real-life connections for our neighbors, while at the same time increasing demand, retention and net operating income (NOI) for our real-estate partners. This means more people want to come, stay and shop local. Our "also" means we're able to combat loneliness on a larger scale, even as we serve our real-estate partners.
For us, doing good has been good for business. And we're not alone. With social impact now a key driver of business success, Nasdaq president Adena Friedman has said, "2020 is increasingly looking like it may be the "tipping point' year for ESG investing." Today, 70% of people want to know how brands are addressing social and environmental issues. And it's a trend that's not likely to slow down as we all figure out the "new normal" of post-pandemic life.
When they launched in the 1970s, Patagonia and Ben & Jerry's weren't as vocal about their social-impact efforts. Today, it's the entire conversation. And that means business results: 90% of consumers today say they're more likely to shop from companies that take a stand on social matters, and 80% say they'll even pay more for products from such brands.
How to define and execute on your "also"
When founders define their "also" from the very beginning, it serves as a company's North Star. Social-impact results are now the metrics that investors are most interested in talking about. In fact, social-impact potential has become a way for VCs and investors to figure out which startups to fund.
By being clear about your "also" from the beginning, you'll align with the right investors who share your vision, which is crucial as a company grows. You'll bring in partners and recruit talent who share your values. All of this will help you and your partners stay on track with your goals. And you may even do some good while you're at it.
Clearly, the business world is shifting. And we're all looking at success differently — whether it's from the viewpoint of a founder, investor or consumer. With social impact fused into our definition of success, we're sure to see more companies setting ESG KPIs side-by-side with business goals. In other words, not just their "why," "what" and "how" — but their "also."And I'd say that's also a good thing.