As purpose-driven work becomes central, the relationship between investors, or sponsors and NGOs, will become more professional.
By Carol Cone, Global Practice Chair, Edelman Business + Social Purpose and the B + SP Leadership Team
Yesterday, we discussed three overarching global trends that we believe will increasingly define purpose strategies in 2014, based on findings from the latest version of the Edelman Trust Barometer. Today, we shift our focus to four key regions: the United States, Europe, Asia and Latin America.
Purpose in the United States
1. Corporations will increasingly influence the public sector and lead societal change.
Not only does the general public expect this, according to Edelman’s 2014 Trust Barometer, but it is also driven by companies’ business goals. While traditional government funding for public services, such as education, continues to fall off in many local and state governments, the opportunity for private sector players to fund and influence public services will continue to rise.
In the state of Washington, for example, the growing technology sector lacks local STEM-educated workers and has to import employees from other states and countries to serve their needs. As a response, Washington-based companies have been actively investing in STEM education initiatives to help create a local workforce that can meet the rising needs of the tech sector.
2. Health will become major focus of purpose programs as an upshot of the Affordable Care Act (ACA).
Following the implementation of the ACA, frequently referred to as Obamacare, we will see a big push to improve the health of the American lifestyle through new purpose programs (another example of corporate influence on the public). Helping people to live healthier lives clearly reduces their overall burden to the healthcare system thus lowering costs of care. In the upcoming year, expect to see a variety of healthy-lifestyle programs piloted and perhaps some larger-scale efforts sponsored by major insurers.
Purpose in Asia
1. Asian corporations are investing outside their home market.
The psychology of the Asian multinational corporation (MNC) has changed. Given many of their now formidable sizes – from Samsung (disclosure: client) to Tencent (disclosure: client) and Uniqlo – these companies do not view themselves simply as Asian companies, but rather global leaders. As a result, the C-suite at these companies expects to operate at global best practice levels, including the areas of CSR, sustainability, and social purpose. In 2014, therefore, expect to see Asian MNCs make significant investment increases in purpose outside their home markets. Recent examples include Samsung’s sizable investment in Hong Kong for its 2013-2014 ‘Solve for Tomorrow’ environmental campaign.
2. NGOs continue to rise in Asia.
Edelman’s 2014 Trust Barometer shows that NGOs were the most trusted institution in Asia. Expect there to be even higher levels of trust in NGOs in the upcoming year. Broadly speaking this can be attributed to the “professionalization” of NGOs in the region. That said, the specific reasons for this lift in NGO trust vary from country to country. In Indonesia, for example, a combination of final round government budget disbursements (partly through NGOs), and increasingly stringent donor country expectations (especially those from Europe) is putting pressure on NGOs in Indonesia to channel funds more responsibly, improve governance structures, and advance ethics and transparency practices.
Purpose in Europe
1. Get ready to hear a lot about Inclusive Capitalism.
As Europe attempts to trip and stumble out of its most sustained economic recession in modern times, there is a growing chorus of influential voices calling for a rethink on how business operates. Pope Francis has chosen to make fighting poverty and inequality the official platform of his papacy, launching an 84 page "apostolic exhortation" criticizing unfettered capitalism as "a new tyranny" and attacking the "idolatry of money." But many European business leaders are themselves joining the chorus calling for a review of the pure focus on financial performance that drives corporate value.
Think tanks and other organizations, such as the Blueprint for Better Business, and the Henry Jackson Initiative, are able to draw from the highest levels of political and business leaders to discuss the alternatives to the current system – Inclusive Capitalism will overtake Creating Shared Value as the purpose "buzz" term in 2014.
2. More “in my backyard” than “NOT in my back yard."
Related to the pain of the recession and associated unemployment – especially among Europe's youth – consumers and employees are putting their communities first. They expect brands to help the people suffering around them before supporting programs in other parts of the world. Spanish consumers, for example, will lean heavily toward brands helping create jobs for their unemployed youth. Renault and Nissan are in the process of creating almost 2,500 jobs in the Basque region, and fully expect this to drive Spanish sales as well. Global programs are fine, but European consumers are making clear that charity needs to begin at home.
Purpose in Latin America
1. Purpose is shifting to the core of business strategy.
Social and environmental issues are being ever more integrated into core business strategy, rather than being a separate piece or specific department. This is leading to changes from the inside out as purpose strategy influences companies’ internal processes. In addition, the focus on purpose-driven strategy is impacting employees’ behaviors and expectations (and their managers’ expectations). In 2014, organizations and brands will increasingly internalize the purpose message and employees will be tasked with promoting and defending the message, making the brand's values authentic and credible.
2. Higher stakes are leading to increased seriousness of investment and attitude.
As purpose-driven work becomes central, the relationship between investors, or sponsors and NGOs will become more professional, leading to stronger ties and dialogues. In 2014, organizations and brands will invest more in training leaders of purpose programs to ensure high quality outcomes and impact. This also means that companies will be ever more attentive to stakeholders’ opinions as they look for closer dialogues and stronger partnerships. By immersing in a social or environmental issue and producing quality content, companies are becoming catalyst agents as they engage their audiences.
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This post is produced by Edelman Business + Social Purpose leaders, a team of global idealists, creative communicators and constant challengers to the status quo.