Morality here means responsibility, transparency, inclusivity and proactivity, but not at the expense of profitability.
Morality and business might seem an unlikely pairing. We’re used to the jargon of ‘good business’, where the ‘good’ is defined by corporate stakeholders and is implicitly synonymous with ‘profitable’. But moral business is different. Here, consumers are the ones driving the measure for success and failure.
As our awareness of our impact on the planet seeps deeper into our collective consciousness, and social, political and technological injustices make the headlines each day, consumers are beginning to make purchasing decisions based not just on financial or brand value, but also on ethical value. As a 2017 Unilever study shows, one-third of consumers (33%) are now choosing to buy from brands they believe are doing social or environmental good. This means that 33% of a potential market may be actively rejecting your brand if it is not acting in this way.
With the rise of this conscious consumer, morality is fast becoming a business imperative. Here, ‘morality’ means responsibility, transparency, inclusivity and proactivity, but not at the expense of profitability. Certainly, the challenge can feel daunting as it often involves extensive logistical and structural change, and return on investment is not immediately evident. But businesses must change their mindset and measures of success when it comes to investments, innovation and growth.
We are fast approaching a point when the key question for businesses is not just ‘how much money can we make?’ but also ‘if we fail to act morally, how much do we stand to lose?’
So what would moral business look like? We explored the topic of the Moral Uprising in our recent Trend Briefing and have highlighted three key shifts to offer direction to businesses as they adapt to the future landscape:
From campaigns to campaigning. Morality is not a label or a marketing strategy. Consumers want to see businesses proactively championing causes, something that Patagonia has a long history of doing. Its Patagonia Action Works microsite brings together activists from the local community and helps grassroots groups to apply for funding. The endeavour, while completely separate from the brand’s core business, is fully aligned with its brand purpose. It is Patagonia’s morality in practice.
From zero impact to positive impact. Sustainability is now a basic expectation and, increasingly, consumers expect businesses to engage in actively improving their category. For more than a decade, Levi’s has been investing in doing just this. Its Water<Less initiative has saved more than 2bn litres in the denim-making process to date, and the brand has shared its methods to inspire industry-wide progress. Levi Strauss & Co reported a 7% net revenue increase in fiscal year 2017, proving that morality does not need to come at the expense of profitability.
From artificial intelligence (AI) to intelligent augmentation (IA). Technology has been hailed as the solution to many problems, but its unregulated omnipresence is fuelling a growing sense of distrust. Businesses need to humanise and demystify the cold world of data and technology, and introduce a sense of emotion and sensitivity that is now beyond the reach of pure mechanical logic. Ikea’s innovation lab Space10 is exploring this through its Do You Speak Human? project, an online survey that asks consumers questions about how they would like AI to communicate in the future. By crowdsourcing opinions and actively looking to create nuanced AI interactions, Ikea is breaking the Silicon Valley coding echo chamber, collaborating with consumers to create something shared rather than dictated.
We are fast approaching a point when the key question for businesses is not just ‘how much money can we make?’ but also ‘if we fail to act morally, how much do we stand to lose?’ In the case of the Volkswagen emissions scandal, it was a cool £12.7bn ($18bn, €14.5bn). It will cost businesses either way, so why not choose to pay in rather than pay out?
Book a strategic consultation to learn more about how morality, Subconscious Commerce and post-growth metrics are defining the future of business. Find out more here.