The marketplace of meaning

How to make money and a difference.

We live in a time when traditional sources of trust and confidence–once provided by institutions such as government and religion–are in decline. People are looking for new ways to satisfy their innate desire to find meaning. Business today is operating in this new marketplace–the “marketplace of meaning.”

For business leaders who understand this modern reality, there is significant competitive advantage. Ethos, an international consulting firm specializing in corporate social engagement–and a division of JWT Worldwide–recently completed a global audit of more than 100 corporations. The audit included a review and analysis of the impact and success of the companies' current social engagement efforts, and also assessed the ability to affect social change while building on the bottom line.

What Ethos found confirmed that breakout leaders and category killers are, increasingly, those who have successfully identified and managed social issues that are intimately integrated into their businesses–in a way that leverages brand equity, consumer and employee loyalty and investment dollars. These leading companies are choosing to take a stand on a social issue–to be meaningful and relevant to their stakeholders–as a source of competitive advantage.

Some prominent examples rose to the top during the research. Starbucks has achieved market dominance by imbuing in its brand not low-fat soy or extra-hot lattes, but social issues such as fair trade, sustainable development, literacy and clean water. Shell is another sector leader affecting positive change, by making sustainable development a fundamental component of its value proposition. British Petroleum is also winning within the global energy sector after successfully reconsidering its future within a marketplace of meaning. Now, BP (which has adopted the slogan Beyond Petroleum) is implementing a long-term strategy for developing renewable sources of energy.

Unilever is succeeding in developing countries by addressing important social issues while also generating significant revenue and opening up new markets. In India, the company's Lifebuoy Swasthya Chetna (translation: “health awakening”) initiative is the single largest rural-health-and-hygiene education program ever undertaken, aiming to reach 200 million people over five years.

GE, another global corporate powerhouse, has ventured into the so-called environmental sustainability zone with tremendous success. To bring to market new technologies that will help its customers meet their pressing environmental needs, the company has devoted considerable business resources to researching and developing environmentally effective and cost-efficient energy products, services and systems. Today, GE has a thriving, distinct business line–called Ecomagination–which is responsible for bringing to market products that significantly and measurably improve customers' environmental and operating performance. Products developed so far include energy-efficient light bulbs, washers that reduce water consumption and jet engines that consume 15% less fuel.

A tremendously successful progression: listen to your clients' needs, devote business and research resources to develop solutions, and in so doing create products that serve clients, the environment and corporate business objectives. The three are not mutually exclusive but, rather, mutually supportive.

Corporations that have committed themselves to standing for something beyond their product–in an authentic, meaningful way–are not only connecting with customers, but they are also changing the way their employees feel about their place of work. Employees–especially the most talented and sought-after–are increasingly behaving like consumers. They are asking direct and difficult questions of their current and prospective employers: What kind of culture do you have? What are your policies and track record with regard to environmental sustainability? Human rights? Labour? Poverty reduction? AIDS and HIV? In short, quality employees are asking: What do you stand for, and why should I work here?

This internal pressure is not lost on employers. In fact, they are acutely aware that the most talented employees are expecting their values to be aligned with their employers' values. Former GE chief executive Jack Welch acknowledged this phenomenon: “For stars, there is a choice. They work for companies that are in accord with their own value systems. If they don't want to work for a polluter, they will not. After all, people want to hold their heads up when they are with their peers.”

This heightened scrutiny of corporations is only part of the story. A critical driver behind the marketplace of meaning is the fact that the people whom businesses hire and those who buy their products have never had as much power and access as they do today. This unparalleled freedom of choice makes it imperative that companies stand up and be counted as champions for positive social change.

Most large companies now release “corporate social responsibility” or “citizenship” reports that address issues of community investment, employee relations, corporate governance, environmental protection and human rights. But in order to succeed in this marketplace of meaning, a corporation needs to have a full-blown “social strategy”–one that connects corporate strategy, brand and social context in a powerful and distinct way.

The Ethos audit clearly demonstrated that those who support social causes in a haphazard manner–such as merely providing funds for a cause, without getting involved in a meaningful way–do not affect sustainable social change, nor do they see a measurable return from a business standpoint.

What Ethos has found may come as a surprise to some business leaders, but there is growing evidence that authentic support of a social issue can lead to both positive change and business results. That's a powerful combination, especially considering that just a short time ago, many companies assumed one came at the cost of the other.