While the business of sport is hyper focused on installing the next shiny piece of technology to help enhance the fan experience – the so called holy grail of the sports business – conscious business leaders around the world are ensuring that their businesses remain relevant to an ever evolving consumer landscape in which people increasingly expect the businesses that they support to do good while doing well. In the process, Purpose is steadily emerging as the management philosophy of the 21st Century and the definition of success being redefined for corporations worldwide.
Numerous findings from respected organisations including EY, Harvard Business Review and PWC now unequivocally support the business case for Purpose while the mainstream media is reporting on Purpose with increasing regularity as evidenced by Fortune’s 2016 Changing the World list. Purpose has arrived. No study is more supportive of this phenomenon than that undertaken by former P&G Global CMO and author of Grow, Jim Stengel. In his study, conducted on a global sample of 50 000 brands over 10 years with research house Millward Brown, Stengel found that the 50 highest-performing businesses surveyed were those driven by brand ideals centered around a Purpose of improving people’s lives. These 50 brands grew three times faster than their competitors and outperformed the S&P 500 by some 400 percent.
Central to the success of these Purpose-full businesses is the decision they have taken to embed a purpose as a key strategic business driver for their organizations….not just as an underfunded “nice to have” CSR, corporate relations or philanthropic initiative. In these Purpose-full organizations, often led by Purpose centric CEO’s, Purpose is central to every decision the organization makes and leveraged as a platform to drive revenue, profits and sustainable growth for the organization…to do good and do well…..to answer the question “why are we in business and why should anyone other than our shareholders care”.
Another emerging trend across the business sector that validates this move to Purpose is the growing number of businesses that are adopting B Corp certification, the fair trade mark for business. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. There are currently over 1966 certified B Corps hailing from 50 different countries and 130 different categories but all with one common goal – to use business as a force for good.
What is driving the move to Purpose?
The major driver of this new Purpose-full approach to business is an evolving expectation amongst a growing demographic around the world who are looking to align themselves with and support purpose-full organizations. This demographic, which research house Globescan have labeled as the Aspirationals and which comprise some 39% – or 2.5 billion people – of the global population, is represented across every age, culture, geography and income level…they are not just millennials. Aspirationals matter because they are the first demographic to unite materialism, sustainability values and cultural influence which makes them an essential audience to corporations wanting to build markets, influence cultural norms and shape behavior change at scale.
The Age of the Aspirationals is further evidenced in numerous consumer studies which show a growing expectation amongst a huge percentage of the population that expects brands to behave responsibly and be net positive contributors to society, the fact that these same people are prepared to support those corporations that do so and that believe that it’s OK for purpose-full corporations to make money while doing good.
In the most recent Edelman Trust Barometer report, 80% of respondents indicated that they believed that business must play a role in addressing societal issues. According to the 2015 Cone Global CSR Study, 91% of global consumers expect companies to do more than make a profit, but also operate responsibly to address social and environmental issues; 84% say they seek out responsible products whenever possible; 90% would boycott a company if they learned of irresponsible or deceptive business practices.
And it’s not just consumption preferences that are evolving, people also want to work for organizations that are purpose driven. According to PWC’s “Putting Purpose to Work” study, 83% of employee’s are looking for meaning in their work, 56% are looking for a strong sense of community and 53% are energized knowing that their company is having a positive impact in the community. So purpose is becoming a major factor for people as they decided which companies they want to work for.
So, what’s this got to do with the business of sport?
The business of sport is not immune to this changing landscape and should, I suggest, expect to be impacted in at least the following ways.
Given the rate of adoption of purpose by the corporate sector, I envisage that purpose-full corporate sponsors are going to be increasingly looking for ways to activate their purpose through sports sponsorship platforms that are aligned with their values. In such an environment, the underlying authenticity of a sports property will become of paramount importance as will its ability to support purpose-full story doing opportunities as opposed to just story telling activations. Sports properties that offer their sponsors this opportunity will thrive.
Recent evidence supports a view that Purpose-full corporations are increasingly wanting to align with sports properties that share their values and commitment to improving people’s lives….and distance themselves from those that don’t. Coca-Cola’s response to the recent FIFA governance debacle is one good example of this – they were prepared to walk away from a 40 year relationship with one of the most valuable sports properties in the world given the risk that this relationship would undermine the brands efforts to authentically behave as a purpose-full brand. Corporations will start to walk away from sponsorships that undermine rather than support their commitment to doing good and doing well.
This change has not escaped the attention of PWC who in their 2016 Sports Outlook reported that they expected there to be an increasing prominence of community based sponsorships in the coming years. PWC projects these will grow by +400% over the next four years to almost 5% of total sponsorship spend and $1 bn in value. According to PWC “segment composition will shift going forward with the digital and community categories projected to increase collective share of the segment from 20 percent to almost 34 percent during five-year period as new sponsor dollars materialize and existing commitments are repositioned.….Brand sponsorship of community relations or foundation activities are projected to increase as the industry’s brand partners face increasing stakeholder scrutiny of marketing and hospitality spend; resulting in alternate methods of engagement targeted to preserve relationships and brand affiliations with sport”.
The fans have also shown that they can vote with their wallets. The pictures from M&T Bank Stadium in Baltimore of over 7 000 fans handing back their Ray Rice branded merchandise after the players disgrace for domestic violence abuse should be a stark wake-up call. We will start to see fans voting with their wallets and supporting purpose-full teams or athletes despite their level of performance on the field….and not supporting those that aren’t purpose-full.
And athletes are also starting to step up the ante as evidenced by San Francisco 49’ers quarterback Colin Kaepernick who leveraged his NFL platform and voluntarily put himself in the public eye around an issue other than football. Kaepernick refused to stand for the playing of the national anthem in protest of what he deems are wrongdoings against African Americans and minorities in the United States. His actions sparked national debate on the issue and inspired many other athletes at all levels of competition to join the protest. The 49’ers and NFL subsequently came out in support of Kaepernick’s actions, in itself a significant endorsement that the move to purpose is underway.
And more and more people, particularly amongst millennials, will chose to work for purpose-full organizations making the search for talent an ever increasing challenge for organizations that leave purpose at the door.
So, how is the mainstream business of sport responding to all of this?
Given that not a single sports team, league, event or venue is included in the list of certified B Corps or included in the Fortune 2016 Changing the World List, one can make the case that the mainstream business of sport is losing touch with what’s happening in the world when it comes to Purpose.
My overriding observation is that the general management philosophy currently applied across the sports sector is still based on business practices that are quickly being transcended by enlightened corporations and their leaders.
With some notable exceptions, the focus is still very much on creating shareholder value above all else. While sport has for many years focused on giving back through well intentioned “1%” philanthropic, community relations and CSR activities these activities tend not to be core to their businesses and generally not leveraged to drive significant revenues or growth for the organisations.
I think it’s time for the business of sport to ensure that it remains relevant to corporate sponsors, fans, employee’s, athletes and society as a whole. It can do so by innovating its business model to redefine what success looks like by moving beyond philanthropy, community relations and CSR as a tactical activity to embrace purpose as a key strategic business driver…to doing good and doing well….to making the business of sport matter.
Why? Because purpose provides an amazing opportunity for meaningful growth across the sector that can also further embed sports as a key player and contributor in the race towards a sustainable future. And because not doing so poses a huge risk to the current sports revenue model that sport relies upon so heavily. The business of sport can respond by choosing to embrace these changes or ignoring them at the risk of their long term sustainability.
The Business Of Sport Can be Purpose-full
The exciting news through all of this is that it is possible for sports to embrace this purpose-full management philosophy. The Super Bowl 50 Host Committee embraced these insights and developed their strategy for Super Bowl 50 around a purpose of leveraging the mega event as a platform to benefit the entire Bay Area, in particular to improving the lives of young people living in underprivileged areas. In order to live up to its self-declared purpose, the Host Committee made a commitment to deliver Super Bowl 50 as the most shared, most participatory and most giving Super Bowl in history…and to do so in a “Net Positive” way – socially, environmentally and economically.
The strategy delivered a number of first and proved the business case for a purpose-full approach to a major sports event that we hope will now be replicated by others in the future. It’s a great case study of what’s possible when the leadership of an organization embraces a purpose of improving people’s lives as a key strategic business driver. In full disclosure, as Co-Chair of the Super Bowl 50 Sustainability Sub Committee and Sustainability Advisor, I was a member of the team at the Host Committee that developed this strategy.
Based on the success we enjoyed with Super Bowl 50, I’ve decided to double down on my efforts to help the business of sport along its path to purpose and today am proud to launch Purpose + Sport whose purpose is to redefine what success looks like for the business of sport.
Purpose + Sport provides strategic, commercial and engagement solutions to rights holders, sponsors and athletes who want to embrace purpose as a key strategic business driver to deliver more meaningful growth for their organizations….to do good and do well.
For rights holders our focus will be on helping them to embrace purpose as a key strategic business driver to grow the value of more purpose-full teams, leagues, events and venues. For sponsors it will be about helping them to activate their purpose and amplify their sponsorship ROI through more purpose-full “story doing” sponsorship programs. And for athletes, it will be about helping them to shape more purpose-full careers that enhance their value on and off the field.
We invite conscious leaders across the business of sport to step up and join the other conscious leaders we are already working with at Purpose + Sport and embrace this opportunity. We’re here to help you along your path to purpose…to do good and do well.