How can businesses in the resource industry become truly purpose-driven?
February 8, 2019
Purpose-driven business is a radical realignment, a new outlook on the way we create value. The opportunities for sustainable growth and change are huge – and nowhere more so than in the resources industry. Our choices about which opportunities we pursue today will shape our future.
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The resources industry is at the start of the global value chain and by definition touches the lives of us all. It makes progress possible by generating the ingredients that make our economies grow: historically, for every 1 percent increase in GDP, resource usage has risen on average 0.4 percent. Resources have brought us the comforts of modern life: oil has given us the freedom to travel, durable and easy-to-use products, mining is at the heart of modern technology, and natural gas and electricity have given us, among others, comfort at home. However, this is not sustainable. The current rate of resource use exceeds the ability of the earth to replenish these resources. We’ll consume three planets worth of resources by 2050 based on the current pace.
This unsustainable core underneath our global economy is increasingly apparent and stakeholders are more and more vocal in expressing their concerns. With social media and digital communication as a megaphone, consumers, workers and investors are demanding that companies take action to accelerate the transition to a more sustainable model of growth, for instance through the move away from plastics and the scaling down of gas.
For the resources industry, this time of disruption presents a great opportunity. Companies that embrace purpose can align the core of their business to new stakeholder expectations. They position themselves into emerging markets and ecosystems that secure growth while also addressing today’s pressing problems. As a result, we see converging business models, often enabled by digital technologies. Accenture is deeply committed to improving the way the world works and lives. We want to make a lasting contribution to a better environment and ultimately, a better future. We believe that through asking the right design questions in everything we do for our clients, we can help accelerate the transition to a more sustainable resources industry.
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This is an invitation to dialogue and co-design.
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Companies are vulnerable to over-reliance on resources. Traditionally, growth has been fueled by increasing input of natural resources and energy that is consumed or transformed to create products and services. As we realize more and more, the access to and use of natural resources and energy needs to be fundamentally redesigned. To continue to fuel growth, we will need to look with a fresh pair of eyes and disrupt the way we think about materials, identify new sources of energy and how to distribute them, and just become much smarter about it all.
A carefully defined purpose can help companies and the teams working within them to navigate deliberately and make design choices that are forward-looking and focused on future resilience.
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Leaders who are deeply connected to a “why” behind their work, are more effective.
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Leaders who are deeply connected to a “why” behind their work, are more effective. They can clearly articulate what makes them feel fulfilled and drives them. They will be able to make more intentional choices with the long-term success of the company in mind and can inspire action in themselves and their employees.
Companies are turning to purpose to retain access to top talent. A new generation is entering the talent pool, with different values than earlier generations. Millennials are seeking work with meaning beyond making money. In fact, over two-thirds of millennials want to make a positive difference in the world (68 percent). They believe that a successful business needs to have a genuine purpose (81 percent) and the values of their employer should match their own (78 percent).
A strong sense of purpose generally fosters new energy in teams. Employees who derive meaning from their work are more than three times as likely to stay with their organizations. Also, they reported 1.7 times higher job satisfaction and are 1.4 times more engaged at work.
Companies without a clear, authentic purpose may have a hard time attracting and retaining new talent. Moreover, it becomes especially difficult to attract the fresh perspectives of the young generation that are critical to pivoting toward purposeful business more effectively. Conversely, operating from a clear purpose will make you stand out in the industry.
Consumers are increasingly basing purchasing decisions on the reputations of companies they do business with. Where price, product and place were once key to winning the hearts of the mass market, increased transparency about what happens across the value chain increasingly matters. Accenture Strategy’s most recent global survey of nearly 30,000 consumers found that 62 percent of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency or fair employment practices. The closer a company’s purpose aligns to their own beliefs, the better.
Investors are also changing their expectations. Rather than looking for the optimal balance between risk and reward, growing numbers of investors are trying to find the best place in the triangle of risk, reward and impact. Moreover, investors are closely watching pressures exerted by consumers and employees, aware that bad publicity, protests or boycotts can erode trust, and affect market value. Purpose-driven companies take a considered approach to social and environmental impact, nurturing a positive reputation based on facts.
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Supplier diversity can help to build a more inclusive economy. Accenture’s Global Supplier Inclusion & Diversity Program connects supply and value chains with businesses owned by women, ethnic minorities, lesbian, gay, bi-sexual and transgender persons and persons with disabilities.Read more
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A purpose journey starts with a simple question - why not design a system that is much more future resilient and innovative? There is a fundamental opportunity for leaders to drive a different design brief. One that starts with the need they are trying to fulfill and is enhanced by different value lenses not only considering the immediate business case but also value created for consumers, workers and other stakeholders. This is also where the alignment between the company purpose and the purpose of the individuals working for them leads to innovative thinking and out-of-the-box solutioning.
A good example of a deliberate design brief that leads to sustainable innovation is DSM-Niaga, a joint venture between Royal DSM and Niaga. They redesign products so that all materials can easily be recovered, to make the products again, and again. Consider how different their products and business model would have been if the design brief had not included circularity. It also shows the importance of taking perspectives that go beyond the company boundary, exploring opportunities that can be addressed when working with partners.
Companies can be held back when they see the complexity of acting on purpose. Transitioning to a purpose-driven business requires cooperation, for instance with supply chain partners to raise standards across the industry, or with regulators to explore and address the societal problems like plastics waste. And it requires new ways of identifying value and measuring success.
A purpose journey can start with small steps, with a clear view on the future that you aspire to and the role of the organization in achieving that. From there it is important to have a discussion about how you can ensure that you continuously move forward, by embedding elements of your purpose into decision making, and continuously adjusting the pace of change. It is important to act – even amidst complexity and uncertainty.
Accenture believes it is possible to lay-out new pathways to growth, creating new business models where prosperity does not cost the planet. It will take courage, effort, inclusion, and foresight. But most of all, it will take curiosity and an open mind to explore the new design brief for the resource industry.
The only way to get to future-proof is by doing things more innovative and sustainable. We need your insights and your vision to get there. So, we look forward to you accepting our invitation for dialogue and co-design. Will you join us?