Why Millennials Care About Purpose-Driven Business

Sam Yeoman

Today’s tumultuous economy makes running any successful business seem like a herculean task. Yet a new wave of purpose-driven businesses are not simply surviving, they are thriving despite a fickle economy.

So who’s helping some of the most purpose-driven enterprises become wildly successful while others have shriveled up and withered away? Who cares about purpose-driven business and why? Who should businesses target in order to engage the most potential consumers in 2017?

One of the answers lies with the generation that recently passed the Baby Boomers as the most populous one on the planet: millennials.

The coveted consumer

I am a millennial. My generation is also known as Generation Y, Echo Boomer, or Generation ME. The world likes to describe me as an easily distracted, politically correct, civic-minded, creative narcissistic who wants a trophy just for showing up. I am supposedly a seeker of the authentic and an entitled “adult” who was born between the years of 1981-1997.

These labels are often slapped on anyone who looks relatively young, and they distract from what my generation really is all about and our unique position in the today’s economy. The reality is that millennials are currently the largest generation in the world’s workforce, and with the New Year looming, we are projected to have the most spending power of any generation in 2017.

So where are millennials spending all their hard-earned money and why? Millennials support companies that commit to a higher purpose and are more inclined to buy from a brand that stands on a foundation of corporate responsibility. For instance, 87% of millennials say that they base their purchasing decisions on whether or not a company makes positive social efforts.

Therefore, we are more likely to shop at natural or organic grocery stores like Whole Foods than at supermarkets or wholesale warehouses. We prefer to choose a transparent farm-to-table restaurant to chains like Sizzler or Houlihan’s. We train for months and pay for entry into grueling marathons, but only if there is a just cause attached. (Why would we subject ourselves to something that requires anti-chaffing nipple tape unless it was for a good cause?)

Here’s our “why”

To truly understand why we are the way we are you need to know what we fear, what we love, and what stokes the coals that fuel our motivations and ignite our passions.

First, we grew up watching our parents hang up on countless telemarketers, so we quickly became wary of anyone trying to sell us something. Our aversion to being scammed transformed us into wannabe rent-a-sleuths, fact-checking every word until our collective thumbs tired out.

Second, we are the first generation to be raised with portals to unlimited information in our pockets, able to Google anything dubious on a whim. We’ve been programmed to seek out sources of truth and spend our days seeking transparency above all else.

And finally, we watched our parents’ savings and retirement funds crumble during the worst economic collapse in U.S. history since the Great Depression. And we nervously bit our nails, trying to comprehend how we could feasibly dig ourselves out of student loan debt as we walked the plank of graduation, diving headfirst into a struggling job market. Watching the hit our parents took while transitioning into the workforce during the Great Recession trained our generation to be frugal with our money and made us question our spending habits. 

All of these experiences are universally millennial as well as crucially formative to shaping the psyche of our generation. 

Finding our purpose

Above all, I must say that we are a generation that was taught to question our world, and man, if our teachers could see us now. And although it might make my generation seem difficult to deal with, we can only shrug and respond that we are simply products of our respective environments, experiences, and upbringings.

The constant search for authenticity and truth is one of the fundamental reasons why I believe we gravitate – both personally and professionally – toward purpose-driven businesses. While many of us are still searching for our purpose in this wild world, we support and respect any enterprise that pursues a purpose as relentlessly and as passionately as we do each and every day.

We are attracted to businesses that have the audacity to puff their chests out and show their true positive purpose for all to see. Fortunately, companies like SAP are already flexing their purpose muscles – and millennials like me are taking notice.

This blog is part of our Millennials on Purpose series. To learn more about SAP’s higher purpose to help the world run better and improve people’s lives, visit sap.com/purpose.

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Sam Yeoman

About Sam Yeoman

Sam Yeoman is a millennial who engages in purpose-driven marketing for SAP. He is an overall wordsmith with a background in journalism and digital advertising. Sam does everything from curating the purpose and vision section of the SAP Web site to creating engaging Web content with unique perspectives.

Purpose-Led Organizations: Another Buzzword Or Something More?

Yvonne Fandert

Were jobs in the past meaningless before consultants, researchers, and practitioners identified purpose as a critical differentiator for companies to be successful in the digital age?

Is becoming purpose-driven more hype leading to the expectation of increased profit for those who talk about it? Or is there something more substantial behind this new corporate trend?

And if so, how much of it is really new versus old wine in new bottles? And more importantly, what does it mean for us as HR professionals?

According to a KornFerry study, purpose-driven businesses have 4x the compound annual growth rate (CAGR) of companies in the S&P 500 Consumer Sector. Nearly all employees (90%) in purpose-driven organizations report feeling engaged, compared to 32% of employees in other companies. As SAP colleague Florian Kunzke highlighted in this article, purpose makes people 3x more likely to stay in an organization, leading to 1.4x more employee engagement, and 2x more optimistic employees. It also creates 75% more customer retention.

So there seem to be some convincing – profit and nonprofit related – arguments to inspire organizations to become purpose-led.

What does it mean to be purpose-led?

According to Markus Heinen, chief innovation officer of EY, “Purpose is an aspirational reason for being that is grounded in humanity and inspires action.” In other words, an organization needs to stand for something it believes in, going beyond profit and impacting society. This can, of course, extend beyond pure social projects. If a company can direct its vision, mission, and business model towards something that creates purpose, and can demonstrate how their products create purpose, it is even stronger.

Many great companies show a strong focus on purpose, including:

  • Unilever, one of the top-ranked purposeful brands, states that to succeed requires “the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact.”
  • Patagonia, which produces gear and clothes for alpine and outdoor sports, is determined to reduce waste and impact on the environment. Why? To allow its customers and society to continue to enjoy what they are passionate about: the great outdoors. These goals are reflected in the corporate values as well as many processes such as the famous buy-back initiative of used gear.
  • Zappos and its famous “happiness culture” create not only a distinct corporate culture, but also happy, loyal customers. 

The causality and relevance of purpose

Purpose-led companies usually have strong employee engagement that has increased year over year; they also see an increase in retention. Yet, we could conclude that there is a direct correlation between purposeful activities and the impact just mentioned. But would that be “jumping to conclusions”? My personal view is that purpose certainly helps, but profit is essential as well: not only to fund the social projects, but also to keep your employees happy with a fair and competitive salaries. Purpose and profit should not be seen as contradictions, but complementing factors. As research, such as WillisTowersWatson in 2016, shows, base pay/salary is the second top attraction and retention driver.

Let’s have a deeper look at causality: The impact of the unconsciousness on behavior and decisions is not a new study field. If you research the field of social and market psychology, you will find many studies that show how often we behave irrationally, driven by heuristics and emotional arousal. To put this in context: people behave in a way that makes them feel good; they prefer to be around people they trust; they are more likely to buy products in an environment that makes them feel good. This in turn shows that experience is vital. Therefore, it is vital to focus on consumer experience, treating each other as internal consumers, and putting the consumer into the center of everything.

The human wish to do something meaningful is also not new. It seems to be ingrained in our human nature. Asking “what’s the purpose of (my) life” might be as old as human mankind. At the same time, the answer to it will differ depending on the context, circumstances and the phase/situation of life you are in right now. While, for example, after WWII, people in highly impacted countries focused on starting from scratch to survive hunger and get a job to feed their children. Many are luckily now in a much better position. The unemployment rate is low, and for many people, earning money is not enough anymore, as they take it for granted.

Contributing to a higher purpose has become more relevant. Somehow like the pyramid of needs: moving from core needs towards personal growth and development, until contributing to a higher purpose that goes beyond the individual contribution. In addition, experts confirm that we are in a candidate-driven market, in which candidates hold more power than employers, a trend that seems to be deepening. This means that employees have the power to request a deeper purpose from their employers, a situation that did not exist 50 years ago: “Future generations want the organizations where they are spending their time and energy to match their personal values and purpose in life,” according to Nancy Birkhölzer, CEO ixds. This is also underlined by a recent study done by the MRI Network: 90% of all recruiters are convinced that we are in a candidate-driven market.

experts have described the current labor market as “candidate-driven.” Job seekers hold more power than employers, a trend that seems to be deepening

2017 Recruiter Sentiment Study MRI Network

Source: 2017 Recruiter Sentiment Study, MRI Network.

How to drive purpose in organizations

Now after having explored the various impact, and the increasing relevance that purpose has, let’s have a quick look at some general principles and best practices that helps organizations to improve their purpose:

  • Have an authentic purpose that also fits your business model
  • Communicate it to the employees in a clear way -make them believe in it, and let them experience it
  • Have each team, department, and role design their own purpose which serves an overall purpose and let them act according to it
  • Hold people accountable to the purpose
  • Define metrics and goals based on purpose to assess effectiveness

Conclusion

The relevance of purposefulness has increased over the past years. While knowledge about the human mechanics that are running in the background is not fundamentally new, how it’s being expanded into the business world, including profit organizations, is. This has to do with the increasing importance of employer branding to attract but also retain best talents.

Nevertheless, it is imperative to go beyond pure lip service or marketing brand – just writing down a purpose-driven mission statement is not enough. Purpose-led companies need to be followed by consistent leadership behavior, tangible examples, and continuously evolving and adapting strategy and execution along with the rapidly changing environment.

Profit and purpose do not contradict, but they can complement each other. Successful companies will find a way to keep profit and purpose in a healthy balance.

For more on this topic, see Engage Employee Engagement By Connecting Them To Your Company’s Purpose.

This article originally appeared on LinkedIn Pulse.

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Yvonne Fandert

About Yvonne Fandert

Yvonne Fandert is leading the HR Office for the MEE and EMEA region at SAP. She joined SAP in 2006 and held various local and regional HR Business Partner positions, as well as project director positions within HR. She did a Master in Business Administration at the University of Mannheim, Germany, and a Master of Human Resource Management and Coaching at the University of Sydney, Australia. Being a certified coach, Yvonne feels passionate about personal development, and is a firm believer of personal growth via constant learning and self-reflection.

Corporate Social Responsibility: More Than A Checkbox On An Annual Report

Gergi Abboud

I know from first-hand experience what it means to be displaced.

Displaced from everything—your family, your routine, your possessions, your basic amenities. Everything. While I experienced a fraction of what some refugees go through today, nevertheless, it was devastating for my parents and terribly hard for me as a child.

Those images and experiences remain with me. And they serve as an important reality check to remind me of how hard life can get for no fault of your own making. But I was lucky. I had the opportunity to go back to my community, to my country and be welcomed by them. Many refugees today face challenges in developing their own potential and returning to their homes.

As the world faces increasing social, political and economic dilemmas, never before has corporate social responsibility (CSR) been more relevant to businesses as it is today. Business growth is directly linked to smart investments in CSR—which also helps attract and retain customers and top talent.

And perhaps, most importantly, because businesses today are defined by their people, it becomes critical for organizations to support causes that are close to the hearts of their people.

Aligning business objectives with a greater purpose

CSR is no longer a mere checkbox on an annual report. Traditionally perceived as a tool to seek stakeholder approval and trusted brand recognition, CSR has now evolved to become one of the strategic pillars for holistic business growth.

Doing ‘good’ is not only about giving back to community and needs to be an organizational quest for finding purpose that aligns with business objectives. Only then can it leave lasting value and impact for those who receive it. And the ones involved in extending it.

An imbalance of opportunity and need

We live in world of contrasts. People are often polarized between having opportunity and not. A good example of this is the ongoing digital transformation that is sweeping the business world.

For example, Gartner predicts that the region’s IT market in the region continues to grow at 2% in 2017, presenting strong technology job opportunities. Among companies in the Middle East and North Africa, 43% are looking for Junior Executives, according to Bayt.com. And the Kingdom of Saudi Arabia alone is short 37,000 ICT professionals. Similarly, the Saudi Communications and Information Technology Commission states that Saudi Arabia is short of a cumulative 37,000 ICT professionals from 2014-2017.

Potentially, this trend means that all markets will need a steady supply of core computing and coding skills to support this growth—which means more jobs. However, the reality remains far from ideal.

As per statistics from Bayt.com and YouGov, youth unemployment in the Middle East and North Africa is among the highest in the world—23 percent, which is nearly double the global average of 13%. However, that is not due to a lack of workers—it’s due to a lack of workers with the right skills.

Solving real world problems with skilled volunteering

To help address this, let’s think of ways organizations can contribute to lasting social impact. One key way Skilled Volunteering, which allows organizations to harness specifically their skill sets and strengths to add value to CSR initiatives. It helps bridge the social ‘needs’ gap as well as address other real-world problems. And a great live example of this is the Refugee Code Week (RCW).

It uses skilled volunteering to alleviate not only the current, but the future of the refugee situation.  It looks at providing refugees with access to coding literacy. To me, this is the closest thing to a super power than can be taught in today’s digital age. Coding literacy can help empower refugees to become sustainable and employable, and in turn help empower other young refugees in the long run.

Turning refugee settlements into recruitment grounds

How exactly is RCW solving real-world problems? Most obviously, it helps address the refugee condition, giving them hope and empowering a better future for them based on education. It also helps address another serious challenge facing companies and nations today—a crippling paucity of Information and Communications Technology (ICT) skills. CSR initiatives such as RCW serve as the perfect bridge, leapfrogging literacy into employability.

Particularly, coding literacy happens to be the rare skill, that can be taught in a minimal timeframe (as little as 16 weeks) while making people immediately employable. While those being supported gain the necessary skills, companies on the other hand can tap into this massive refugee talent pool and meet their ICT skills shortfall. And the success of our first Bootcamp, with nearly 100% placement of all trainees including refugees, stands testament to the viability of this model.

Education bears the torch

The impact of the refugee situation has been monumental on their lives. Many refugees are not optimistic about their future, and are calling on the global community to come together to find practical solutions to education and careers. However, after volunteering myself, and seeing the heartbreaking situation first hand, I passionately feel that the entire weight of changing the refugee situation hinges on education. Having heard countless moving stories from the camps, I’ve see that the hope in peoples’ hearts is born from one of their most precious possessions carried on them even through displacement—their high school diplomas and educational degrees.

And this gives hope to us as well, to help turn their resentment and negativity into productive time spent to learn skills that can help them integrate better into the community. It gives us direction as corporates, to look at the refugee pool as untapped intellectual potential that can help solve the shortage of ICT skills in the global economy.

And the end objective, is to see these young refugees and youth become social innovators, solving social problems not just with their skills and mindset, but with hope and conviction in their hearts.

With thanks to Batoul Husseini, Global Lead for Refugee Code Week.

For more on this topic, see Can The Social Enterprise Reshape Big Business?

This article originally appeared on Forbes SAPVoice.

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Gergi Abboud

About Gergi Abboud

Gergi Abboud is the Managing Director of the Gulf, North Africa, Levant, and Pakistan regions at SAP. He is responsible for developing the company’s in-country presence and growth strategy, as well as
sales, planning, and marketing activities across these regions. Connect with him on LinkedIn or Twitter @gergiabboud.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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The Human Factor In An AI Future

Dan Wellers and Kai Goerlich

As artificial intelligence becomes more sophisticated and its ability to perform human tasks accelerates exponentially, we’re finally seeing some attempts to wrestle with what that means, not just for business, but for humanity as a whole.

From the first stone ax to the printing press to the latest ERP solution, technology that reduces or even eliminates physical and mental effort is as old as the human race itself. However, that doesn’t make each step forward any less uncomfortable for the people whose work is directly affected – and the rise of AI is qualitatively different from past developments.

Until now, we developed technology to handle specific routine tasks. A human needed to break down complex processes into their component tasks, determine how to automate each of those tasks, and finally create and refine the automation process. AI is different. Because AI can evaluate, select, act, and learn from its actions, it can be independent and self-sustaining.

Some people, like investor/inventor Elon Musk and Alibaba founder and chairman Jack Ma, are focusing intently on how AI will impact the labor market. It’s going to do far more than eliminate repetitive manual jobs like warehouse picking. Any job that involves routine problem-solving within existing structures, processes, and knowledge is ripe for handing over to a machine. Indeed, jobs like customer service, travel planning, medical diagnostics, stock trading, real estate, and even clothing design are already increasingly automated.

As for more complex problem-solving, we used to think it would take computers decades or even centuries to catch up to the nimble human mind, but we underestimated the exponential explosion of deep learning. IBM’s Watson trounced past Jeopardy champions in 2011 – and just last year, Google’s DeepMind AI beat the reigning European champion at Go, a game once thought too complex for even the most sophisticated computer.

Where does AI leave human?

This raises an urgent question for the future: How do human beings maintain our economic value in a world in which AI will keep getting better than us at more and more things?

The concept of the technological singularity – the point at which machines attain superhuman intelligence and permanently outpace the human mind – is based on the idea that human thinking can’t evolve fast enough to keep up with technology. However, the limits of human performance have yet to be found. It’s possible that people are only at risk of lagging behind machines because nothing has forced us to test ourselves at scale.

Other than a handful of notable individual thinkers, scientists, and artists, most of humanity has met survival-level needs through mostly repetitive tasks. Most people don’t have the time or energy for higher-level activities. But as the human race faces the unique challenge of imminent obsolescence, we need to think of those activities not as luxuries, but as necessities. As technology replaces our traditional economic value, the economic system may stop attaching value to us entirely unless we determine the unique value humanity offers – and what we can and must do to cultivate the uniquely human skills that deliver that value.

Honing the human advantage

As a species, humans are driven to push past boundaries, to try new things, to build something worthwhile, and to make a difference. We have strong instincts to explore and enjoy novelty and risk – but according to psychologist Mihaly Csikszentmihalyi, these instincts crumble if we don’t cultivate them.

AI is brilliant at automating routine knowledge work and generating new insights from existing data. What it can’t do is deduce the existence, or even the possibility, of information it isn’t already aware of. It can’t imagine radical new products and business models. Or ask previously unconceptualized questions. Or envision unimagined opportunities and achievements. AI doesn’t even have common sense! As theoretical physicist Michio Kaku says, a robot doesn’t know that water is wet or that strings can pull but not push. Nor can robots engage in what Kaku calls “intellectual capitalism” – activities that involve creativity, imagination, leadership, analysis, humor, and original thought.

At the moment, though, we don’t generally value these so-called “soft skills” enough to prioritize them. We expect people to develop their competency in emotional intelligence, cross-cultural awareness, curiosity, critical thinking, and persistence organically, as if these skills simply emerge on their own given enough time. But there’s nothing soft about these skills, and we can’t afford to leave them to chance.

Lessons in being human

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level – and to do so not just as soon as possible, but as early as possible.

Singularity University chairman Peter Diamandis, for example, advocates revamping the elementary school curriculum to nurture the critical skills of passion, curiosity, imagination, critical thinking, and persistence. He envisions a curriculum that, among other things, teaches kids to communicate, ask questions, solve problems with creativity, empathy, and ethics, and accept failure as an opportunity to try again. These concepts aren’t necessarily new – Waldorf and Montessori schools have been encouraging similar approaches for decades – but increasing automation and digitization make them newly relevant and urgent.

The Mastery Transcript Consortium is approaching the same problem from the opposite side, by starting with outcomes. This organization is pushing to redesign the secondary school transcript to better reflect whether and how high school students are acquiring the necessary combination of creative, critical, and analytical abilities. By measuring student achievement in a more nuanced way than through letter grades and test scores, the consortium’s approach would inherently require schools to reverse-engineer their curricula to emphasize those abilities.

Most critically, this isn’t simply a concern of high-tuition private schools and “good school districts” intended to create tomorrow’s executives and high-level knowledge workers. One critical aspect of the challenge we face is the assumption that the vast majority of people are inevitably destined for lives that don’t require creativity or critical thinking – that either they will somehow be able to thrive anyway or their inability to thrive isn’t a cause for concern. In the era of AI, no one will be able to thrive without these abilities, which means that everyone will need help acquiring them. For humanitarian, political, and economic reasons, we cannot just write off a large percentage of the population as disposable.

In the end, anything an AI does has to fit into a human-centered value system that takes our unique human abilities into account. Why would we want to give up our humanity in favor of letting machines determine whether or not an action or idea is valuable? Instead, while we let artificial intelligence get better at being what it is, we need to get better at being human. That’s how we’ll keep coming up with groundbreaking new ideas like jazz music, graphic novels, self-driving cars, blockchain, machine learning – and AI itself.

Read the executive brief Human Skills for the Digital Future.

Build an intelligent enterprise with AI and machine learning to unite human expertise and computer insights. Run live with SAP Leonardo.


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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu