The world quietly changed on 19 August of this year when the Business Roundtable, a group of 181 of the largest corporations and institutional investors, announced an updated definition of “the purpose of a corporation”.
For decades, they had stated that “the paramount duty of management and of boards of directors is to the corporation’s stockholders”, in short, the only people that matter are investors. But today corporates have been delivered with a new five-point mission:
- Deliver value to our customers
- Invest in our employees
- Deal fairly and ethically with suppliers
- Support the communities where we work
- Generate long-term value for shareholders
Given how much emphasis has been placed on purposeful brands, these points might seem obvious, and you may well be thinking that it’s overdue. But at the same time, as I reflect on the work that has been lauded by our industry throughout the award season, I am forced to ask myself how much of it really helps brands live up to these five principles.
There are some shining lights that absolutely tick the boxes, but the truth is that there is a glut of work that claims to be data-driven personalisation but is nothing more than banner ads with different end-frames and CTAs, or work that claims to elevate a brand’s purpose yet fails to provide any connection to the product or to the results.
In short, there are still far too few examples of work that delivers both data- or technology-led efficiency alongside real creative effectiveness. At the same time there are still far too many examples of work being praised without any understanding of what impact it really delivered to the client.
These shortcomings show how tone-deaf the agency world can be. While CMOs are increasingly pressured to demonstrate the value and the ROI that marketing brings to the table, agencies still often fail to connect creativity and accountability. It’s no wonder that creative agencies have experienced revenue and growth pressures while media agencies and consultancies continue to grow: because they speak the right language, they speak accountability and ROI.
The real impact however, is that while corporations are recognising their expanded role in society, recent research from Harvard Business Review tells us that “only 5% of CMOs are highly confident in their ability to impact strategic decision making and the overall direction of the business”.
So while there has never been a time when the role of the CMO was more relevant, most lack confidence that they are making the difference that is needed to drive the business. This should be a wake-up call to the industry, because if current partners and practices don’t give them confidence, in time they will likely find others that do.
And yet, every glass that is half empty also represents a glass that is half full. While the Business Roundtable’s announcement may have been glossed over by many, or simply discounted as only keeping up with the way business is already being done, it is also a call to move past pure efficiency metrics and better connect creativity with business, to drive lasting impact and real change. It is permission to push beyond the traditional boundaries and constraints of marketing and communications.
Forbes tells us that the most desirable skill in the future will be creativity, and nowhere is that skill in greater supply than in the “creative industry”. But now that we have permission to use that creativity - not just to tell brand stories but also to help transform and grow businesses - will we? Because now more than ever, we need to be properly aligned with CMOs’ pressures and priorities.
Justin Peyton is chief strategy and transformation officer APAC at Wunderman Thompson