Diane Osgood is the Director of Business Innovation at Virgin Management where she works with the executive teams at Virgin business to define and integrate purpose and sustainability across all areas of operations. She works across functions such as brand, people (HR), business and product innovation, customer experience, environmental performance and charitable activities. She brings two decades of experience in corporate sustainability, purpose development and partnership development. GlobeScan Director Eric Whan recently spoke with Diane about how Virgin has become known for its purpose-driven leadership and the value the company has placed upon stakeholder engagement to help it get there.
I am optimistic, particularly because I see more companies defining their purpose in society and locating their sustainability efforts within this larger paradigm. This trend, together with the adoption of the Sustainable Development Goals (SDGs) and the COP 21 Paris Agreement has given us great momentum, and I see three critical work streams we need to rapidly advance in order turn the momentum into an enduring shift of business practise.
First, we need to get gritty about the business case. After two decades of advancing the broad business case for sustainability, we now need to drill down into the details in financial terms. For example, how does a company’s environmental performance impact customer net-promoter scores (NPS)? And what is the financial value of the boost to NPS? Or, to what extent does being purpose-driven achieve employee engagement? And what is the value of the marginal benefit in financial terms? We now have tools, but we need the commitment to collect the data and start telling these stories using financial analytics.
Second, ensure there is integration, and that purpose and sustainability are not simply bolted on. Purpose and sustainability aren’t department titles; they need to be integrated into the core of the business, including organizational, cost and remuneration and governance structures. They need to help drive innovation and customer experience.
And last, we need to engage customers. Why should your customers care? Every time we open our wallet, we vote for the world we want. How do you engage your customers’ hearts, as well as their minds, about their choices?
Consumers are in the driver’s seat because demand is the stronger side of the supply-and-demand equation. Consumer demand is the fuel to the economy’s engine. And therefore, the most pertinent question is, how does everyone come to understand and use the power of their wallet to vote for the type of world they want?
We know that less than 20% of consumers regularly purchase goods using any filter of sustainability in their decision-making. The trick is to tap into a new narrative of consumption, one that touches people’s hearts to authentically deliver more sustainable choices. The messages can’t be about obligation or guilt. We need to focus on the connection and sense of belonging that can come from choosing products that help create better jobs for more people and support a healthy environment.
Companies can actively foster the connection between customers and how their stuff is made. Enable curiosity! Use narratives that reinforce messages of connection and deeper purpose – but only if they are authentic. And fundamentally, do what you do well. One false promise can be devastating.
During my tenure at Virgin, we adopted and embedded our purpose “Changing Business for Good.” I am proud to have helped integrate our purpose into the heart of the strategy at both Virgin Management and many of the other great Virgin companies. I’m thrilled by the success of our two-year program to embed purpose. Today, 94% of Virgin management employees identify with the company's purpose.
The first step was really one of codifying what Virgin has always stood for. I think that’s a key lesson – a company’s purpose isn’t made up. It’s often a distillation of the original essence, the spark in the founder’s eye. The hard work is translating the purpose into strategy across all parts of the business, including organizational and governance structure, product design, customer experience and the types of partnerships we develop. And the second lesson is that true collaboration is required to achieve integration. Everyone has to play a role because it is not achieved by one person or one team.
Our business purpose, Changing Business for Good, runs through our business, and Richard Branson leads by example. He believes that good people are paramount to business success and he runs his company that way. What does this look like? Excellent internal communication and people (employee) strategies that really walk the talk around diversity, inclusion and quality of work life. For example, we’re experimenting with unlimited leave and have granted equal paternity leave. These actions are touchpoints that affect people’s lives positively. The specific approaches that work for us are not necessarily right for other sectors or companies. However, the basics of true senior leadership, great internal communications and quality of work-life focus can apply to any company in any industry.
Paramount! It’s all about collaboration. The family of Virgin companies are critical stakeholders and their engagement is top priority. We also engage Virgin customers with our digital platforms, as well with a few live events such as “Pitch to Rich” and “Disrupters.” This year we are launching an outreach program to suppliers – it’s a busy year!
It is not always easy. First, I think we need to stay rooted in mega-trends. Taking a couple of steps back and looking at where the world is going keeps us mindful of the larger context. It also helps us spot opportunities and risks which in turn helps our companies.
Second, courageously accept challenges you don’t know how to fulfil, and accept that we will collectively figure it out. I think a good example of that is the B Team’s “Net-Zero by 2050” commitment. By raising our hands and saying we are going to do this, it spurs along the necessary innovation. However, we need to keep each other accountable and commit to frequent public reporting on progress. It’s not always rosy, but we need to remain consequent to our commitments and share what we learn along the way.
And third, we need to stay connected to the collective. As practitioners and leaders, we benefit from the mutual support, encouragement and healthy dose of competition of our peer network.