At the end of last year, Unilever’s freshman CEO Hein Schumacher shocked the business community when he told investors he would not “force fit” purpose across the company’s entire portfolio. “For some brands, it simply won’t be relevant,” he said.
But a well-crafted corporate purpose is more than just an environmental or social mission – as Schumacher seemed to perceive it – it is a raison d’etre that should inform strategic decision-making, corporate culture and employee actions.
Global business transformation consultancy Brandpie’s CEO Purpose Report argues that companies are sitting on a valuable opportunity when it comes to purpose. While 89% of CEOs say their organisations have a purpose, only 63% use it to inform their business decisions. The biggest challenge, the report says, is making the corporate purpose relevant and actionable.
Five CEOs recently met at a roundtable to discuss how they’ve infused their purpose across every aspect of their organisation’s operations. All agreed that the CEO is the main proponent of purpose. “Our job is to embed purpose throughout the organisation and make sure that it’s present at every single layer in discussions,” said Rebekah Cresswell, CEO of Priory, a provider of mental health and adult social care services.
Jon Walker, CEO, Axa Commercial agreed that proof of concept for purpose is when employees use it to inform their decision-making. He mentioned hearing staff talk about the company’s purpose as a way to shape their approach to work. “For me, it’s about giving people the ‘why.’ Purpose is that emotional connection people have with the business.”
Work doesn’t have to be transactional. If employees are inspired by their company, they will contribute to a more successful – more purpose-driven – business. “I’ve never met an employee or a leader who gets out of bed in the morning to maximise shareholder return. Purpose means having something within the organisation that gets people excited and makes them feel like they’re helping humans to progress and challenges them a little bit,” Dave Allen, founder of Brandpie, said.
To inspire people to get out of bed in the morning, purpose should be integrated into the company’s culture. The leader’s role is to galvanise the workforce behind those values and give them the tools they need to use them in a practical way.
Our purpose is a constant that we can measure our decisions against
Making a corporate purpose actionable is essential. If it’s just words on a wall, Chris Pogue, CEO of defence and technology company Thales Canada said: “it’s probably pretty useless unless it covers a hole in the paint.” If the corporate purpose inspires conversations, it will eventually compel decisions, he added. “Those decisions are purpose-driven and you’re delivering shareholder value. It’s not one or the other.”
This might be easier for some companies than others. If even Unilever – a decidedly purpose-driven business – is struggling to embed its purpose in its culture, then the challenge is significant. But even businesses that don’t necessarily serve an inherent good, unlike those in healthcare or the charity sector, can create effective, emotive, purpose-driven companies.
Saul Resnick, CEO UK&I of DHL Supply Chain said: “DHL Supply Chain has built a purpose that supports employee engagement with business choices. Staff are empowered to challenge decisions and help shape the culture along with leadership. This helps build a sustainable purpose that aligns with how DHL Supply Chain drives shareholder value.”
To create this unifying force, companies should carefully craft their purpose so that it can serve their business for the long term. “Our purpose is a constant that we can measure our decisions against. It gives you a bedrock and a touchstone that you’re always going back to,” Cresswell said. It should not be changed or adapted often, especially when there’s an incoming CEO, as a purpose is bigger than a CEO, owned by the people and about the identity of an organisation. In fact, Allen said, the sign of a great purpose may be when a new CEO joins a company seeking to change what it stands for and instead is faced with an employee base in adamant support of the existing purpose.
Sometimes, Walker pointed out, a CEO will have to stand by their purpose even when it goes against financial interests. Leaders, he said, shouldn’t compromise on their commitments to the organisational purpose in favour of a better financial result. “The day you go down that route, your purpose starts to lose credibility with the people really quickly,” Walker said.
Resnick added: “The definition of a great purpose is that it’s open to challenge but strong enough to withstand challenge.” That paradigm should give companies the space to develop a strategic, suitable purpose while leaving room within the corporate culture to grow.
Having a clear purpose aligns what your employees think with what society thinks
A purpose that allows for growth and responds to challenge will be a huge asset to companies in the future. Economic uncertainty, geopolitical risk and environmental change are posing existential questions that companies won’t be able to answer without a clear, actionable purpose. “I think the challenges we face now are going to be minuscule compared to what we’re about to face in the next 10 years. I hope and believe that strong, purpose-driven companies will get us through that. I fear they may not,” said Pogue.
But Allen said that “having a clear purpose aligns what your employees think with what society thinks.” This approach will build a stronger corporate culture that facilitates productivity and business success.
A strong culture will see businesses through the tough times by building a better reputation and limiting attrition. “However difficult and however many challenges we might see thrown at us, the one thing I’m certain of is the need to be clear about what you stand for and make sure you stand for it day in, day out. Otherwise, people won’t join you and those that have will leave you,” Walker said.
The changing economic landscape will only compound the challenges businesses face. A third of CEOs are still struggling to make their purpose an actionable asset that informs their decision-making and inspires their cultures. If companies act now to embed a purpose that works for them – and helps them work – they will be more resilient and successful whatever the future may bring.
