As a business owner, you hear about the Purpose for companies, and you are no doubt trying to make sense of how it fits into ESG (Environmental, Social and Governance), or your company mission. You may not fully understand what a company Purpose is, why you need one, or why you should care. So we’re here to explain all this and put it into perspective with the help of some of the world’s leading experts.
Is Purpose really a ‘thing’ in business?
Purpose is now considered a core business strategy by companies and organizations all over the world. In 2019, the Business Roundtable, a group of CEOs from nearly 200 major U.S. corporations, came up with a new definition of what the Purpose of a company should be. They defined the core business goals of a company to be – to invest in employees, to deliver value to customers, to deal ethically with suppliers and contractors, and to support outside communities. All this in addition to driving profits and maximizing shareholder value.
“Without a sense of purpose, no company, either public or private, can achieve its full potential.”
Larry Fink, CEO, BlackRock
Is Purpose different from mission?
Yes, absolutely it’s different! “Most organizations think of a mission as a way to align everyone in the organization to the same focus. It describes what business the company is in now and what business it plans to be in in the future. The Purpose goes beyond the mission, acting as the unifying principle that drives everything the organization does.” Bruce Jones, Senior Programming Director, Disney Institute.
So what IS Purpose exactly?
Purpose provides your company’s north star. It’s your higher purpose beyond the products you manufacture or services you offer and is represented in a mighty statement that although may look high-level, it has breadth and depth.
Here are three examples of Purpose statements:
- Danone: To change the way the world eats to benefit both people’s and our planet’s health.
- Vancity: To redefine wealth in a way that furthers the financial, social and environmental well-being of our members and their communities.
- Modo: To transform communities by connecting people with places in a way that’s affordable, convenient, inclusive, and sustainable.
At Business 4 Social Good, we take Purpose one step further and call it Social Purpose. Social Purpose is what you stand for (or against). It’s your commitment to making a difference in the world (or your community) toward a social, humanitarian, or environmental issue while making money. Think of it as making a profit with a purpose. In our client work, the Social Purpose is the foundation of the social impact your company will put out there to the world.
Social Purpose should be embedded into all levels of the company, so everyone knows it, feels it, and sees it. When done right, Social Purpose gives your employees, stakeholders, and shareholders something meaningful to rally around.
Deb alcadinho, founder, business 4 social good
I like to think we’re all put on this earth for a reason. As humans, it takes some of us longer than others to realize what that is (and some never do). But as a company, Purpose is vitally important for your employees, customers and stakeholders to make a decision whether they want to work for you, shop with you, or support you. That’s not a bad thing! That’s just the way consumerism is now and what it looks like in the labour market. If that feels like scarcity, don’t worry – there are more than enough consumers who will align with your values and what you stand for, and employees that will want to work for you! Here are two stats to consider:
73% of consumers say to win their support, companies must show how they are supporting communities and the environment.
58% of employees today say they hold their employer to a higher standard than other companies when it comes to addressing social justice issues.
Purpose speaks to the alignment of values for your employees
It’s no surprise that we’re in a tough labour market. Now, more than ever, employees are seeking to work for companies that have values that match their own. Employees want to work for companies that care about matters they care about, and what they care about is changing! This means companies need to put their values front and center in the employee experience.
If your Purpose is clear to employees, they will know your stance on tough issues, and whether the company will weigh in on controversial issues. If the said issue doesn’t relate to the company’s Purpose or values, they will understand why you haven’t commented on it. However, you can still provide support to employees during or after specific events.
Make Purpose something that your company talks about, a lot! Every employee in your company should understand that the Purpose is central to their roles. Bring it to life by building it into job descriptions, reviews, and performance metrics (KPIs).
How does Purpose fit into ESG?
If Social Purpose is your North Star, “ESG is how you deliver on it. This includes the programs, policies and goals that help to actualize your Purpose and ambition in a concrete and actionable way. Both are critical to being authentic – not only in the eyes of employees, but also other stakeholders such as supply chain partners, customers, consumers, communities, and shareholders.” Purpose under Pressure report
When articulated and lived, Purpose “empowers and powers organizations to embrace extraordinary new stakeholder responsibilities. (It) is profound when developed, embedded and activated authentically.”
CAROL CONE, FOUNDER, CAROL CONE ON PURPOSE
Purpose helps in decision-making in times of turmoil
Your company’s Purpose can often be put to test in times of strife or external conflict.
Take Ben & Jerry’s for instance. They are very clear about advocating for social justice. Long before the George Floyd murder, they were vocal about supporting the #BlackLivesMatter movement. So when the Floyd murder occurred, they spoke out about it authentically and with ‘purpose’. They didn’t hop on the bandwagon, they were very clear about their stance on the issue and what change they expected. “Four years ago, we publicly stated our support for the Black Lives Matter movement. Today, we want to be even more clear about the urgent need to take concrete steps to dismantle white supremacy in all its forms. To do that, we are calling for four things…(read more)
When controversial issues or movements arise, your company’s Purpose acts as a filter to understand if, how, and when to act and respond.
Purpose…Walk your talk
Don’t wait for times of turmoil to test your Purpose. Instead, focus on activating the Purpose to your internal and external audiences on an ongoing basis. Internally – this involves your policies, programs and communications bringing the Purpose to life for your employees. Externally – this involves sharing your Purpose and activities through newsletters, social media and other forms of external communications.
What’s next?
If the notion of your company’s Purpose sounds a bit overwhelming, here are two takeaways to consider before embarking on the process:
- Defining and declaring your company’s Purpose is not a marketing exercise. Rushing to communicate your Purpose before you’ve established how your company will bring it to life will be detrimental to your success.
- Involve your employees in the process to get everyone excited and involved from the start.
So I ask you, ‘What does your company stand for beyond the almighty dollar?” Now’s a good time to figure it out. And if you need help, we’re here for you with training programs and consulting to help you define and declare your Purpose, and then engage your team, integrate it across all levels of your company, and amplify and measure your impact.
