Corporate purpose

Five key transformations are required to unlock a powerful corporate purpose

Purpose agency Given has released a new guide that offers five steps to help companies unleash the power of their purpose

Forget purpose. Purpose is done. If companies aren’t purpose-driven now, they’ve missed the boat.’

So announced the person with whom I was chatting via Zoom.

And therein lies the problem. It’s why so many companies are accused of purpose-washing, because if people seriously think purpose is ‘done’ then it demonstrates just how little they understand what purpose is about or its power.

Because purpose is hard. It’s not about painting an inspirational purpose statement on a wall, checking that staff ‘get it’ and moving on. It’s not about ticking the ‘purpose box’ because everybody else is on the bandwagon. It’s a long and continuous journey.

You cannot be a purpose-led organisation without a robust and ambitious sustainability strategy

Maybe this explains why a recent YouGov survey conducted on behalf of brand purpose agency Given found that two thirds of employees felt that little or nothing had changed since their businesses introduced their corporate purpose. And 69 per cent felt their company’s purpose was conflicted, or only partially aligned, with their own day-to-day experiences.

As Becky Willan, chief executive of Given, put it to me: ‘There’s clearly a gap. A gap is a good thing, but not if there is no movement in the right direction.’

If there is a gap, then this implies that early steps have been taken. ‘Our hunch was that there was a lot of talk but very little happening,’ explains Willan. The survey confirmed her views. ‘If you have purpose that has the potential to be a real North Star, then you’ve made some initial commitments. You’ve got a sustainability strategy that backs it up, but what do you do now? Your job is to rewire your organisation around a slightly different set of priorities, but where do you even start?’

And don’t even think about starting without a sustainability strategy in place. ‘I believe you cannot be a purpose-led organisation unless you have a robust and ambitious sustainability strategy,’ says Willan firmly.

‘If you want to be serious as an organisation thinking about purpose, you need to be serious about sustainability but also from a commercial standpoint. What new commercial models need to be developed? What decision making tools need to change?’

Given has just released the second instalment of its Insiders’ Guide to Purpose, which offers advice on five ‘transformations’ that need to take place within an organisation if it is serious about purpose and unlocking its power. ‘It is designed to be a practical set of tools, questions, prompts and inspiration for people,’ explains Willan. The guide is for ‘people who are pioneering this different way of creating change and transformation in business, which is geared around purpose, not purely profit’.

The transformations encompass governance, leadership, engagement, brand and innovation and metrics and measurement. The five are separate yet interlinked, and often serve to reinforce each other. ‘Charlotte [Goodman, director of impact] at Virgin talks about purpose being a driver not a filter. In most organisations, you can basically link any decision or programme back to the purpose because they are broad and expansive,’ explains Willan. ‘But it’s retrofit. Whereas if purpose is a driver, you start with purpose and say What do we do now if we are serious about this?

Willan has recently been working with Lloyds Banking Group to help embed its purpose into its strategy and culture. ‘It’s about establishing decision-making principles which say that, when we talk about our purpose, this is what we really mean. It’s about being more inclusive, more sustainable, more pioneering, and more secure – resilient. It sounds simple, but when you think about the default decision making considerations in most organisations: it’s cost, risk, and profit,’ she explains.

I am not sure that trying to create a single measure for purpose is that helpful

‘Giving people a different set of principles is incredibly powerful. It gives people the freedom to make decisions in a different way, and it gives the board a framework in which to hold the business to account.’

The role of boards and leadership is vital to the success of any purpose strategy. McKinsey recently found that a transformation is around six times more likely to succeed in organisations where the chief executive communicates a compelling narrative of change. ‘Without visible leaders who can champion this, it isn’t going to happen,’ explains Willan.

To build a truly purposeful business, leaders also need to rewire their thinking. ‘They need to ask themselves when was the last time that they challenged a decision,’ she adds. ‘Boards that think about these things consistently and deliberately are incredibly powerful.’

Businesses can be process-driven and data-focused, but being purpose-led means looking at these things differently. For example, being able to measure purpose is a hot topic now, but as Willan says ‘that can be a distraction because fundamentally I think the biggest question is What is it that we are trying to create? I am not sure that trying to create a single measure for purpose is that helpful. An unintended consequence is that it can pitch purpose against profit and these things need to exist’.

Purpose washing is when the only place a brand’s purpose turns up is in its marketing

Metrics are important though, and adding purpose-driven key performance indicators to traditional commercial metrics is essential. Ultimately, adopting a purpose-led strategy can cost money in the short-term but, over the long-term, should create more value. ‘It’s about tracing that value creation back. It’s about the ability to attract and retain the best talent, it’s about having an inspired and motivated workforce, it’s about loyal customers – all these things contribute to long-term sustainable value, not quarter-by-quarter profit returns,’ she explains.

‘I feel strongly that you must think about the hard wiring and the soft wiring. The soft wiring is what people say about us, our values… hard wiring means there is accountability and processes and systems so that people don’t revert to whatever they did before.’ That means rethinking remuneration and rewards, such as introducing purpose-related targets into incentive plans.

Given’s report highlights Northumbrian Water which uses a balanced score card to track performance against purpose across various themes. Goals, such as eradicating water poverty by 2030, are tied to the score card, while 60 per cent of senior executives’ benefits relate to these non-financial metrics. ‘This is information that needs to be provided in board papers,’ says Willan.

Companies that are adapting into a purpose-led model are learning and ‘we need to give them the space to get it wrong sometimes,’ she says. ‘People are very quick to make accusations about purpose washing, but real purpose washing is when the only place a brand’s purpose turns up is in its marketing. We should call them out, but it’s not the case in most organisations.

‘There is a difference when there is a gap between where a business is and where its aspirational purpose is. Most of the time much [of the work and progress] is invisible, and what people see is the marketing. So, there is a lot of focus on purpose and marketing,’ she adds. ‘Out of the 30 winners at Cannes Lions, 28 were purpose marketing. How can you measure the impact of purpose in a 12-month window? It contributes to the idea that this is all fluff, because people see the advertising, but they don’t see all the work that is going on behind the scenes.’

So, in answer to my erstwhile Zoom companion, they haven’t missed the boat. They’ve boarded, but it is a long and rocky voyage.