News and Insights
Connecting to Corporate Purpose
July 26, 2022
No one starts a business thinking it’s not going to survive. Anyone who takes that leap of faith intends for their enterprise to serve as part of their legacy, a living monument representing the aspirations and, critically, values of those who built it. As human beings, our time is limited, so we’re all driven in some way to do something that lives beyond our own mortality.
It’s through this lens that leaders must examine the importance of positive societal impact in how their businesses relate to the wider world. No one on this planet exists in a vacuum. We’re all connected, reliant upon each other whether we know it or not. Those who are aware of our connections enter into a pact with their families, communities, regions, nations, and the wider world: “I won’t do anything that threatens your wellbeing, now or in the future.”
Being human, we often fail. But socially conscious people the world over who possess the luxuries of circumstance, geography, and insight look beyond their immediate sphere of influence with an eye towards achieving good global citizenship. They recognize that what they do here and now creates ripples that extend well beyond our limited view.
Businesses are, at their core, human. Whether a global mega-conglomerate or a corner mom-and-pop, no organization would exist without the people who choose to devote their time and energy to its success. It’s a simple truth, but one that leaders too often forget as their attention turns solely to stock price, products, or competition. While these are important considerations, without maintaining some level of basic human concern, businesses can become soulless enterprises.
There’s an increased expectation among a multitude of stakeholder groups – customers, shareholders, corporate partners, suppliers, non-profits, and governments – that the businesses they engage with or that share their communities do more than just fill the basic role of job creator. They recognize that companies large and small have a tremendous capacity to effect positive change in our society. They see that by marshaling resources, expertise, and communities, either solo or in conjunction with other like-minded organizations, businesses can move the needle in a way that few other pillars in our society can.
But why should they? “Virtue is its own reward” and “doing good is simply the right thing to do” are truisms that are not necessarily going to move the needle in the boardroom or on an investor call, where there’s rightly a focus on return on investment. No business can survive without making money; if it’s not around to do good, it doesn’t matter how noble its leaders’ intent was.
Environment and sustainability are good examples of arenas in which corporate leaders have recognized that doing nothing is simply no longer an option. They know that if supply chains collapse due to climate change, that’s disastrous for their businesses.
The tougher sell is on social impact and general corporate purpose. These issues can be thorny, particularly in our increasingly contentious public discourse. The risk responsible organizations run is alienating a portion of their stakeholder base through their action or inaction. Many corporate leaders wonder if they should take any kind of stand at all, but the data couldn’t be clearer. A 2018 Accenture study found that “62% of American consumers want companies to take a stand on current and broadly relevant issues such as sustainability, transparency and fair employment practices.” Other studies show similar findings.
Business leaders are under some pressure to ensure that their decisions yield results in the next quarter. But as a corporate officer, if you’re looking for immediate returns on your investment in socialization and marketing efforts across the social justice, sustainability, or DEI spectrum, you’re going to be disappointed. There may be a win in the media cycle, but the likelihood of seeing tangible, monetary return in the immediate future – next week or next month – is low. Investing in positive societal impact is about long-term growth and building reputation as an integrated, conscientious member of a global community.
It means building trust over time and staying the course with consistency, resolve, and belief in the face of adversity. Indeed, CEOs surveyed as part of Deloitte’s 2019 Human Capital Trends report indicated that the number one issue of concern when measuring success was “impact on society, including income inequality, diversity, and the environment”. However, the report goes on to say that though leaders have recognized the issue, they haven’t solved for it.
Ultimately, this focus on issues of social import does move the needle over time. According to 2015 research by Harvard Business Review, 58% of firms that prioritize business purpose grew at 10+% over the preceding three years. Conversely, 42% of those firms without a clearly defined corporate purpose reported flat or declining revenues during the same period, compared to just 15% of firms that prioritized it. What’s more, self-identified purpose prioritizers more frequently reported successfully completing a major initiative over the course of the study – expanding geographically, changing their business model or operations, completing a merger, or launching a new product, for example.
The fact of the matter is that organizations don’t create sterling corporate reputations overnight. They’re planned, built, and earned over time. Think about how to create value three, five, even 10 years in the future. What are the pressing issues on which people will be looking for leadership? How can a business meet that need for leadership in a way aligned with organizational culture and values?
By being intentional about purpose and social impact, by recognizing and embracing the humanity at the core of every business, organizations can begin to find their niche in the fabric of our societies and rise to a position of meaningful leadership on meaningful issues. Those are the things that stick in people’s minds and stand the test of time.
POSTED BY: Cullen Burnell
