Globally, organizations have been put to the test by a rolling and seemingly unending series of crises. The health threat of Covid-19, economic disruption, systemic racism in the US and beyond, climate change, and much more have corporate leaders grappling with unprecedented challenges. How can they give hope to their employees, customers and society?
It's a challenge, but it’s one that companies are undertaking from a position of some strength. Companies reacted better to the pandemic than might have been expected, which, in turn, made their employees proud. In a Bain & Company survey of nearly 1,000 global employees of companies of all sizes conducted during the early months of the crisis, 75% of employees said that they are proud of the way their company has supported them and their customers during the pandemic, and 64% reported feeling proud of the way their organization has supported the broader community.
In most companies, employees have naturally gathered behind a common goal, a purpose that has given meaning to their work during these trying times. Among employees whose satisfaction with their company increased through the pandemic, 86% said that their employer has a purpose that its people are passionate about and find meaningful.
Almost by accident, companies have rediscovered the power of uniting behind a purpose. Now they have the opportunity to rethink what they want to be for the next 50 years. They have a chance to reignite their purpose. This is as true for organizations that are still in the eye of this storm and searching for their North Star of a uniting purpose as it is for organizations that already have overcome the worst of the crises and that are now looking to make the most of their momentum.
But how do we define purpose? One way is as the reason a company exists—namely, the why, the thing that gives meaning to employees’ everyday work. Purpose is also a long-term notion. What you want to stand for over the next half century. Purpose supports the CEO’s vision and strategy as well.
By redefining their purpose and focusing on it, companies are better equipped to thrive in an ever-changing world. Consumer products company Mars has recently formulated its purpose as: “The world we want tomorrow starts with how we do business today.” And this philosophy is reflected throughout the organization in many ways, including its $1 billion investment toward becoming sustainable within a generation. Such focus can help a company to attract key talent, engender consumer trust and gain access to important resources such as sustainable supply chains.
Once, corporate purpose had a narrow definition inspired by Milton Friedman’s idea that the “one and only” social responsibility of business was “to use its resources and engage in activities designed to increase its profits.” Now, companies are expected to serve a broader purpose, answering requests not only from shareholders but also from customers (who increasingly demand products that reflect their values), employees (who want their work to have meaning), their ecosystem of business partners, and society itself as we grapple with growing environmental concerns and social challenges (see Figure 1).
Five distinct threads wind together to create corporate purpose
Today, companies typically fall into one of three categories. The first group have not started to think about their purpose at all. The second have started reflecting but have not yet acted. The third have formulated a strong statement and are trying to put it into practice.
Companies that have not started thinking about it can begin by following these steps:
- Study what the organization has learned about itself during the current crises. What brought employees together, made them proud of their organization and deepened their engagement?
- Capture this rediscovered purpose. Companies can formulate their purpose statement in a way that encapsulates what the company, its employees, its customers and its wider community want to support and achieve over the coming years.
- Communicate the new purpose statement across the company in a way that engages employees’ heads and their hearts.
- Adapt it in a manner that works with business reality, including the company’s processes and its opportunities to empower employees.
An effective corporate purpose affects how the company generates financial value as well as how the organization is perceived in the market. It clearly links to business strategy, factoring into critical decisions and resource allocation. It also influences company culture, including how people work and behave, inspiring the organization in a way that unleashes discretionary energy and creativity. Finally, it culminates in concrete action.
Companies that have already started reflecting can quickly take some meaningful, if symbolic, actions. In the context of concerns about racism, companies have started to make changes to products. For example, Quaker Foods is rebranding and changing the logo of its Aunt Jemima brand of syrup and pancake mix, acknowledging its origins as a racial stereotype. After such symbolic actions, companies are taking the next step, thinking about how they can increase diversity among their employees and leadership teams.
For those organizations furthest along on the journey, culture steers the company. Based on its mission to “reimagine global agriculture and food systems,” agribusiness giant Olam works in an ethical, socially responsible and environmentally sustainable manner. Employees are expected to push their own work in that direction. Even before Covid-19, management credited this approach with contributing to Olam’s 65% revenue growth from 2015 to 2018. This credo has also guided the company’s reaction to the global pandemic, including its focus on ensuring employee safety and minimizing supply chain disruption. In one case, Olam reorganized its supply chain across Thailand and Pakistan in a matter of three weeks in order to deliver 7,500 metric tons of rice to Singapore’s strategic stockpile—all packaged in small amounts suitable for distribution to the island nation’s citizens during the lockdown.
As these companies and others have found, focusing on purpose gives employees hope in an uncertain world. Customers and communities were demanding that corporations do the right thing even before we found ourselves amid a global health crisis. Their concerns will only keep growing. Revitalizing an organization’s purpose prepares it for the future, investing now for benefits to come later, financial and beyond.
The global Covid-19 pandemic has extracted a terrible human toll and spurred sweeping changes in the world economy. Across industries, executives have begun reassessing their strategies and repositioning their companies to thrive now and in the world beyond coronavirus.