Reimagining Corporate Purpose in 2022
February 25, 2022 – As we are now two months into 2022, many business leaders thought we would be putting the pandemic behind us and charging full steam ahead into a post-COVID world. However, with the recent rise of the Omicron variant, and caseloads continuing to increase around the world, the reality is that COVID and new forms of the virus will be with us for the foreseeable future.
Vaccine/booster effectiveness and new anti-viral treatments encourage most companies toward some version of return to in-person work. “While COVID may seem less crisis and more chronic, leaders must acknowledge the upheaval of the past two years, including the impact of social movements like #MeToo, Black Lives Matter and the climate crisis,” concluded a new report from executive search network IMSA Search Global Partners. “Current efforts to rebuild are happening during a time of significant shifts in societal norms. Corporate purpose, to serve as a foundation during recovery, a beacon through change, must keep pace,” the report noted.
Purpose Provides Competitive Advantage
Corporate purpose is not a PR exercise. It is a competitive advantage, IMSA said. According to Chief Executives for Corporate Purpose (CECP), research demonstrates that companies with established and articulated purpose – high purpose companies – show 14 percent greater revenue growth, eight percent higher operating profitability and six percent better return on capital than those companies which focused only on maximizing profits. And the gap is increasing.
Purpose is a factor in purchase decisions, according to the IMSA report. “People don’t buy WHAT you do; people buy WHY you do it,” said Simon Sinek, purpose expert, researcher, and best-selling author, in a TED Talk. Purpose orients a company toward social responsibility which in turn motivates customers, which in turn helps create value.
“Purpose is also a hiring advantage, particularly among younger employees who want to work for companies that share their own personal values, and whose actions demonstrate concern beyond profits,” said Mitch Berger, managing partner of IMSA Search Global Partners USA and IMSA board member. “Talent is asking: Are there corporate social responsibility programs? Environmental, social, governmental (ESG) programs? Volunteer opportunities for employees? All of these are expressions of corporate purpose today.”
Meaningful Narrative and Stabilizing Force
The Conference Board calculates almost a quarter of S&P Global 1200 companies have a statement of corporate purpose (SCP), defined as “a public commitment to identifying and responding to the needs of multiple stakeholders well beyond the boardroom.” In this era of stakeholder capitalism, business leaders define their primary responsibility as creating long-term value not only for shareholders, but also for customers, suppliers, employees, and the communities in which they do business, according to the IMSA report. “Value for shareholders is profit-based. Value for these other stakeholders is based in the human need for meaning.”
Purpose-Driven Leadership and Its Impact on Long-Term Financial Results
Purpose doesn’t just add to an employee’s well-being; it adds to a company’s bottom line. That’s the key finding of a survey of top executives just completed by Korn Ferry. The vast majority of respondents (96 percent) said there is a long-term financial benefit to companies that make a strong commitment to purpose-driven leadership, with 77 percent agreeing “to a great extent.”
One of the reasons purpose-driven leadership may add to corporate financial gain, according to the survey, is the impact it has on employees. Eighty-nine percent of respondents said they believe understanding and embracing the mission/purpose of their organization increases employee productivity.
In a recent article, Hubert Joly, former CEO of Best Buy and recognized by Harvard Business Review, Barron’s, and Glassdoor as one of the world’s top CEOs, confirmed that more than eight in 10 executives think that a strong sense of shared purpose drives employee satisfaction, increases customer loyalty and can play a central role in transforming business. Also, purpose can stabilize a company through volatility, helping to deliver higher and more sustainable performance.
Developing Powerful Purpose – The Why Beneath the What
The SCP is a key component within the corporate identity narrative. Alongside vision – a company’s overall long-term goal, mission – what a company does, and values – how a company does its work, purpose asks why a company exists or why it does what it does, according to the IMSA report.
Related: Five Strategies to Attract Top Talent in Today’s Market
“Powerful purpose statements communicate a company’s commitment to making a difference in people’s lives, not about being the best or biggest or fastest,” the report said. “SCPs should be credible, aligning with a company’s business, connecting with its industry. They should be authentic, resonating with employees’ personal values and passions. They should serve as the lens through which all decisions are made, translating easily into concrete actions and business strategies. They should be easily understood, attainable yet inspiring.”
Not a Zero-Sum Game
“Today’s stakeholders, especially top talent, expect a company to go beyond business, make the world better,” said Monika Ciesielska, president of IMSA Search Global Partners. “Corporations want leaders who understand their role is to create net positive impact. It’s not a zero-sum game where someone must lose for someone else to win. The best leaders are human-centric, putting people and their needs at the core.”
She says a strong statement of corporate purpose will clearly articulate this commitment, creating in the words of Hubert Joly, “engaged employees, happy customers, thriving communities, and rewarded shareholders.” As the COVID crisis recedes, and companies refocus and rebuild, now is the perfect time to reimagine your corporate purpose, the report concludes.
IMSA Search Global Partners is an international executive search network with 22 member countries and over 50 offices across Europe, the Middle East, Africa, Asia, and the Americas. Members of the IMSA International Executive Search network are all boutique search firms.
Mr. Berger is a member of the IMSA Search board and regional director for North and Latin America. In this role, he concentrates on further building IMSA’s presence in these regions. He is also CEO of Howard-Sloan Search, a firm that he has been instrumental in growing over the past three decades. Under his direction and guidance, the Howard-Sloan family of companies has increased tenfold through organic growth and acquisition. Howard-Sloan works with Fortune 500 public and privately held companies, prominent law firms, and companies listed on Fortune’s Best Places to Work to identify and secure their top talent.
Ms. Ciesielska is president at IMSA Search Global Partners, an international network of headhunters. She is also founder of Carpenter Consulting. For over 15 years, Ms. Ciesielska has recruited managers, executives, and board members, mainly related to sales, online and offline marketing, IT, law, manufacturing, PR / communications and purchasing, while cooperating with companies representing each industry, international corporations, and large Polish accounts.
Related: What Workers Want May Surprise You
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media