Nearly nine in ten (86%) current CEOs and future business leaders believe businesses should have a social purpose, but just a fifth of the younger generation agrees they are doing so, according to a new study by Coca-Cola Enterprises (CCE) in partnership with Cranfield’s Doughty Centre for Corporate Responsibility and The Financial Times’ FT Remark (FT).
The study, Combining Profit and Purpose, is based on the views of 50 CEOs and almost 150 MBA and MSc students and recent graduates across Europe. The research indicates that both current and future leaders agree that a business’ profit and the ability to provide shareholder value are the best barometers of business success today. However, the groups disagree on how that may change in the future. While the overwhelming majority of current CEOs feel that profitability and shareholder value will remain key in the future (94% and 88%, respectively), the findings suggest future leaders have higher expectations of the role business should play, claiming that societal and environmental impact (80%), innovation (61%) and development of future talent (57%) will be more important indicators of business success in the years to come.
The two groups also differ in opinion about the barriers to businesses combining social purpose with profit. Two-thirds of CEOs (66%) view external factors such as government and regulation as the main barrier, while the majority of future leaders cite internal factors, such as current management attitudes (55%).
There are believed to be many rewards for businesses that prioritize social purpose; more than three quarters of CEOs (78%) say it offers relevance to the next generation of customers and employees, and 70% claim it actually ensures business survival. Future leaders identified the key returns as more engaged employees (54%) and increased innovation (53%), while increased trust in business is also seen as a key benefit.
“While it’s not surprising to learn that social purpose is seen as a priority for business, the big challenge is to ensure more business leaders define the real purpose of their business, and identify how they are going to achieve that purpose,” said Professor David Grayson, Director of the Doughty Centre. “By developing clearly defined strategies and identifying new, disruptive approaches now, businesses can better ensure success and relevance in the future.”
Last year, twenty-nine of the world’s leading CEOs and companies joined CECP, a coalition of CEOs united in the belief that societal improvement is an essential measure of business performance, founded in 1999 by actor Paul Newman. These CEOs and companies work with CECP to elevate their societal investment strategies and connect them to their core business, as they are a direct line to employee engagement, innovation, customers, new markets, stronger brands and sustainability, as well as mitigating risk and building trust. CECP convenes and supports CEOs, whose companies committed $14 billion in 2012 to solving pressing community challenges. CEOs wield great power and responsibility to help the world take on global challenges, such as global warming, according to Andrew Winston.