Organizational Governance Organizational Governance

4 Ways CEOs Can Truly Drive Purpose in Companies

This is the ninth in a series of articles examining how business leaders and companies can transform their corporate culture in order to succeed in the midst of the impending Purpose Revolution. Find links to the full series below.

By John Izzo | Published 6 years ago | About a 9 minute read

This is the ninth in a series of articles examining how business leaders and companies can transform their corporate culture in order to succeed in the midst of the impending Purpose Revolution. Find links to the full series below.

A 2015 Harvard study showed that over 80 percent of global CEOs felt that activating purpose in their company would make a big difference for company performance (and profits) but only about one in three felt their company was doing a very good job of doing it. This intuition about their own performance is reinforced by surveys showing a 30 percent gap between what companies say and do when it comes to putting customers before profit. When given the binary choice as to whether their own company cares more about profits or the wellbeing of customer and society, almost 70 percent of employees choose profit! Consumers experience this same gap and say they are only confident that about six percent of brands are “good.”

In our new book, The Purpose Revolution: How Leaders Create Engagement and Competitive Advantage in and Age of Social Good, we explore how leaders can embed purpose in organizations and close this perception gap. Our research and experience working with over 600 companies shows the critical role CEOs play in driving purpose and closing the credibility gap that’s occurring. Today, we will explore four key ways CEOs can truly drive purpose from the top.

Change your message ratio

When we coach CEOs and senior executives on leading purpose, one of the first things we like to do is audit their current communication during internal meetings and presentations. This is an easy task: Simply find out the ratio of messaging from the top about purpose — in other words, about the real difference you make for customers and society — versus messaging about company profits or simply driving initiatives. In our work, we have discovered most senior executives communicate four times more about profits and tasks than they do about purpose. In other words, the message sent from the top is that efficiency and profitability are paramount, and this creates the wrong incentives.

Circularity by Design: How to Influence Sustainable Consumer Behaviors

Join us Thursday, December 5, at 1pm ET for a free webinar on making circular behaviors the easy choice! Nudge & behavioral design expert Sille Krukow will explore the power of Consumer Behavior Design to drive circular decision-making and encourage behaviors including recycling and using take-back services. She will share key insights on consumer psychology, behavior design related to in-store and on-pack experiences, and how small changes in the environment can help make it easy for consumers to choose circularity.

Tell me more!

With a shift in messaging, we can positively turn the culture towards purpose. We coached the president of a 20,000-employee division in a Fortune 100 company to simply change the focus of messaging so the ratio of profit to purpose was 50-50. The employees experienced a major shift in perception over the next four months that the company was driven by higher values that create a larger impact than just profit.

Leaders need to exercise caution, because they often send unintended messages that are subtle yet powerful. One C Suite exec told us about a meeting where the VP of Customer Service was telling a heart-stirring story about the positive difference the company had made for a customer. The CEO felt that the story was getting a little long and interrupted, saying “great story, but let’s move it along and hear the latest numbers from finance.” That exec told me the impact was not lost on team members, who understood immediately that purpose took a back seat to sales, even though making a difference for customers is the key to profits! That CEO was likely unaware of the way that subtle messaging impacts employees.

Make it personal

Another example is Simon Nankervis, president of Town Shoes and DSW in Canada. In launching their new purpose, “activating happiness through self-expression,” he widely shared his own personal purpose and how he wants to bring more of that into the workplace. Simon used his personal vision to propel the organization on a path to articulate a deeper purpose. Making it personal ignites different conversations within a team.

Change the questions you ask

Another way CEOs drive purpose is to pay deeper attention to the questions they ask. There is an old maxim in business that what gets measured gets done, but we think it more truthful to say that what gets asked about and focused on gets done. For example, workplace accident research shows that one of the single best predictors of a safe culture is how often senior leaders speak and ask about safety. Having consulted to Qantas Airlines, which is often named the “safest” airline in the world, we can personally attest to that truth. Leaders at Qantas constantly talk about safety practices and ask their teams to identify and discuss ways to enhance safety, so it’s not surprising that safety is at the core of workplace culture and that team members think it’s very important.

The same can be said of purpose — because the questions asked by leaders send powerful messages. 3M CEO Inge Thulin told us, “Whenever I go to any site in the world I try to make sure that the first question I ask is what they are doing about sustainability at that site.” He told us this is a deliberate decision on his part, because he wants people to know that sustainability is the number one thing on his mind, so that 3M will maximize the global impact of its sustainability initiatives.

CEOs need to be very aware of the questions they ask. If most of their questions to management and staff are about profit, sales, cost and the “numbers,” then the culture won’t truly reflect purpose. If, on the other hand, the first questions they ask are focused on purpose, vision and positive impact, this sends a palpable message. Team members connect with the greater purpose of the organization when a leader asks questions like: Did we delight any customers today? What did we do to make a better world since last time I saw you? What are we doing to improve our footprint?

The questions we ask reveal what matters to us, so we need to be careful and intentional about where we place the focus. It makes a huge difference.

Make every decision a purpose decision

CEOs must also remember that every decision is a purpose decision. In The Purpose Revolution, we call these purpose congruence moments. These happen when we make decisions using our purpose as our navigator and driver, just like Jack Sparrow did with his compass in Pirates of the Caribbean. If our decisions are congruent with our purpose, we demonstrate that our purpose is real.

When interviewed for our book, Walter Robb, former co-CEO at Whole Foods, talked about the company’s decision to stop offering non-sustainable seafood products. Before that, they were labeling sustainable choices but still offering customers a wide variety of products, including “red-rated” species that suffer from overfishing or are harvested using methods harmful to marine habitats. Robb said, “This was a moment of truth for us, where people decide if you are for real. Every time you have a decision to make, ensure the purpose is front and center as a driver of what you do.”

We advise many companies undergoing change — and we tell them to hardwire purpose congruence into decision-making. There is always uncertainty around big decisions such as launching a new product, cutting part of the business, and so on. But purpose congruence allows companies to stay on track during the process by consciously asking, “If we are serious about our purpose to make life better now and in the future for all stakeholders, what would we decide in this moment?” Simply by ensuring that core values are always on the table is a great way for CEOs to demonstrate that purpose is real and not just a sideshow.

CEO must be the Chief Purpose Officer

Finally, CEOs must see themselves as the Chief Purpose Officer. Muhtar Kent, former CEO at Coca-Cola and now Chairman of the Board, says. “I have to be the head of sustainability; it can’t be delegated to anyone else.” While all leaders within a company help create a culture of purpose, few voices matter as much as the CEO or business owner. In our experience, most CEOs have a good sense of purpose and are aware that using purpose is an important way to drive success in their business. However, we found that CEOs need to be more cognizant of the perception and impact they have through their messaging and the questions they ask. The sum of all the smaller interactions carry significant weight, and in the end, purpose begins at the top and it can’t be delegated to anyone else.

Creating Engagement and Competitive Advantage in an Age of Social Good, the series:

John Izzo

President, Izzo Associates
Purpose Revolution Group

Dr John Izzo provokes greatness in people and companies. He stretches leaders to dream even bigger through intentional leadership. He recently co-founded Blueprint, an NGO at the University of British Columbia that seeks to create a more sustainable world through enhancing men’s contribution to communities. A bestselling author, John’s books include the international bestsellers "Awakening Corporate Soul," "Values Shift," "The Five Secrets You Must Discover Before You Die," "Stepping Up" and "The Five Thieves of Happiness." His latest, "The Purpose Revolution (How Leaders Create Engagement & Competitive Advantage in an Age of Social Good)," was published in March 2018.

Tags:

3M Company