Purpose is now considered a core business strategy practiced by B2C and B2B
companies around the world. How it empowers and powers organizations to embrace
extraordinary new stakeholder responsibilities is profound when developed,
embedded and activated authentically.
Authentic purpose equals thoughtful, real and sustained actions that impact the
business internally and externally, while having a positive impact on society.
And the organizations with the most authentic purpose have it baked into their
cultures, mandated and modeled by CEOs who understand their leadership role.
Why is this more important than ever?
COVID-19 accelerated the adoption and integration of
purpose,
according to a recent Accenture report: “Winners will combine the sprint on
their COVID-19 responses with the marathon of longer-term societal and economic
impact. Losers will be, at best, forced to rebuild their brands, values and
reputation from the ground up. Or at worse, they will simply disappear.”
Accenture says companies that define purpose thoughtfully become a “living
business — one that can sustain growth through hyper-relevance” while addressing
customer needs.
The stakes are high — really high. Do purpose right and organizations can become
magnets for talent and shift to the fast track for growth. Purpose that is lived
authentically in an organization ignites employee potential; helps companies
push beyond boundaries; inspires new products, services and lines of business;
sparks innovative collaborations; and deepens supply chain, customer, and
consumer relationships.
Unilever, through its
decade-plus commitment to the Unilever Sustainable Living
Plan
(USLP), is the most desired consumer products employer in 50 countries. Because the USLP
is authentic, strategic and deeply integrated throughout the business,
Unilever’s 28 Sustainable Living Brands grew 69 percent faster than those
without purpose at their core and delivered 75 percent of the company’s overall
turnover in 2019.
Recent research backs this
up:
65 percent of consumers want businesses to take a stand on issues important to
them, and that rate rises to 74 percent among 18- to 39-year-olds. 47 percent of
consumers expect brands to translate values and promises into new and innovative
products and services. In terms of social issues, when companies don’t act with
speed and sincerity, 43 percent of consumers will leave that brand.
What drives an authentic social purpose?
“What people think-say-do should be aligned,” former Unilever CEO Paul
Polman said in a Greenbiz webcast. Purpose-driven companies and leaders,
Polman said, should “create value through values. Set targets that are hard to
reach. Move from a circular economy to a regenerative economy. Lead as a CEO to
fight for what is right. Put self into the service of others.
“CEOs today have a knowledge gap and a courage gap. They don’t know all. They
need to ask for help. Be human and show vulnerability.” Do that, Polman says,
and people will want to work for you.
Unilever recently celebrated the 10th anniversary of the
USLP, sharing
insights into its purpose journey, noting both victories and misses for its
brands — again demonstrating the organization’s humility and humanity — while
underscoring that purpose is a journey, not a destination.
The power of authentic purpose comes from integrating it into an organization
such that it generates shared value for all
stakeholders.
Where an organization is on this journey will have an even greater impact in
2021. Here are my suggestions for organizations to define and integrate a truly
authentic, activated purpose.
1. Set up purpose to serve as a navigation system for culture
Image credit: Aaron Burden/Unsplash
Culture influences everything: employee value proposition, risk and compliance,
retention (especially for Millennials, who care deeply about purpose in
their
work),
employee productivity, customer and supply chain relations, brand
differentiation, organic growth and more.
Yet, Gallup found that only 41 percent of
employees
know what their company stands for and what makes it different from competitors.
Culture begins with an organization's purpose, but it's expressed by leaders'
behavior. That's why purpose is increasingly used as a “north star” for making
tough decisions: An organization's real values come to light under pressure. How
leaders behave in challenging times — COVID-19 being perhaps the greatest event
of the last century — demonstrates whether the organization’s purpose is real.
It also indicates what must change to create the culture that’s desired.
Because intangible assets such as culture average 52 percent of an
organization's market value (and in some sectors as much as 90 percent), it’s
important that purpose is led by CEOs, says Cyrus Taraporevala, President
and CEO of State Street Global Advisors. This includes making clear,
purpose-driven actions; as well as communicating internally and externally about
the role and importance of purpose.
By connecting people with a sense of higher purpose, leaders can inspire them to
bring more energy and creativity to their jobs. They take more risks, learn more
and raise their game.
Here’s how some leaders express and shape their purpose cultures:
AB InBev: To provide clarity for its 175,000 employees across 500 brands in
100 countries, AB InBev has a clearly stated Manifesto:
We are a company of owners. We believe that you get out what you put in. We
strive to be the best pursuing our dream, committed to improving lives for
more people in more communities. For centuries, we've been bringing people
together through sports, through music, and through culture, creating
moments, both everyday and extraordinary moments, seizing every occasion to
serve up more of what people thirst for.
For this reason, we pour ourselves into our work from farm, to brewery, to
market, taking pride and ownership in every step, crafting great beer from
the best natural ingredients, paving the road for a better tomorrow that
we're proud to be part of and celebrating the great times that bring us
together. We are AB InBev, bringing people together for a better world."
AB InBev’s purpose, “Bringing people together for a better world,” links to a
roadmap of 10 principles that mold the company’s culture. “It really defines not
only who we are and how we act, it unifies the company’s 500 brands and drives
all of our people,” said Pablo Jimenez, former CCO of AB InBev.
Mars Inc.’s purpose, “The world we want tomorrow begins with how we do
business today,” is a simple but profound statement that opens the lens of
possibility for Mars’ new businesses and products. It also guided the company’s
rapid response to COVID-19. Mars’ purpose is guided by the Five Principles of
Mars: (Quality, Responsibility,
Mutuality, Efficiency, and Freedom), the organization’s roadmap for
decision-making and guide to beliefs and actions for their 125,000 associates.
The Five Principles were powerful for Mars during COVID, as the company had to
make significant financial decisions. To which, leadership asked: “How does this
contribute to the world we want tomorrow?” Mars embeds its purpose within the
organization through frequent communications, dynamic discussions, applying
purpose as a lens for decision-making, and incorporating purpose KPIs into
performance reviews for senior management and the company’s top 300 leaders.
Procter & Gamble seeks clarity about who the “hero” is to develop its
purpose-led brands. “It is not the brand or the company. For P&G, it’s the
consumers whose lives we can make better,” said CCO Damon Jones. This
approach allows P&G to think about its value proposition in a very different
way.
2. CEOs must have courage and embrace servant leadership
CEOs bring their commitments to life via servant leadership — constantly living
their organization’s purpose.
Starbucks is an extraordinary best-practice case study of how to embed
purpose into culture. “How can I ask my partners [employees] to support
Starbucks, if I don’t support them?” said former CEO Howard Schultz. Benefits for partners range from “bean stock” to comprehensive
health coverage and a free online college
education.
In response to the pandemic, Starbucks supplemented this with 20 hours of mental
health coverage.
“Authentic leaders also know their blind spots. They know when to find others to
help,” Jones said.
Purpose-driven companies recognize they cannot be divorced from their community
and the responsibility to be part of society. “When you are part of the
community, you're expected to be part of the solution,” says Jimenez. “So that's
why, by being part of communities and by realizing that our mission is to bring
people together, we came up with different ways and forms to land this — whether
by sustainability efforts, by our smart drinking goals, by our efforts
concerning road safety.”
Action must be modeled by C-suite leaders. “Authentic leaders know their blind
spots. They know when to find others to help,” Jones says.
3. Understand that the process to develop purpose takes time and must be across levels
When Paul Polman started the process to reinvent Unilever, he led 400 senior
leaders through comprehensive training to identify their personal purpose. Only
in doing this could Polman set the groundwork for his visionary transformation
of the
company.
As the company neared the 10th anniversary of the USLP, thousands of employees
went through a similar discovery process to find their personal purpose —
designed to engage them in the next 10 years of the Plan.
Mars, a family-owned company, spent two years with senior leaders to develop a
purpose based on the organization’s decades-old Five Principles.
AB InBev took months of analysis to develop its purpose, including employees
from regions where the company operates, and colleagues from different levels
and departments. Feedback and insights were gathered via focus groups, surveys
and the thoughtful reflection of conversations with senior management.
4. Take the long view and set stretch goals
Image credit: Simon Migaj/Pexels
Companies with an authentic purpose take the long view. AB InBev states this
clearly in its purpose: “Bringing people together for a better world, for the
next 100 years.”
Mars views its purpose in terms of generations, not quarters. “Following our
collectively developed purpose ensures we stay family-owned for the long term,”
said Andy Pharoah, Mars’ VP Corporate Affairs and Sustainability.
In the early years of his Unilever leadership, Polman took the courageous move
to stop providing quarterly guidance to the financial markets. He said pointedly
without giving that expected guidance, “If you don’t want to invest in my stock,
then don’t.”
To shape and deliver on an authentic purpose, set stretch goals that seem almost
impossible to achieve. "It takes the same amount of effort to dream small or to
dream big; but we want to dream big, of course,” said Carlos Brito, AB
InBev’s CEO.
Unilever wanted to be ambitious as it structured its purpose — “Making
Sustainable Living Commonplace” — and the USLP. “If we set up really ambitious
objectives, it would stretch people to think and act in a completely different
way. Not incrementally,” said Karen Hamilton, Unilever’s Global VP of
Sustainability, Divisions. “The goals were ambitious to drive transformational
change at scale: improving the health and wellbeing of 1 billion lives; halving
their environmental footprint; or enhancing the livelihoods of 100 million
people. They required us to go well outside our comfort zone,” she said.
Tata Consultancy Services (TCS)’ purpose is “to make it a joy for all
stakeholders to work with us.” To ensure purpose is authentic, “you have to
bring the same vigor and the same capabilities that you apply to your business,
problems, and how you support your customers to solve societal problems,” said
Chief Social Responsibility Officer Balaji Ganapathy. To activate purpose
throughout the organization, TCS applies the 4Cs: Intellectual, Technology,
Human and Financial Capital.
“I think bringing the power of our technology; driving it by embedding it into
the company’s purpose; and leveraging the skills and expertise of employees, as
well as leaders in the larger community, is where the opportunity lies for us to
make significant change in society,” Ganapathy said. “Purpose is the new
technology, symbolizing that today and even more so tomorrow, when integrated
into the core of the business, purpose can create significant shared value for
all stakeholders, thus forming a new type of capitalism.”
5. Engage employees as your growth engine
Cultures with a well-defined purpose attract and keep top talent, as well
as engage
workers more
deeply. Engaged workers perform better, and so do their companies.
AB InBev employees know their role because the organization’s manifesto is
actively lived by the CEO down to employees at each brewery around the world.
The global brewing giant’s employees are treated as if they are owners, and
thus take the company’s results personally. Employees care and act because their
culture and purpose make them feel it is their company. As owners, they identify
gaps and areas that need improvement, and then develop solutions. This
purpose-driven culture creates an environment where people are never completely
satisfied with their results, so they are in a never-ending process of
continuous improvement.
“Having this clear culture, clear purpose, the simple principles — and then
living them and breathing them — has helped our company exponentially grow, as
well as bond your people together into just loving the company overall and their
individual brands,“ Jimenez says.
At TCS, purpose is built into each employee’s career plan, helping them discover
and live their personal purpose by connecting it with the company's values.
During their three-month orientation period, TCS employees are paired with a
nonprofit as their first client. Employees are also paired with seasoned mentors
and an agile learning model to produce an early “win” for the relationship.
“This approach creates an understanding that, not only can they earn money by
doing this job, they can fulfill something that is more innate and inherent,”
Ganapathy says. “And this has been a wild success for us in terms of retention —
making us one of the leading companies in the industry in terms of retention,
with annualized global rates of 87-88 percent.”
Ganapathy talks about a sophisticated approach to move employees from
participants to custodians. TCS has carefully architected a journey for their
employees to move from volunteers to mentors to societal champions, which
encourages deep ownership of partner relationships and outcomes. That approach
garners an astonishing 97 percent approval of the company’s community engagement
and realizes 85 percent participation of business leaders in community
engagement across 100 business units. Employees can take diverse actions:
joining a nonprofit board, spearheading a pro-bono project, leading a month of
community service, or helping to create online platforms providing technology
solutions for community partners.
“You need to enable your workforce to fulfill their broader purpose that goes
far beyond volunteering,” Ganapathy said. “It is about driving a culture. So, if
you're doing the first step right — which is embedding purpose — you will have
more meaningful opportunities to share and connect that to what people are doing
on a daily basis in their job, and extending that to the work that they can do
to support for the community.”
6. Commit to real action, both internal and external
What is the role of an authentic company today in social issues? COVID-19
and the movement for racial equity pulled back the curtain on companies and
brands who said they were purpose-driven. While millions of dollars were donated
to deserving nonprofits, actions spoke even
louder.
Companies with an authentic purpose acted swiftly and decisively.
Procter & Gamble’s path to purpose for each brand involves discussing the
strategy for the business, then uncovering a core consumer insight to deepen
that brand’s authentic connection to people that leads to their societal
involvement. “Know where you have the right to play,” Jones said. Insights are
uncovered from traditional consumer research, social listening, as well as
engagement with stakeholders ranging from supply chain partners to NGOs. P&G
also consults with potential “adversaries” to illuminate weaknesses and
opportunities.
P&G’s COVID-19 response was rapid. More than 30 brands immediately took actions,
without corporate guidance, in countries around the world. Responses included
modifying factories to manufacture PPE or hand sanitizer. The company’s local
impact was accelerated thanks to years-long relationships with more than 200
community organizations. “We also had our set of principles that had been
developed from our values,” Jones said. “This enabled our people at the front
lines to act. The principles helped them with clarity of decision-making
authority so people could act swiftly.”
As one of the world’s largest advertisers, P&G recognizes its power to impact
society through messaging that incorporates consumer insights. This includes
supporting confidence and gender equity in women via the Always and
Secret brands, or taking a stand on equality and systemic racism. In 2017,
the company began addressing racism in its advertising with short films
including ”The Talk” and “The
Look.” These emotional and
provocative videos were designed to strike a cultural nerve and drive
disruptive
action.
And this was just a portion of P&G’s activation strategy.
Beyond using its advertising clout, P&G looked to its network of suppliers,
partners and agencies to activate the company’s “force for good, force for
growth” mantra in new ways; and advance gender and race equity issues. P&G
created new policies around diversity in its advertising — from talent to the
teams behind creative work. A fascinating and unexpected result: P&G found that
some of its best-performing ads were directed by women. “At the end of the day,
we want a more equal world — equal voices, equal opportunity, equal
representation,” Jones said.
Clarity of outcome is also critical: “Getting people to engage is the goal of
‘The Talk,’ ‘The Look,’ ‘The
Choice,’” Jones said. “Yet, they
don’t have to agree.”
A commitment to what I call ‘’story living” versus storytelling means an
authentic purpose has to become a fundamental part of a company or brand’s DNA.
“P&G had done this work for so long addressing race and gender that it gives
them the right to talk about it — not because we’re perfect, but because we’re
making progress,” Jones said.
AB InBev lives its purpose through bold sustainability commitments. As beer is
brewed with natural ingredients, AB InBev depends on a healthy environment. The
iconic Budweiser brand has committed to 100 percent renewable energy
throughout its manufacturing process, and boldly prints that goal on its cans.
This is a really big deal: 41 million Buds are consumed daily around the globe.
“When you're part of the community, you're expected to be part of the solution,”
Jimenez says.
7. Use purpose to ignite innovation
AB InBev’s goals were too ambitious for the organization to achieve alone, so
the holding company launched the 100+
Accelerator.
Through this program, AB InBev helps the next generation of innovators develop
ideas to solve the world's biggest environmental challenges. One is an equity
investment in
BanQu
to provide financial identities to farmers in developing countries, where many
do not have access to a traditional banking system. Another innovation
investment is RSU Brazil — a social enterprise with the mission to take
waste from landfills and transform it into clean energy, creating quality
biomass from waste.
3M also built an accelerator process
into decades of its operations. The company provides employees with 15 percent
of their time to tinker. This commitment has been extended through an internal
Tech Forum of 10,000 3M engineers, who invent new products and solutions on an
ongoing basis. The company has taken this further with a stunning declaration
called the Sustainability Value
Commitment,
whereby every new product will have a form of sustainability built in. Imagine
the impact, as 3M develops around 1,000 new products every year.
Mars built an accelerator into its business goals to activate its overall
purpose: “The world we want tomorrow starts with how we do business today.” Its
pet food business built off the purpose, announcing a competition “to become a
partner of choice for everyone willing to change the rules of the game in pet
care.” Pet care is now the largest division for Mars, from food to veterinary
services.
8. Partnerships are essential to drive change at scale
Image credit: Fauxels/Pexels
“Purpose is only real when you treat it as a business priority with the same
discipline as you would with any aspect,” Pharoah says. “And to scale, you need
to have partnerships. You cannot do them yourself, and no one has a monopoly on
good ideas. It has to be about creating a greater good, not just trying to
position yourself to gain competitive advantage.”
Companies with an authentic purpose seek partners for various reasons. Some seek
to address large systemic challenges — such as sourcing sustainable ingredients
to influence farming
practices
— and in turn, hundreds of brands and their products. Unilever co-created the
Roundtable for Sustainable Palm
Oil
to reinvent industry norms for sourcing the ingredient. Unilever also partnered
with UN Women to develop a global framework to drive safety for millions of
women in rural spaces.
Focusing on business capabilities is another means to enliven partnerships. TCS
has been the title sponsor of the TCS New York City Marathon since
2013. Through the company’s partnership with New York Road Runners, TCS has
made the largest marathon in the world into the most tech-enabled event of its
kind — providing an enhanced experience to runners and onlookers alike.
Expanding the event’s reach, the company works with youth groups to support the
larger cause of health and fitness. To integrate the Marathon into the
classroom, TCS invites 50 teachers from across the country to race, integrating
their experience into the classroom with computer science and digital innovation
experiences.
When creating a more responsible business model that reflects the needs of
society, partnerships are key to drive transformational scale with authenticity.
“Problems are so big and so complex that no one can really tackle them alone,”
Jimenez says. “But we do believe that by doing this with partners in a
thoughtful way, we can really make a difference and have a longstanding impact
that we can later replicate, based on evidence.”
9. Accountability and transparency are expected by all stakeholders
At a senior level, accountability is part of AB InBev’s KPIs, as well as part of
the annual operating plans for business units and leaders. At a more junior
level, employees have varied elective opportunities to practice accountability.
Mars’ sustainability goals are part of the KPIs of their CEO and EVP Global
Supply Chain. This reinforces the importance of C-suite leadership and
example-setting in activating purpose.
Setting stretch goals was a critical component of the USLP, which provided a
strong framework for action, coupled with clear goals and metrics. “We were
doing really well in things like reducing emissions from manufacturing,” said
Sarah McDonald, Sustainability Director for Unilever Beauty and Personal
Care. “But doing really badly in helping consumers reduce emissions. Trying to
persuade people to change their
habits
has been incredibly difficult.”
The marketplace has spoken about the characteristics of top-performing CEOs:
ranking #1 most important is a CEO’s positive contributions to society,
according to recent research by Morning Consult. The study found the drivers
of CEO reputation and performance have dramatically changed from earning public
trust, fairness, integrity, credibility and being a role model to drivers
related to purpose.
Yes, we’re living in tough times. An authentic purpose, actively lived, can be a
beacon in a world of disruption. Don’t just state your purpose. Live it by
following the guideposts above and these core principles:
1. Listen and observe every day. Be sensitive to the signals coming from stakeholders.
2. Embrace employees. They are looking for support and counting on leadership for truth.
3. Be accountable. Make commitments and report on progress.
4. Live your values, daily.
Welcome to 2021. Authentically live your purpose to make it your new normal and
your engine for growth.
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CEO
Carol is internationally recognized for her work in Purpose and CSR. Carol Cone ON PURPOSE is the return to her entrepreneurial roots and life’s passion: to educate, inspire and accelerate purpose programs and impacts for organizations, nonprofits and individuals around the globe.
Published Feb 23, 2021 7am EST / 4am PST / 12pm GMT / 1pm CET