Can organisations really pursue profit and purpose?

Written by
Sarah Wild, Editor, Changeboard

15 Mar 2020

15 Mar 2020 • by Sarah Wild, Editor, Changeboard

We spoke to business leaders and industry experts to find out what companies are doing around purpose, meaning and culture, in practical terms. 

In August last year, the CEOs of 181 major US companies issued a statement redefining “the purpose of a corporation”. Members of The Business Roundtable (who include Amazon’s Jeff Bezos, Apple’s Tim Cook and Fox Corporation’s Lachlan Murdoch) asserted that shareholder value is no longer their main focus. 

Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals. 

“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” the statement read. “We commit to delivering value to all of them, for the future success of our companies, our communities and our country.” 

One notable signatory was BlackRock chief Larry Fink who, in January, announced “sustainability as BlackRock’s new standard for investing”, building on previous pledges to shift towards “accountable and transparent capitalism”.

In his 2018 annual letter, he wrote that “BlackRock’s long-term success depends on our ability to fulfil our mission of helping people build better financial futures and to pursue our ultimate purpose of helping more and more people experience financial wellbeing” — making explicit the link between his company’s growth and its “unwavering commitment” to its purpose. 

“A commitment to purpose is equally important for inspiring employees and attracting the best talent,” he added. 

Social drivers 

While the proof of intent lies in these companies’ long-term actions, the social drivers are clear: in the wake of the 2008 global financial crisis, and in the shadow of devastating climate change, there is a growing appetite for all organisations to be ethical, sustainable and to have a higher purpose at their core. 

Younger generations, in particular, expect to work for responsible, purpose-driven companies and to be 

able to align their own values with those of their employers. Notably, public discourse around ‘corporate meaning’ increased five-fold between 1994 and 2016, according to research by Oxford University and EY. 

At a time of low unemployment and almost limitless consumer choice, public attitudes also fuel commercial drivers. If organisations want to attract and retain both their talent and their customers, they will need to embrace authentic purpose. 

“There’s something going on in the world about the inside and outside of organisations not being different,” says Liz Wilson, chief operating officer of creative agency Karmarama, part of Accenture Interactive. She has noted “a groundswell of interest” from firms wishing to communicate their ‘inner purpose’ in their employer brand and employee communications. 

“The whole of life is a lot more transparent with digitisation and social media, and I think big companies are finding that what they promise the world in their advertising has to be delivered in everything they do; how they ask their people to behave,” she explains. “Having a strong sense of inner purpose is how you can frame that. 

“Organisations such as McDonald’s are telling us where their beef and eggs come from, showing the integrity of what they’ve promised in their behaviours. An inner purpose is a frame that can guide and empower employees at every level of the organisation.” 

For Karmarama, ‘inner purpose’ equates to “having a long-term vision that’s inspiring but achievable; something people can engage with practically and emotionally” (see box, p25). This is a must if we want people to bring their whole selves to work, and especially vital in a volatile and uncertain world, where purpose represents “the lighthouse in a storm”. 

“Almost all organisations we talk to nowadays are going through some kind of transformation, often digital transformation, which involves lots of different employee behaviours,” says Wilson. “The real sustainability have always gone hand in hand. 

“We’ve been around for some 180 years now and we’re a very long-term business, looking after people’s pensions and investments,” says John Godfrey, corporate affairs director at Legal & General. 

“We tend to take a view that equates to 40 years or longer. When you’re operating long-term business, there’s no point going hell-for-leather to make as much money as you can in the shortest time possible, while cutting corners; you have to be relevant and around for a long period of time.” 

For other firms, this trend is a more recent evolution. Multinational company Sage Group provides business-critical software to SMEs, with a purpose “to transform the way people work and think so they can thrive”. Its overarching value is the morally robust “we always do the right thing”. 

“We used to sell CD-ROMs to customers: ‘here’s your software and here’s a support number if you have any questions’,” explains Jorge Aisa Dreyfus, executive vice president, talent, capability & culture, at Sage. “Now, we're a ‘software-as-a-service’ subscription business, which means we have an ongoing relationship with customers. We need to think about relationships in a different way.” 

In addition, “we live in a more transparent world”, he continues “Gone are the days where you could hide your practices or fool customers. We look at Glassdoor and sometimes we get feedback that we don’t like to see, but it’s important for us to see it. The same goes for our customers. We have a five on Trustpilot, but it’s critical that that’s the case.” 

He acknowledges that “always doing the right thing” is an aspirational goal, which must involve supporting people to highlight poor practice. “We are very big on empowerment and accountability,” he stresses. “People need to feel they can raise their hands.” 

Such “psychological safety” enables the “self-policing” of purpose, points out Wilson. “You can call out bad behaviour because it’s in the service of the purpose, not of an individual or a political aim. You’re almost working for a higher authority,” she says. 

Identifying purpose 

For many organisations, the question is not why they should pursue purpose, but how to identify and leverage it effectively. While articulating values is a part of the process (creating an accessible shorthand) it has little to do with inauthentic sloganeering. 

“The worst thing is when the board has an away day, somebody paints something new on the wall of reception, the CEO makes a big statement in the world... and then everything carries on as normal. That’s a disaster,” argues Wilson. 

“It needs to be something that has meaning,” she asserts. “For us, an inner purpose is the ultimate definition of what an organisation wants to contribute to the world, over and above products and profits. 

“There are two elements to an effective purpose,” she continues. “First, it has to inspire and motivate. It has to galvanise me to want to do my very best work. But I have to be able to see how that purpose relates to my role in the organisation. I think that’s a really important part of the communication around purpose: working with individual communities and tribes to make that purpose not just resonant but relevant.” 

What it isn’t, she argues, is “a process of inventing or creating something that you Sellotape on the outside”. Rather, it’s “a mining exercise to find the parts of the organisation that really motivate and inspire people. 

“Today’s organisations have a huge amount of data; by drawing on cultural, emotional and qualitative insights, what we’re often doing is uncovering a truth that already exists about the business.” 

For example, when working with The British Army to help boost applications, Karmarama conducted qualitative interviews, quantitative research and data analysis to uncover a deeper human benefit to joining, above and beyond skills development and adventure. 

This uncovered a powerful driver that attracted people to the armed forces: the notion of belonging to a brotherhood or sisterhood, of experiencing powerful bonds that support you and encourage you to grow. 

Using a platform of ‘This is Belonging’ to give the Army a purposeful position, it succeeded in dramatically increasing applications: 2017 saw a 31% increase in regular soldier applications and in 2018, applications reached a five-year high. In the first week of 2020, the record was broken for the highest number of applications to join the Army in a single day. 

While the slogan was bold and appealing, its value lay in tapping into an existing truth. Similarly, companies can talk to their people in meaningful ways to excavate their own truths. 

To this end, Sage conducted a three-day online hackathon with the company’s 14,000 employees, across 20-plus countries, as part of work to “reshape and fine-tune” the company’s culture, values and behaviour, amid transformation. 

“We partnered with Hotspots Movement and Walking the Talk,” explains Aisa Dreyfus. “It was about insight and engagement. During the hackathon, we ran 11 focus groups around the globe, interviewed the board, and spent a lot of time with our executive committee. We came up with something we all feel is ours.” 

Activating purpose 

For Groves, purpose is an outcome derived from organisations understanding their ‘character’ and what they stand for. “Pursuing purpose without understanding the cultural attributes that activate it is, at best, a waste of time, at worst, damaging to the cultural fabric of the business,” she warns. 

It’s “the activation of purpose that makes the difference”, she adds. “Activating purpose galvanises specific positive beliefs and behaviours.”

How do we activate purpose? “Experience tells me that what triggers purpose is trust — or trustworthiness,” explains Groves. “Organisations ask, ‘how can I build trust?’. 

And I say, ‘if trust is an outcome of being trustworthy (in terms of both competence and ethical behaviour), so purpose is an outcome of being purposeful about how we interact with each other, with valued behaviours such as honesty, integrity, and courage. It’s what you do with purpose that matters; that’s what gives you the clarity, as opposed to coming up with the strapline of a purpose and trying to bolt something around it.” 

Ultimately, “if you’re seeking to build higher levels of trust in your organisation with key stakeholders, and to inspire your people to deliver improved levels of sustainable performance and responsible business outcomes, then activating purpose, not just through what you say, but what you do and how you make people feel, will be a business-critical imperative,” she concludes. 

Purpose washing 

In other words, not activating your purpose is a business risk, according to Groves. “It’s not a nice to have, it’s a must have, and HR has to reinforce this and align it to the strategy so that people believe in it,” she says. 

Rather than being a differentiator, corporate purpose is becoming intrinsic to sustainable success, with people swift to sniff out fakery. 

While purpose can evolve — as Wilson points out, “a purpose is not a tablet of stone, it’s a living thing” — inauthenticity is dangerous game. “I think people can tell the difference 

between a PR stunt and a meaningful intention,” confirms Emmanouela Mandalaki, assistant professor of organisations at NEOMA Business School. “We shouldn’t underestimate people’s social intelligence.” 

Can organisations really pursue profit and purpose? “Absolutely,” says Aisa Dreyfus. “In future, I don’t think they'll be exclusive; both pieces reinforce each other. Our commitment to the society in which we operate is critical.” 

“The key thing is genuinely delivering purpose, as opposed to talking about it,” adds Godfrey. “When we talk to employees here, what makes the difference is the case studies of what we’ve done. It becomes believable in a way t isn’t when it’s just about signing up to pledges and sending press releases. 

“It can take a huge amount of time to build a brand and its reputation, and you can lose that very quickly if you do something that’s socially unacceptable. The opposite is also true: there are pluses from behaving responsibly and doing the right thing; from being meaningful and relevant.”