‘Purpose’ has been key to the recent commercial zeitgeist - even before the COVID-19 crisis - influencing thinking of our largest corporates, banks, regulators, global investors and indeed leaders representing 30% of US market capitalisation. There’s growing recognition that purpose is a commercial imperative, creating value for both shareholders and stakeholders, amid evidence of linkage between purpose-driven companies and strong financial performance.
By ‘purpose’ we mean an organisation's reason for existing beyond just the financial, but importantly it sets out why the organisation matters, building on its core differentiating capabilities, and articulating the value of the organisation to wider societal stakeholders: government, society, employees, communities.
COVID-19 has thrust this relationship between companies and societal stakeholders into the spotlight more than ever before, with increased expectation on businesses proactively solving (and not growing) challenges arising from the pandemic; the government’s summer economic plan re-emphasised the valuable role business in expected to play in helping the UK recover from the impact of the pandemic. People will remember long after the crisis how companies lived their purpose, and how they treated employees, customers, suppliers and society; which will ultimately create and lose value for businesses.
During the initial crisis and subsequent recovery, many organisations learnt the value of having a defined and authentic purpose. There are numerous positive examples of businesses who innovated to utilise their core capabilities and drive societal value – from the direct (high fashion adapting to create PPE, under-resourced companies redeploying staff) to the indirect (lenders providing mortgage holidays, companies providing flexibility to staff). Conversely there are a number of companies who lost significant brand value and goodwill from employees and customers where actions were perceived as self-interested - those self-inflicted wounds may yet leave long-lasting scars.
There is now an opportunity for organisations to take the momentum from how they managed the immediate crisis, and use it to drive meaningful, long-term changes as they transition from a phase of crisis management, and into one of recovery and transformation.
Purpose is increasingly not just CSR or a box in which to place ‘crisis response’ – it’s an opportunity for businesses to think about their place in society. And the organisations which unlock the most value from this unique opportunity will use it as a ‘North star’ to guide decisions.
Successful change while maintaining BAU is a familiar balancing act for businesses. But with BAU out of the window, organisations have an opportunity to think differently and innovatively, addressing areas of long-standing pain and inefficiency. This can involve rethinking organisational positioning, perception by stakeholders, but also reviewing core offerings and delivery mechanisms. Creating a future-proofed organisation needs to be carefully managed and communicated but purpose can act as a guide to these decisions.
But this goes beyond the operating model.
We’re seeing increasing calls to use the crisis as an opportunity to Build Back Better, with 200 leading businesses, investors and business networks offering support to the Government to deliver a COVID-19 recovery plan that builds back a more inclusive, stronger and more resilient UK economy. And now with the government’s summer economic plan centred on job creation and retention, career and skills development, and green infrastructure investment, there is a significant opportunity for the priorities of government and business to align in response to societal and environmental challenges.
The most innovative businesses are using purpose amidst the current disruption to take stock, reset and reshape an organisation into one fit for the future; meeting societal expectations while addressing commercial pressures.
1. Set out purpose-driven ways of working, showing appreciation through empathetic flexibility not tokenistic gestures. Combine articulation of a strong, clear message top down, whilst encouraging and supporting bottom-up engagement. This strengthens advocacy through the organisation by addressing the common challenge of cascading purpose through ‘the frozen middle’ of middle management. Bottom-up engagement can involve creative experimentation with crowd-sourcing solutions; and utilise ‘Authentic Informal Leaders’ – the positive, energising people, typically exemplars and networkers, who can bring together your community. This articulation of purpose for your stakeholders is of course only the start. To truly realise the value of purpose, organisations need to bring it to life by embedding it in their strategy, operating model and culture
2. Don’t allow a vacuum in your comms to your customers and external stakeholders – even where the message is ‘we don’t know yet, but here is how we’ll work it out’. People are sympathetic to uncertain plans in a changing situation, but can lose trust if there’s a vacuum of information.
3. Find the win-win areas of flexibility: Amidst sustained uncertainty, suppliers and customers will need to make unusual asks, and may be more wary of commitments. This continues to be a time to explore mutually agreeable flexibility, without creating unnecessary risks, developing stronger relationships that will sustain beyond the crisis, and provide a platform for a successful recovery.
4. Bring functions together: Purpose by its nature straddles people, technology, marketing, risk and much more. To drive innovation and diversify thinking, bring these functions together when considering how purpose can drive decision-making in both the short and long-term reaction to the crisis.
5. Draw on your core for the ‘no regret moves’: While the initial few weeks saw a flurry of activity, and there will still be demand for businesses to provide support to those addressing the virus at the frontline, businesses now have the opportunity to play a significant role in getting the economy restarted. To make real impact, organisations will need to look at core differentiating capabilities and potentially underused assets to really drive value. Regardless of size, businesses can make a positive impact….
6. But listen to what is needed: As society and the economy begins to recover from the pandemic, there is a defined role for business to act as a catalyst on that road to recovery, whether through stimulating demand, creating new job opportunities or transitioning to a greener future. However, it’s critical that businesses take a considered approach and leverage their influence in areas where they can have a meaningful impact on the recovery. To do this, focus on your established networks and partners; listen to what they need, and work with them – make a difference through showing understanding, empathising and collaboratively seeking solutions.
BP set out its purpose-led ambition a month before COVID-19 was declared a global pandemic, but doubled down on its intent in the light of the crisis. CEO Bernard Looney was quick to recognise not only the risk and harm society faced following the outbreak of the pandemic, but also the opportunity: “We can come out of this crisis closer, more collaborative, and more caring, with all the benefits that brings for society and the planet.” However, this will only be possible if organisations engage with their purpose authentically - it cannot be a conceptual piece that is owned by leadership. Purpose needs to be embedded throughout an organisation - top-down and bottom-up - to realise meaningful benefits and change.