Making a good profit isn’t enough to secure your company’s future, says Burson-Marsteller’s Jeremy Galbraith
13th September 2013
Corporate purpose is a key part of a company’s DNA; it is the reason for that company’s existence. Corporate purpose guides, and is the basis of, the mission, vision and values of a company. It is the underlying rationale for corporate activity and decision making at all levels.
Back in 2008, when our agency first started conducting research into corporate purpose, cynics argued that, come an economic downturn, companies would return to solely focusing on the bottom line. However, faced with today’s challenging economy the European communications directors of some of the world’s leading companies, interviewed for our 2013 research, said the reverse is true – corporate purpose is now a business fundamental, essential to a successful corporate strategy – it underpins and drives business decisions across an organisation. As Jane Olewang, CEO of Virgin Unite, said at the research launch, quoting Sir Richard Branson, it’s very much a case of “Screw business as usual”.
Corporate purpose is not a communications tool – it should, first and foremost, be defined by the business under the CEO's leadership. Communicating it comes second. However communicating it clearly, internally and externally, is one of the key strategic tools for companies seeking to build trust and reputation with stakeholders. People expect more from business than a healthy profit margin – they care about why companies act in the way they do, not just what they do. And social media has provided them with more tools than ever before to access, share and work together to act on this information.
So as globalisation, and the democratisation of information, have empowered consumers, the brightest and best organisations have adapted. They have recognised that key to survival in this potentially hostile environment is acting in a way that is consistent with, and aligned to, a clearly defined corporate purpose. Our respondents were in agreement that purpose is a company’s contribution to society beyond the product or service produced. The view was that “it’s not good enough for the company to run better. It needs to impact the world.” While corporate purpose is often viewed as very much an external tool our research showed it is also produces huge benefits within an organisation – helping to align internal action to the external brand position a company seeks to hold and to motivate and enthuse staff.
As one communications director said “The question is, do you work for a company simply for the money or because you identify with its values?” and for most of us the answer is probably a combination of the two! Corporate purpose is key to helping build a strong attachment between employees and a company, providing them with an articulation of why they are doing what they do. This is why the success of purpose as a guiding light for business lies with the leadership team. Leaders galvanise people by setting both the culture and the strategy. If the beliefs and value systems of the leadership team – or key individuals on that team – are at odds with the organisation’s definition of purpose then the chances of success are slim. As Geoff McDonald, global vice president of human resources at Unilever, said at the report launch “In the battle between culture and strategy, the winner will always be culture.”
The full report of Burson-Marsteller’s Power of Purpose study was published on 2 September 2013.
Jeremy Galbraith, EMEA CEO of PR firm Burson-Marsteller