Giles Rafferty, Corporate Communications
Doing it on Purpose
Having a Corporate Purpose must be one of the oldest, latest things. There is good degree of noise around the concept of ‘Corporate Purpose’ and it may feel like it has become a buzz word, but it is much more than that and always has been.
A Corporate Purpose is a company’s right to exist, its social license to operate and it is a driver of long term, sustainable success. Whether expressed or not, it is present when a company is founded and guides its evolution. When expressed clearly and concisely a corporate purpose underpins operational performance, enhances corporate reputation and shapes corporate culture.
A 2016 PwC survey of 275 CEOs revealed nine out of 10 had a clearly stated and defined purpose and almost two thirds said emphasising this purpose improved their top line.
Attempting to quantify the impact of a company’s purpose through its positive impact on revenues and profits somewhat misses the point. When a clear purpose is embedded in a company it drives the business to do good while doing well. Purpose aligns the behaviours and decision making of employees with a company’s core values. This alignment allows the right decisions to be made which builds trust amongst, and reinforces relationships with, external stakeholders, such as customers, suppliers or regulators. Purpose underpins the sustainable delivery of financial performance.
Looking beyond the purely operational benefits of leveraging purpose within a business reveals its ability to deliver reputational benefits. Purpose builds a reservoir of goodwill that will help a company manage challenge. In our ever more connected world the pace of change is accelerating. Blogs, social media and on-line commentary mean companies can find themselves at the centre of conversations they didn’t even know were taking place. Issues have the potential to evolve and be amplified into significant challenges before a company is aware of them. It is practically impossible to monitor every platform, nor is it necessary to engage in every conversation or obvious which issues may become inflamed. Having a strong corporate reputation earns a company the benefit of the doubt, the right of replying and a speedier recovery should a crisis emerge. This is exactly the situation Kathmandu faced in mid 2016.
Kathmandu’s core purpose is to inspire adventure in everyone and it underpins several corporate responsibility initiatives around maintaining the environment, the outdoors, where adventure happens. Notably a zero waste to landfill by 2018 .
In May 2016 those environmental credentials were challenged by a student journalist blog about Kathmandu staff destroying stock and throwing it into a dumpster. There was outrage on social media sites and the story was run by national media agencies.
The story broke on a Friday, ran over the weekend and by the following Monday had run its course. As a purpose driven business Kathmandu had built a demonstrable 30-year track record of caring for the environment. They were responsive and engaged with the media and directly through social media. Their strong reputation and willingness to speak up contained the issue and minimised its impact. Kathmandu’s shareprice dipped slightly in Monday trade but recovered and made gains on the following Tuesday.
The reputational benefits to a purpose led culture come from ensuring it is obvious to external stakeholders. To achieve this, it needs to be understood and accepted by employees. It needs to championed by the CEO and senior management. Critically it needs to be authentic. The declaration of purpose solely as a lever to drive financial performance is likely to be counterproductive.
A Company’s purpose is central to its origin story, which means it should already be informing a company’s culture. The challenge is not to manufacture a purpose or redefine a culture. The challenge is to rediscover purpose and weave it into the fabric of a company’s corporate narrative.
In FIRST Advisers’ experience there are three key steps to leveraging purpose:
- Reveal – uncovering and expressing a company’s core purpose
- Embed – making sure there is buy in from employees
- Project – including purpose into all external communications
We have the expertise to run the perception studies and workshops that will reveal and define a business’s corporate purpose statement. We have the experience to build employee engagement strategies to help embed purpose into the culture of a business. We have the skills to identify the right communication moments to project purpose and weave key purpose messaging into communication strategies. Together these steps represent an integrated purpose strategy that delivers improved and sustainable financial performance, while creating the competitive advantages of a strong corporate reputation.