With the prospect of another lockdown looming (albeit lite-r than the last), it’s perhaps even more of a challenge to imagine what the ‘new normal’ might look (and feel) like.
Many wise heads have explored many potential outcomes, with McKinsey summing up
a white paper early in the crisis, the conclusions of which still ring true: “How exactly this crisis evolves remains to be seen... especially as we begin navigating to the next normal”.
The fact is no-one really knows. While most people can agree that the future will involve considerable economic, societal and, most likely, personal pain, will that be a ‘new normal’, or - perhaps less dramatically - the ‘next normal’? (There is a difference.)
And what might be the implications for how companies act and position themselves?
The seeds of an answer might well be found in the pre-Covid world, when two significant corporate governance directives occurred.
One emanated from the US Business Roundtable, an organisation that represents CEOs from quite literally the A-Z of America’s biggest companies (e.g. Amazon, Apple, General Motors, JP Morgan Chase, P&G, UPS, Walmart), issuing a new statement on the ‘Purpose of a Corporation’. Signed by all 181 members, it in effect overturned the key tenet that has existed for the past two decades for why a USA company exists - shareholder primacy.
In its place, came a commitment to all stakeholders - shareholders, of course, but also customers; employees; suppliers and communities. Justifying this significant change in corporate focus, the Roundtable concluded: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
Meanwhile, this was echoed in the UK by the Financial Reporting Council’s own initiatives around Purpose, culminating in January 2020’s publication of their “Annual Review of the Corporate Governance Code” and its conclusions that “...the purpose of capital markets and the role of companies and investors (is) in solving... economic, environmental and societal problems”.
At the heart of their recommendations - for which read ‘expectations’ - lay a belief that companies should commit to having a clearly articulated Purpose; one developed from broad-based stakeholder engagement and which, in turn, influences - and is influenced by - company actions and behaviours. Central to which is corporate culture and values.
And the relevance of both of these initiatives to a post-Covid world?
For that, we could do worse than return to another McKinsey article entitled ‘Demonstrating corporate purpose in the time of the coronavirus”:
“In this crisis, executives will choose either to stay on the sidelines, or engage; and if engaging, either to lead, or to follow.
Those who have carefully honed a sense of company purpose will find a foundation and set of values that can guide critical and decisive action. For others, this moment can represent the first steps toward defining their corporate purpose in a deliberate way.
Is this the moment when purposeful companies demonstrate how to use profits for good, or that shows how everything a company does can be for good?”
To be fair, most FTSE and AIM-listed companies - along with other larger corporates - have not only embraced these expectations, but made considerable progress in both defining their Purpose - often launched via their Annual Report - and beginning the process of embedding what that means in terms of actions and behaviours.
That said, for many CEOs Purpose still remains a challenging ‘soft’ concept, often defaulting to CSR and, as such, features in the ‘Nice, but not essential to have’ column of corporate priorities.
So how should a company approach Purpose in a post-Covid, new normal world?
That will largely depend upon where they are on their journey (and you may well wish to be selective in your reading of the following, depending upon your particular situation).
Initially, there will be the need to define what Purpose is... and isn’t. It’s not to be confused with Vision, Mission and Values, but is the answer to the question “Why do we exist?”.
This will usually be informed by both internal and external research to create a ‘Blueprint’ that identifies how Purpose can be aligned with the company’s overall business strategy and positioning, plus how their values, beliefs and actions can have a meaningful, measurable and positive impact on the world in which they operate.
Frequently, this will find its first manifestation in a simple statement of intent, as with:
BMW: “To be the world’s leading provider of premium products and premium services for individual mobility”
Google: “To organise the world’s information and make it universally accessible and useful”
Unilever: “To make sustainable living, commonplace”.
However, the major caveat here is that, while it’s essential to have a clearly articulated statement in order to give focus, Purpose is much more than a marketing communications’ exercise. In fact, the FRC went so far as to explicitly make this point in their Review that “Too many companies substituted what appeared to be a slogan, or marketing line for their purpose...”
They then went on to advise that companies needed to consider Purpose “in relation to culture and strategy”, as well as “the views of all stakeholders”.
So once defined, it’s essential that Purpose translates into actions, while always remembering that engagement isn’t synonymous with behaviours (despite senior leaders tending to believe that they can rely simply on communications to effect change).
Making Purpose happen is as much about doing, as saying. (Arguably more.)
For many established businesses, activation and embedding are now their primary Purpose challenges: how to maintain momentum by influencing behaviours.
The first step is likely to be some form of evaluative exercise to assess where they are with Purpose: e.g. How well it’s resonating inside and outside the company. Strengths and weaknesses of actions to-date. Successes and failures. Omissions. Or what new opportunities have presented themselves. What the competition are doing.
From there a ‘Realisation Plan’ can be developed, identifying the next steps in their strategy: e.g. Refinements to the concept, or definition. What needs to happen in terms of embedding Purpose. How to bring it more to life via actions, behaviours and initiatives.
In an ideal world there are four steps, although most companies, in reality, won’t need to do everything listed, as they’re likely to already have some elements in-hand. Or they may wish to concentrate their efforts on certain ‘higher priority’ areas, while addressing others later:
Leadership
On the assumption that the CEO and his senior team are fully behind Purpose - and if not, they need to be - the next stage is to get them to ‘Walk the talk’, so that colleagues can see how important Purpose is and how committed they are
to its principles. This starts with building greater understanding about how they, them- selves, can deliver Purpose, as well as how they can support their own teams and direct-reports in doing so.
Embedding
While driving Purpose throughout the organisation has to be managed in a co-ordinated way across the business, it can’t be imposed from top-down; but more via a process that encourages people to take part. Often this can be helped by creating Purpose Champions to support implementation and engage with colleagues to get their buy-in; having them identify practical ways in which actions can translate into behaviours, in turn developing Purpose-driven initiatives in their daily lives.
Communications
Although Purpose has to be more than a strapline, it will need communications support. This is likely to involve expanding upon the original launch concept, possibly creating a refreshed theme and story, with supporting content, that’s designed to work across all media platforms as an integrated campaign. It may well be here that a company considers some form of modification to its branding, or visual identity to give the programme additional impact and reach.
Measure & monitor
Finally, to provide an on-going methodology not only to assess the efficacy of the programme at regular ‘check-gates’, but also identify fresh insights that can be fed into next stage planning. This is likely to be research-based, using both qualitative techniques designed to provide answers to the question ‘Why’ (e.g. perceptions & meaning; strengths & weaknesses), as well as quantitative data around the ‘What?’ (e.g. awareness, understanding & appreciation).
Four benefits (in addition to those identified in the earlier McKinsey quote): a precisely defined ‘Purpose’, with practical & actionable content, that’s fused with their business strategy, values & behaviours (and vice versa). Leadership commitment, yet with Purpose owned by all internal audiences. Plus a more focused, cohesive culture that is either a stronger version of their existing, or one that’s actively engaging change.
But perhaps most importantly, enhanced corporate performance and a competitive edge that ultimately delivers improved customer satisfaction. Once a clearly defined Purpose has been universally agreed, companies should benefit from a combination of: speedierdecison-making; greater clarity around individual accountability; increased rigour relating to performance expectations and standards; simpler organisational processes; closer cross-company collaboration; enhanced corporate appeal and appreciation.
In other words, the ultimate role of Purpose is to be business and profit accountable.
For many CEOs Purpose remains a challenging ‘soft’ concept, often defaulting to CSR