Many Canadian Companies Struggle to Communicate Purpose

An analysis of Canada’s top 30 companies shows that the quality of their corporate purpose statements is highly variable.

Four companies had excellent statements while one third of the sample were below average, meaning they may not be satisfying the demands of the growing number of investors who take ESG and purpose seriously.

When purpose is either actually or perceived to be lacking, it can adversely affect analysts’ views of future earnings with flow on effects to their cost of capital and shareholder returns.

Putting aside the actual scores, the bigger takeaways from this study include:

  • A lack of understanding what a purpose statement should be communicating
  • Difficulty in finding purpose statements on many company websites
  • Confusion between vision, purpose, mission statements and values; and
  • Instances of statements that came across as vague, flippant or marketing hyperbole.

Overall, there is evidence that many companies understand that purpose is important and needs to be well communicated, coupled with many that haven’t yet grasped the changing investor landscape.

HIGHLIGHTS

Companies that featured in the good to excellent range were spread across diverse industries.

For example, Royal Bank of Canada has the purpose of “helping clients thrive and communities prosper” through to Canadian Pacific Railway with “deliver transportation solutions that connect North America and the world”, Suncor Energy’s “provide trusted energy that enhances people’s lives, while caring for each other and the Earth” and Magna International’s “creating a better world of mobility, responsibly”.

Most fossil fuel and resource companies ranked in the lower half, with several focusing on financial performance and shareholder returns ahead of any true purpose ambitions.

Life insurance company and telecommunications company purpose statements showed a mix of high, medium and low quality. Across the sample, a handful of statements were either very vague in their scope or somewhat frivolous in their nature.

Loblaws shows evidence of ‘structure’ with an overall purpose of “Live Life Well” complemented by pillars of good and affordable food, accessibility to health and beauty products and saving for the future.

About 60 per cent of the companies explicitly state their purpose. For the others, it was deduced as per the notes below.

METHOD & NOTES

A purpose statement is only an indication of the quality of what they company says – it doesn’t not necessarily correlate with it being implemented or done well. In conducting this desktop analysis it is important to note:

  • A purpose statement should reflect the benefit to society that a company delivers in a profitable way.
  • When the purpose of the company is not explicitly stated, we analysed a range of other statements such as its overview, mission, vision or sustainability information.
  • The study is based on a proprietary 5-factor scoring system.

Readers should note this is a qualitative review based on an interpretation of website data and should not be relied upon for making investment or other decisions.

WANT TO KNOW MORE?

If you’d like a more in depth briefing or assistance then please reach out via phil@businesspurposeproject.com

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Phil Preston is a purpose speaker, strategist and founder of The Business Purpose Project. He is the author of Connecting Profit with Purpose and co-host of Corporate Conversations on Purpose. You can contact him via phil@businesspurposeproject.com

Image courtesy of Ali Tawfiq and unsplash.com

Should Recruiters Be Worried if Their People Lack a Bigger Purpose?

Purpose has evolved beyond the forms of social good that we are familiar with such as giving, volunteering and responsible business practices, to something that is much more strategic and core to success. As Simon Mulcahy of Salesforce notes:

“Societal issues are becoming business issues”

This shift has huge implications for employees because younger generations seek a new type of purpose ‘experience’. It also gels with the evidence provided in Tribal Leadership that employees in high performing cultures feel bonded by collectively taking on a noble cause – something bigger than the company itself – which equates to having clarity of purpose.

Recruitment firms have a natural tailwind in this regard because employment is viewed as being good for society, however they will struggle if they fail to evolve and take the extra steps needed to clarify their purpose and make it real to their people’s everyday work.

With talk of ‘the great resignation’ due to greater flexibility and working professionals reviewing their priorities and purpose in life – a deeper dive into this issue could hardly come at a better time for recruiters from both a staffing and client perspective.

Recruitment industry authority, Ross Clennett, invited me to collaboratively review the sector’s approach to purpose and present the findings to recruitment business owners.


WHAT’S CHANGED?

Younger employees expect so much more from their employer than previous generations, with Gen Zs wanting purpose to be core to their work, and 61 per cent saying their biggest fear is being stuck in a job that isn’t fulfilling. 

This shift in employee needs can be characterised in three distinct ways:

  1. Work is more than a role or career pathway, young people want to work for an employer who is a partner in their life’s goals.
  2. Not only do they want to work in a dynamic team environment, their day to day work must be connected to a higher cause.
  3. Culture and leadership is important, and they want to be inspired by the overall purpose of their organisation.

 

 

HOW HARD IS IT?

A recent executive survey by Brandpie found that 60 per cent of CEOs who have or want a company purpose admit they are uncertain about how to enact it – research that is consistent with Porter Novelli’s findings that 87 per cent say they need help navigating purpose and the societal issues of the day.

On the flip side, leading companies are already realising the benefits of purpose. Food and beverage company, Lion Co, has a purpose of “bringing people together to be sociable and live well” which may help explain why it took on the full strength beer market with a mid-strength beer and won. They also screen job candidates for their purpose ‘mindset’ in the recruitment process. Why? Because this is a non-negotiable feature for their company culture.

 

RECRUITMENT INSIGHTS

We covered a lot of ground in our sessions, so I’ll summarise three of our key insights:

1. PURPOSE QUALITY VARIES

In analysing the purpose statements of seven large recruitment companies, their quality was variable. The main reason being that some statements spoke more to their financial or market differentiation ambitions than to the benefit to society their business aims to create.

 

2. COMPETITIVE ADVANTAGE

We looked at five examples of using a purpose lens to create financial or market advantage, including a major recruitment firm that supports youths who struggle to gain access to regular employment opportunities.

Not only is their program highly engaging for staff, they benefit commercially from the closer relationships they build with their own customers (large corporations), connecting them with a new market segment and convenient solution to some of their corporate social responsibility obligations.  

3. VALUES ≄ PURPOSE

We looked at best practice in how companies structure their ‘purpose’ and why values are not the same as purpose. Values are the highly prized features of your culture and organisational DNA that you see as being essential to your future success, which is quite different to the ‘social objective’ conveyed by your business purpose.

One of our session attendees mentioned they were in the process of articulating their purpose and there was confusion with values, so in the discussion we were able to work through this together.


START WITH GENUINE INTENT

If there’s one important lesson that comes from companies that have successfully articulated and implemented their purpose, it is that you have to be genuine and prepared to just get started!

Delivering purpose profitably – as distinct from making a profit and giving some back – requires greater proficiency in social, economic and environmental outcomes. It may require working with new partners in new ways and you’ll have some reality checks along the way.

Ross pointed to the leadership of Talent International’s Richard Earl, who talks with humility about creating their foundation arm, Talent RISE, saying that it took a few goes to get their initiatives working in the way they’d intended.


HOW DO YOU RATE?

A purpose statement is essential, however it counts for little if your people don’t understand what it means, believe in it or know how it could or should impact their every day work. You can ask your people the following questions to gauge how well you are doing:

  • Is our business purpose well articulated?
  • Do we understand why it is what it is?
  • Does everyone take it seriously?
  • Do we ferociously protect it?
  • Do we embrace our team’s contribution to it?
  • Do we understand how it drives business performance?
  • Do we use it to guide the decisions we make?
  • Are we encouraged to call out instances where our actions compromise our purpose?
  • Is there congruence between what we say and what we actually do?
  • Are we attracting and retaining the best talent in the market through our purpose?
  • Is everyone inspired by our purpose?

Purpose requires patience and persistence, however it will pay off because it is the ‘ticket to play’ for every business in the ‘purpose economy’ that we suddenly find ourselves in. 

Recruitment firms are no different, hence their owners and leaders would do well to connect their people to a purpose bigger than simply filling their clients’ jobs with the best candidates.

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Phil Preston is a purpose speaker, strategist and founder of The Business Purpose Project. He is the author of Connecting Profit with Purpose and co-host of Corporate Conversations on Purpose. You can contact him via phil@businesspurposeproject.com

7 Story Types that Make Purpose Inspiring & Real For Your People

An executive of a large company recently confided to me that they were having trouble making their purpose ‘real’ for their people. In other words, the return on their comprehensive purpose transformation process is nowhere near its potential. This is a common problem, so how do companies gain greater traction with their purpose?

Apart from crafting a great purpose statement, the implementation plan needs a well rounded internal communications strategy, and drawing on these 7 story types will help:

1. THE ORIGIN STORY

This is the story that people need to hear over and over again so they know it off by heart. It’s the simple explanation of why your organisation has the purpose that it has.

If you drew heavily upon the founder’s journey then so be it – that’s a key part of the story; but if you didn’t, explain why your purpose statement is what it is. It could be, for example, related to your alignment with the sustainable development goals, key attributes of your company, a project that gave you unexpected insights, a rapid shift in customer needs or a moment of truth in adversity.

2. THE EXPERIENTIAL STORY

Imagine if every employee could relate a personal and positive story that came from living your corporate purpose? These stories have currency because they come from the heart. Don’t be shy in tracking them down and encouraging everyone to find and tell their own. The caveat here is that they must be genuine!

3. THE INTEGRATION STORY

People aren’t inspired by a purpose statement on its own – just ask some of Facebook’s current and former employees. Stories of how purpose is integrated into everyday policies, processes and practices reinforces a purpose-driven culture. For example, I know of a property company CEO who had certain social outcomes hard-coded into his KPIs by the board.

4. THE HUMILITY STORY

The social, economic and environmental factors you deal with in delivering your purpose can be very complex or messy, and implementation may not always run as smoothly as you would like. Communicating what happened, the learning from it and how it informed your response going forward demonstrates humility, and conditions your people for the realities of purpose-driven change.

5. THE INNOVATION STORY

Purpose is a goldmine for innovation and competitive advantage. Reframing its purpose as “a better world for pets” saw Mars Petcare innovate and expand beyond products into service offerings.

Medical products company, Becton Dickinson, observed needle stick injuries for health workers rising and invested billions in developing, scaling up and distributing needle-less injection systems. Today, this line of business accounts for about a quarter of its revenues. These types of innovation stories bring profit, performance and purpose together in an inspiring way!

6. THE STRATEGY STORY

Purpose can prevent you from making poor investment decisions too. The CEO of Grosvenor Estate noted that clarity of purpose led them to some specific investments they may not otherwise have made and, more importantly, played a role in wisely avoiding others.

Unpacking strategic decisions that have been guided by your purpose are informative, especially for your leadership group.

7. THE COLLABORATION STORY

The collaboration story details how your people and teams came together internally or with external partners to help deliver an aspect of your corporate purpose. It’s likely that you’ll need to work with new types of partners in new ways – which isn’t easy – and requires a deft hand.

Again, your people need to know these things.

MAKING IT REAL

Implementing corporate purpose has many dimensions and a range of story types help to educate, inform and role model the behaviours you seek. Purpose is an ongoing journey rather than a one or three year project, so it’s worth getting into the rhythm of these more nuanced forms of communication and storytelling. Inspiring and empowering people with your purpose is one of the greatest opportunities you’ll ever have and making it real with the right types of stories will bring it to life.

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Phil Preston is a purpose speaker, strategist and founder of The Business Purpose Project. He is also the author of Connecting Profit with Purpose and co-host of Corporate Conversations on Purpose.

Email: ceo@businesspurposeproject.com

Banner image courtesy of unsplash.com

Do Companies Know How Gen Z Thinks About Purpose?

Gen Zs and Millennials are similar in terms of their entrepreneurial spirit, however they approach purpose differently, which has flow on effects for companies seeking to attract and retain the best young talent. And their approach is very different again to the Gen Xs and Baby Boomers that have gone before them.

This is the key insight Lynne Filderman and I gained from interviewing Ben Smithee in our upcoming episode of Corporate Conversations on Purpose. Ben’s company, The Smithee Group, is all about generational success and integrity, and helping businesses create something bigger than themselves. It’s what Ben and his team live by too.

We are seeing a big shift in mindset with respect to purpose. Older generations tend to have a mindset of making money and then giving some back compared to Gen Zs who want purpose to be central to their being – core to their job roles, their career and their lives.

Ben believes in and is committed to generational success, and his firm can play a role in helping his staff pursue their personal purpose through their work with him.

He notes that, although Millennials are focused on delivering social benefits through their work, Gen Zs are taking this to a higher level again. Yes, they want to be comfortable, but they want positive social impacts to flow from their core work. We can think of this as a quest for personal, professional and organisational coherence.

Ben’s agency works with these generational dynamics every day so he knows what he’s talking about. The question we wanted to explore further was: what does this subtle shift mean for the companies seeking to employ and retain them?

He sees this forcing a wave of alignment in large companies, where purpose is the North Star that underpins every product, policy, process and platform that the company creates. And this starts with brand, in Ben’s words:

“Brand is the only thing that separates you from the sea of sameness.”

He says that we live in a world where everyone can do everything, therefore you need the right people in place who are equipped to execute your business purpose on a daily basis.

We went into so many interesting aspects of purpose with Ben! You’ll find it all in our upcoming episode entitled Purpose & Generational Success: Where does purpose fit into the equation? Please drop me an email or message if you’d like notification of its release.

I also loved Ben’s comment after we concluded the formal part of our interview:

“This is the stuff that matters – it has 10 times more value than hearing me talk about how to run a digital ad campaign!”

We would agree! On behalf of Lynne and I, we thank Ben for coming on our show and thanks to our technology and media partners in Ampslide and 3BL Media for supporting us on our journey.

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Phil Preston is CEO of The Business Purpose Project, helping executives and leaders navigate the shift to the purpose economy. He is a purpose strategist, conference speaker and author of Connecting Profit with Purpose. You can contact him via phil@businesspurposeproject.com

5 Things You Need to Know To Create a Great Purpose Statement

Employees, customers and investors increasingly want to know your business purpose and be inspired by it – but how do you ensure your purpose statement is great?

Well, it’s a mix of art and science. Based on my analysis of hundreds of company purpose statements I’ve found there’s 5 things you really need to know before reviewing or creating yours.

1. Purpose and vision

Why no mention of the mission statement? I find they vary so much in their intent and form from company to company that, to be honest, we can live without them. Purpose and vision will suffice.

Your business purpose explains why you exist, the underlying reason for doing what you do. A vision statement on the other hand is the world you’d like to help create through your purpose. Some companies combine the two – which is okay.

The Australian telco, Telstra, is “building a connected future so everyone can thrive“. Building a connected future is the purpose, and everyone thriving is the vision.

Make sense?

2. Purpose is a societal benefit, not an activity

Purpose describes your benefit to society. Companies have historically talked in terms of financial goals (“we seek to maximise shareholder returns”) or activities (“we make cars”) instead of conveying a meaningful purpose (“we create sustainable transport solutions”).

Without purpose, the pursuit of profits is more prone to be at the expense of people and the planet. That type of business model has a very short use-by date.

3. Purpose is your North Star

Take purpose seriously because it is the North Star for your people and it’s what your customers expect. It drives productivity, performance and innovation.

If people see inconsistencies between your stated purpose and what you actually do or how you behave, then don’t expect to be an employer of choice. The best young talent will be excited by companies with genuine, lived purpose. Ignore them at your peril.

4. A purpose statement alone is not success

Facebook is a controversial company, drawing the wrath of regulators, users and even its own employees for the way it goes about its business.

And yet it has a great purpose statement: “Give people the power to build community and bring the world closer together“.

The lesson here is, great statement ≠ success! You’ll need to integrate your purpose into everything you do and ensure your people understand how they are contributing to it.

5. Purpose is not a positioning statement

Because it conveys a benefit to society, it’s fine for your company to have a purpose statement similar to another – you are competing in the efficient and effective delivery of it.

Another reason for avoiding mission statements is, at their worst, they get hijacked by the marketing department and become a mash up of purpose, positioning and vision in one go.

Sigh.

Primed for purpose

Your executives, directors and leaders need to be on the same page and understand the benefits of purpose. Getting their buy-in is critical before assessing where you are at, reviewing your statement and then integrating it into your business.

Reach out if you want to know more or set up a debriefing on the topic.

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Phil Preston is the founder of The Business Purpose Project and author of Connecting Profit With Purpose. You can make contact via phil@businesspurposeproject.com