The push for corporate purpose is coming from all sides – this is a key insight from our Corporate Conversations on Purpose episode featuring Sarah Downie.
Sarah is CEO of the Shared Value Project, a member-based organisation advancing the concept of companies addressing societal issues that intersect with their business challenges in order to achieve durable success.
What does the ‘push’ look like? What risks and opportunities does it present? How could or should leaders respond? We cover these questions and more in our interview.
In the past, a relatively small group of hyper-conscious consumers have been the drivers of ethics and purpose in business, however the push is now very broad-based.
“It’s coming from many different directions to be honest and it’s great to see”
In particular, it’s coming from customers, shareholders and employees just to name a few. The fight for talent is real and younger generations have greater expectations of the organisations they work for, and they are more willing to sacrifice dollars for purposeful work compared to older generations. They see themselves as agents of change.
To ignore this trend and sit on the sidelines is an enormous risk as we – as a society – have hit an inflection point, where delivering on the expectations of stakeholder groups is core to profitability and success.
To take advantage of the opportunities this presents, companies need to know and live their purpose – they need to have more than a superficial statement. Sarah notes there is still a tendency to silo the various activities within companies such as marketing, people and culture, sustainability and so on, whereas purpose requires a highly integrated and collaborative approach.
“There’s great opportunity to be unlocked by thinking differently about the role of business in society”
While different parts of the organisation may be out of sync with each other, purpose can be a uniting and culturally valuable means for bringing everyone together.
In the pandemic, research by CECP & Fortuna Advisors found that purpose-driven businesses fared better in terms of earnings and valuations. Sarah is not surprised, noting that such firms are more likely to have done the hard work of forging relationships with social sector partners, thus galvanising their ability to work with non-traditional partners and respond to adversity.
Leadership is key
Leadership is critical in company-wide initiatives. Sarah makes an interesting point about there seldom being a “really neat business case” for purpose-led change, and it requires a certain level of commitment to get going.
I’m reminded of IAG Chair, Elizabeth Bryan’s, words of advice, that it “requires authenticity, passion and commitment to instil a renewed purpose across an organisation, and don’t bother trying if you’re not prepared to give it 100 per cent.”
Leaders should also be aware that young people may need cover and scope to try new things without getting unduly bogged down in organisational processes.
Sarah’s key advice
For a CEO starting out or part way into this journey, Sarah says it’s okay to be a bit nervous – just keep going. She believes organisations that are genuine in their intent have little to fear, and they would be wise to learn and share experiences with other organisations.
Climate change is front of mind for many companies right now due to the inordinate size of the risks it presents, however the breadth and complexity of social issues will always be at our heels and companies will have to continually improve their cross-sector skills and evolve their approach.
It was a pleasure to have Sarah on as our guest and you can find this episode and more on the Corporate Conversations on Purpose page.
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Phil Preston is the founder of The Business Purpose Project, author of Connecting Profit With Purpose and co-host of Corporate Conversations on Purpose with Lynne Filderman. You can make contact via firstname.lastname@example.org
PS. The Business Purpose Project is a consulting member of The Shared Value Project.