If there is anything the pandemic has taught us, it is that we are living in a VUCA (volatile, uncertain, complex, ambiguous) world. To help us navigate our way through it, companies are increasingly relying on purpose.
There are many ways you can define corporate social purpose or CSP—the reason for a company’s existence, the ‘why’ of it or that core intent that makes it not just successful, but impactful. And all these ways lead to a single conclusion—having a purpose gives a company a way to make an enduring, positive difference to the world.
In the last few years, even before the pandemic shifted the focus from ‘say’ to ‘do’, businesses and brands have been increasingly talking about purpose. There are many reasons for it—not the least of which is the increasing emphasis on solving some of the biggest problems that the world is facing—climate change, socio-economic inequalities, geo-political realignments, among others. What the pandemic did was to precipitate the conversation. Governments and civil society are increasingly looking at businesses to step up and work with them on solving these problems. One of the ways they have done that is through corporate social responsibility (CSR) initiatives.
Connects all stakeholders
CSR is largely focused on supporting the community that a company functions in. Corporate social purpose (CSP), however, goes beyond that to cover all stakeholders of a company, including, but not limited to the community. It becomes about linking everyone, from employees to consumers, government to community, media, and partners, with a unified goal towards which they can align their contribution. Instead of pulling in different directions, they work together to realise that goal.
Enhances corporate reputation and brand equity
A business that has a purpose comes across as more authentic, which, in turn, increases the trust the various stakeholders bestow on it. That then has a positive rub-off on its reputation, both at the corporate and brand level. If you look at businesses that gained respect during the pandemic, you will see that it wasn’t just charitable activities that earned them respect. It was those that had a more thought-through, purpose-driven idea that led to not just enhanced reputation but awards, recognition, and overall pride for the organisation. Take the example of P&G Gillette supporting the barber community or Sleepwell talking about the importance of sleep and donating beds for the COVID centre in New Delhi. These initiatives were not just about giving money but were aligned with the company’s objective.
Motivates and mobilises employees
One of the biggest impacts of purpose is in aligning employees towards a clear goal. There are several studies that aver that purpose drives employees to feel as well as perform better. They also tend to stay on for longer—a much-needed parameter in the face of the Great Resignation. WeSpire’s The 2021 State of Employee Engagement points to the fact that while 57% of all employees are actively looking for new opportunities, only 7% of all employees who believe in their organisation’s purpose are looking for opportunities.
The Deloitte 2021 Global Human Capital Trends report says that over the past two years, 44% of millennials and 49% of Gen Zs said they have made choices over the type of work they are prepared to do and the organisations for which they are willing to work based on their personal ethics. What’s more, driven by purpose, employees also become the company’s ambassadors,
There are a few things to remember, though. One, that communicating purpose is not enough, it needs to be put into action. It’s a commitment that, if not fulfilled, could lead to further disenchantment. Secondly, to really entrench purpose in the rank and file, it needs to be part of every instance employee engagement, not just encased in a vision, and left there.
Propels growth through stakeholder support
With consumers more likely to buy from brands whose purpose aligns with their own, employees more likely to be motivated, shareholders more likely to invest, government more likely to support, and all these stakeholders more likely to recommend the company, it’s obvious that a company leading with purpose will witness more growth.
There is one more thing to remember—it is not enough to just have a purpose. It is critical that the purpose becomes a living, breathing, evolving entity that is embedded in the company. And to make that happen, it is important to regularly assess whether the company is living up to its commitments. Because if it isn’t, the disappointment could lead to loss of trust that could negate everything else that the company achieves. So, it is important to do two things—stay honest and set the right expectations on the one hand, and measure and demonstrate living up to it on the other.
John F Kennedy said, “Efforts and courage are not enough without purpose and direction.” And when you align efforts and courage with purpose, it makes for authentic and enduring relationships and long-term positive impact.
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