Is purpose really doing its job right now?

By Dave Hanney

We’re currently experiencing what a VUCA (Volatile, Uncertain, Complex, Ambiguous) world can be like, in an unprecedented way. It comes at a time when so many businesses have been uncovering, articulating and publishing their purpose.

We were chatting with the team at Blueprint for Better Business recently, the well-connected charity that serves as a critical friend to business, helping many of the FTSE’s largest companies on their purpose journey.

We both agreed that conversations in the business community have largely moved on from ‘why should we have a purpose?’ to ‘now we’ve got one, how do we live it?’.

Purpose is a north star, something that sets the direction of decision making in business. Since the outbreak of Covid-19 and the subsequent turmoil its unleashing, we are faced with the abrupt realisation that what was once certain no longer is, and we’re in dire need of direction and clarity.

It’s a time when, like the 2008 financial crash, many people will be looking for proof of purpose to understand whether companies are standing by their statements, or putting them to one side while fighting to survive. A poll released last week indicated 65% of consumers would base future purchasing decisions on brands’ reaction to the crisis.

Acts of leadership and inspiring actions from (some) businesses

We’re already seeing some great examples that will be put under the banner of purpose. LVMH and Brew Dog making hand sanitiser and giving it to hospitals, Alibaba’s learning platform for sharing ideas to tackle the pandemic, H&M and Zara making scrubs for hospital staff. Conversely, some businesses with inspiring purpose statements and proud declarations of their cultural values, are doing the opposite: reacting with widescale job cuts, placing front line delivery staff at risk without providing suitable protective equipment, exerting pressure on employees who have children to keep their usual working hours in spite of the extra demands of 24/7 childcare.

The positive examples are illustrations of companies playing their part in society, pivoting their resources to offer rapid help, of businesses doing the right thing.

They’re needed, welcomed, and of course, should be regarded as positive actions. But they’re just that. An action. A short-term, reactionary move in response to a (hugely significant and serious) change. Many of these responses will represent a change in mindset of the business. But if we look at the market, we can’t expect these examples to be a robust measure of how many companies are really putting their purpose to work.

Moving from purposeful actions to a purposeful business

The acid test will be whether businesses continue to play a positive role in society when Covid-19 is under control. This is a ‘how’ question, and one that will determine the level of buy-in and commitment of a business to become more responsible, and to undertake the hard work of figuring out how it wants to act in the service of its internal and external stakeholders, and to the wider world.

To enable your business to live its purpose you have to invest the time and energy in creating the right conditions. You can’t just demand that it does. Put simply, a business is a collection of individuals working together to make the best decisions they can. If you haven’t invested in changing the way those decisions are made, then you won’t change them in the long run. This requires answering the following questions:

  • Has there been enough time and discussion about the type of outcomes your purpose drives so everyone truly gets it and aren’t just nodding along?
  • Have the incentives been changed to align to the kind of outcomes your purpose drives?
  • Have you changed the social structures, norms, and habits to align to your purpose?
  • Critically, have you changed the kind of data that flows to decision makers when they are making their decisions?

Last week, UN Secretary-General António Guterres said, ‘Everything we do during and after this crisis must be with a strong focus on building more equal, inclusive and sustainable economies and societies that are more resilient in the face of pandemics, climate change, and the many other global challenges we face.’

As Covid-19 shakes up the global economic, social and political systems, will businesses use it to shake up their own systems to embed a new normal that is far more purposeful?