Purpose is now considered a core business strategy practiced by B2C and B2B sectors around the world. How it empowers and powers organizations to embrace extraordinary new stakeholder responsibilities is profound when developed, embedded and activated authentically.
Authentic purpose equals thoughtful, real, and sustained actions that impact the business internally and externally, while having a positive impact on society. And the organizations with the most authentic purpose have it baked into their cultures, mandated and modeled by CEOs who understand their leadership role.
Why is this more important than ever?
COVID-19 accelerated the adoption and integration of purpose, according to a recent Accenture report. “Winners will combine the sprint on their COVID-19 responses with the marathon of longer term societal and economic impact. Losers will be, at best, forced to rebuild their brands, values and reputation from the ground up. Or at worse, they will simply disappear.”
Accenture says companies that define purpose thoughtfully become a “living business—one that can sustain growth through hyper-relevance” while addressing customer needs.
The stakes are high—really high. Do purpose right and organizations can become magnets for talent and shift to the fast track for growth. Purpose that is lived authentically in an organization ignites employee potential; helps companies push beyond boundaries; inspires new products, services, and lines of business; sparks innovative collaborations; and deepens supply chain, customer, and consumer relationships.
Unilever, through its decade-plus commitment to the Unilever Sustainable Living Plan (USLP),
is the most desired employer in consumer products in 50 countries. Because the USLP is authentic, strategic, and deeply integrated throughout the business, Unilever’s 28 Sustainable Living Brands grew 69% faster than those without purpose at their core and delivered 75% of the company’s overall turnover in 2019.
Recent research backs this up: 65% of consumers want businesses to take a stand on issues important to them, and that rate rises to 74% among 18-39 year-olds. Forty-seven percent of consumers expect brands to translate values and promises into new and innovative products and services. In terms of social issues, when companies don’t act with speed and sincerity, 43% of consumers will leave that brand.
What drives an authentic social purpose?
“What people think-say-do should be aligned,” Paul Polman, former CEO of Unilever, said in a Greenbiz webcast. Purpose-driven companies and leaders, Polman said, should “create value through values. Set targets that are hard to reach. Move from a circular economy to a regenerative economy. Lead as a CEO to fight for what is right. Put self into the service of others.”
“CEOs today have a knowledge gap and a courage gap. They don’t know all. They need to ask for help. Be human and show vulnerability.” Do that, Polman says, and people will want to work for you.
Unilever recently celebrated the 10th anniversary of the USLP, sharing insights into its purpose journey, noting both victories and misses for its brands—again demonstrating the organization’s humility and humanity—while underscoring that purpose is a journey, not a destination.
The power of authentic purpose comes from integrating it into an organization such that it generates shared value for all stakeholders. Where an organization is on this journey will have an even greater impact in 2021. Here are my suggestions for organizations to define and integrate a truly authentic, activated purpose.
1. Set up purpose to serve as a navigation system for culture
Culture influences everything: employee value proposition, risk and compliance, retention (especially for Millennials, who care deeply about purpose in their work), employee productivity, customer and supply chain relations, brand differentiation, organic growth, and more.
Yet, Gallup found that only 41% of employees strongly agree that they know what their company stands for and what makes it different from competitors.
Culture begins with an organization's purpose, but it's expressed by leaders' behavior. That's why purpose is increasingly used as a “north star” for making tough decisions: an organization's real values come to light under pressure. How leaders behave challenging times—COVID-19 being perhaps the greatest event of the last century[KK1] —demonstrates whether the organization’s purpose is real. It also indicates what must change to create the culture that’s desired.
Because intangible assets such as culture average 52% of an organization's market value (and in some sectors as much as 90%), it’s important that purpose is led by CEOs, says Cyrus Taraporevala, President and CEO of State Street Global Advisors. This includes making clear, purpose-driven actions as well as communicating internally and externally about the role and importance of purpose.
By connecting people with a sense of higher purpose, leaders can inspire them to bring more energy and creativity to their jobs. They take more risks, learn more, and raise their game.
Here’s how some leaders express and shape their purpose cultures:
AB InBev: To provide clarity for its 175,000 employees across 500 brands in 100 countries, AB InBev has a clearly-stated Manifesto:
We are a company of owners. We believe that you get out what you put in. We strive to be the best pursuing our dream, committed to improving lives for more people in more communities. For centuries, we've been bringing people together through sports, through music, and through culture, creating moments, both every day and extraordinary moments, seizing every occasion to serve up more of what people thirst for.
For this reason, we pour ourselves into our work from farm, to brewery, to market, taking pride and ownership in every step, crafting great beer from the best natural ingredients, paving the road for a better tomorrow that we're proud to be part of and celebrating the great times that bring us together. We are AB InBev, bringing people together for a better world.
AB InBev’s purpose, “Bringing people together for a better world,” links to a roadmap of 10 principles that mold the company’s culture. “It really defines not only who we are and how we act and unifies the company’s 500 brands and drives all of our people,” said Pablo Jimenez, former CCO of AB InBev.
Mars Inc.’s purpose, “The world we want tomorrow begins with how we do business today,” is a simple but profound statement that opens the lens of possibility for Mars’ new businesses and products. It also guided the company’s rapid response to COVID-19. Mars’ purpose is guided by the Five Principles of Mars (Quality, Responsibility, Mutuality, Efficiency, and Freedom), the organization’s roadmap for decision-making and guide to beliefs and actions for their 125,000 associates. The Five Principles were powerful for Mars during COVID, as the company had to make significant financial decisions. To which, leadership asked: “How does this contribute to the world we want tomorrow?” Mars embeds its purpose within the organization through frequent communications, dynamic discussions, applying purpose as a lens for decision-making, and incorporating purpose KPIs into performance reviews for senior management and the company’s top 300 leaders.
Procter & Gamble seeks clarity about who the “hero” is to develop its purpose-led brands. “It is not the brand or the company. For P&G, it’s the consumer whose lives we can make better,” said CCO Damon Jones. This approach allows P&G to think about its value proposition in a very different way.
2. CEOs must have courage and embrace servant leadership
CEOs bring their commitments to life via servant leadership: constantly living their organization’s purpose.
Starbucks is an extraordinary best-practice case study of how to embed purpose into culture. “How can I ask my partners [employees] to support Starbucks, if I don’t support them?” said Howard Schultz, former CEO of Starbucks. Benefits for partners range from “bean stock” to comprehensive health coverage and a free online college education. In response to the pandemic, Starbucks supplemented this with 20 hours of mental health coverage.
“Authentic leaders also know their blind spots. They know when to find others to help,” said Jones.
Purpose-driven companies recognize they cannot be divorced from their community and the responsibility to be part of society. “When you are part of the community, you're expected to be part of the solution,” said Jimenez. “So that's why, by being part of communities, and by realizing that our mission is to bring people together, we came up with different ways and forms to land this, whether by sustainability efforts, by our smart drinking goals, by our efforts concerning road safety.”
3. Understand the process to develop purpose takes time and must be across levels
When Paul Polman started the process to reinvent Unilever, he led 400 senior leaders through comprehensive training to identify their personal purpose. Only in doing this could Polman set the groundwork for his visionary transformation of the company. As the company neared the 10th anniversary of the Unilever Sustainable Living Plan, thousands of employees went through a similar discovery process to find their personal purpose—designed to engage them in the next 10 years of the USLP.
Mars, a family-owned company, spent two years with senior leaders to develop a purpose based on the organization’s decades-old Five Principles.
AB InBev took months of analysis to develop its purpose, including employees from regions where the company operates and colleagues from different levels and departments. Feedback and insights were gathered via focus groups, surveys, and the thoughtful reflection of conversations with senior management.
4. Take the long view and set stretch goals
Companies with an authentic purpose take the long view. AB InBev states this clearly in its purpose: “Bringing people together for a better world, for the next 100 years.”
Mars views its purpose in terms of generations, not quarters. “Following our collectively-developed purpose ensures we stay family-owned for the long term,” said Andy Pharoah, VP Corporate Affairs and Sustainability of Mars, Inc.
In the early years of his Unilever leadership, Polman took the courageous move to stop providing quarterly guidance to the financial markets. He said pointedly without giving that expected guidance, “If you don’t want to invest in my stock, then don’t.”
To shape and deliver on an authentic purpose, set stretch goals that seem almost impossible to achieve. "It takes the same amount of effort to dream small or to dream big, but we want to dream big, of course,” said Carlos Brito, AB InBev’s CEO.
Unilever wanted to be ambitious as it structured its purpose, “Making Sustainable Living Commonplace,” and the USLP. “If we set up really ambitious objectives it would stretch people to think and act in a completely different way. Not incrementally,” said Karen Hamilton, Unilever’s Global VP Sustainability, Divisions. “The goals were ambitious to drive transformational change at scale: improving the health and wellbeing of 1 billion lives; halving their environmental footprint; or enhancing the livelihoods of 100 million people. They required us to go well outside our comfort zone,” said Hamilton.
Tata Consultancy Services (TCS) has a purpose “to make it a joy for all stakeholders to work with us.” To ensure purpose is authentic, “you have to bring the same vigor and the same capabilities that you apply to your business, problems, and how you support your customers to solve societal problems,” said Balaji Ganapathy, TCS’s Chief Social Responsibility Officer. To activate purpose throughout the organization, TCS applies the 4Cs: Intellectual, Technology, Human and Financial Capital.
“I think bringing the power of our technology, driving it by embedding it into the company’s purpose, and leveraging the skills and expertise of employees as well as leaders in the larger community is where the opportunity lies for us to make significant change in society,” said Ganapathy. “Purpose is the new technology, symbolizing that today and even more so tomorrow, when integrated into the core of the business, purpose can create significant shared value for all stakeholders, thus forming a new type of capitalism.”
5. Engage employees as your growth engine
Cultures with a well-defined purpose attract and keep top talent as well as engage workers more deeply. Engaged workers perform better, and so do their companies.
AB InBev employees know their role because the organization’s manifesto is actively lived by the CEO down to employees at each brewery around the world. The global brewing giant’s employees are treated as if they are owners, and thus take the company’s results personally. Employees care and act because their culture and purpose makes them feel this is their company. As owners, they identify gaps and areas that need improvement, and then develop solutions. This purpose-driven culture creates an environment where people are never completely satisfied with their results, so they are in a never-ending process of continuous improvement.
“Having this clear culture, clear purpose, the simple principles, and then living them and breathing them, has helped our company exponentially grow, as well as bond your people together into just loving the company overall and their individual brands,“ said Jimenez.
At TCS, purpose is built into each employee’s career plan, helping them discover and live their personal purpose by connecting it with the company's values. During their three-month orientation period, TCS employees are paired with a nonprofit as their first client. Employees are also paired with seasoned mentors and an agile learning model to produce an early “win” for the relationship.
“This approach creates an understanding that, not only can they earn money by doing this job, they can fulfill something that is more innate and inherent,” said Ganapathy. “And this has been a wild success for us in terms of retention making us one of the leading companies in the industry in terms of retention with annualized global rates of 87-88%.”
Ganapathy talks about a sophisticated approach to move employees from participants to custodians. TCS has carefully architected a journey for their employees to move from volunteers to mentors to societal champions, which encourages deep ownership of partner relationships and outcomes. That approach garners an astonishing 97% approval of the company’s community engagement and realizes 85% participation of business leaders in community engagement across 100 business units. Employees can take diverse actions: joining a nonprofit board, spearheading a pro-bono project, leading a month of community service, or helping to create online platforms providing technology solutions for community partners.
“You need to enable your workforce to fulfill their broader purpose that goes far beyond volunteering,” said Ganapathy. “It is about driving a culture. So if you're doing the first step right, which is embedding purpose, you will have more meaningful opportunities to share and connect that to what people are doing on a daily basis in their job, and extending that to the work that they can do to support for the community.”
6. Commit to real action, both internal and external
What is the role of an authentic company today in social issues? COVID-19 and the movement for racial equity pulled back the curtain on companies and brands who said they were purpose driven. While millions of dollars were donated to deserving nonprofits, actions spoke even louder. Companies with an authentic purpose acted swiftly and decisively.
Procter & Gamble’s path to purpose for each brand involves discussing the strategy for the business, then uncovering a core consumer insight to deepen that brand’s authentic connection to people that leads to their societal involvement. “Know where you have the right to play,” said Jones. Insights are uncovered from traditional consumer research, social listening, as well as engagement with stakeholders ranging from supply chain partners to NGOs. P&G also consults with potential “adversaries” to illuminate weaknesses and opportunities.
P&G’s COVID-19 response was rapid. More than 30 brands immediately took actions, without corporate guidance, in countries around the world. Responses included modifying factories to manufacture PPE or hand sanitizer. The company’s local impact was accelerated thanks to years-long relationships with more than 200 community organizations. “We also had our set of principles that had been developed from our values,” said Jones. “This enabled our people at the front lines to act. The principles helped them with clarity of decision-making authority so people could act swiftly.”
As one of the world’s largest advertisers, P&G recognizes its power to impact society through messaging that incorporates consumer insights. This includes supporting confidence and gender equity in women via the Always and Secret brands, or taking a stand on equality and systemic racism. In 2017, the company began addressing racism in its advertising with short films ”The Talk” and “The Look.” These emotional and provocative videos were designed to strike a cultural nerve and drive disruptive action. And this was just a portion of P&G’s activation strategy.
Beyond using its advertising clout, P&G looked to its network of suppliers, partners, and agencies to activate the company’s “force for good, force for growth” mantra in new ways and advance gender and race equity issues. P&G created new policies around diversity in its advertising—from talent to the teams behind creative work. A fascinating and unexpected result: P&G found that some of its best performing ads were directed by women. “At the end of the day we want a more equal world, equal voices, equal opportunity, equal representation,” said Jones.
Clarity of outcome is also critical: “Getting people to engage is the goal of ‘The Talk,’ ‘The Look,’ ‘The Choice,’” said Jones. “Yet, they don’t have to agree.”
A commitment to what I call ‘’story living” versus storytelling means an authentic purpose has to become a fundamental part of a company or brand’s DNA. “P&G had done this work for so long addressing race and gender that it gives them the right to talk about it not because we’re perfect, but because we’re making progress,” said Jones.
AB InBev lives its purpose through bold sustainability commitments. As beer is brewed with natural ingredients, AB InBev depends on a healthy environment. The iconic Budweiser brand has committed to 100% renewable energy throughout its manufacturing process, and boldly printed that goal on its cans. This is a really big deal: 41 million Buds are consumed daily around the globe. “When you're part of the community, you're expected to be part of the solution,” said Jimenez.
7. Use purpose to ignite innovation
AB InBev’s goals were too ambitious for the organization to achieve alone, so the holding company launched the 100+ Accelerator. Through this program, AB InBev helps the next generation of innovators develop ideas to solve the world's biggest environmental challenges. One is an equity investment in BanQu to provide financial identities to farmers in developing countries, where many do not have access to a traditional banking system. Another innovation investment is RSU Brazil, a social enterprise with the mission to take waste from landfills and transform it into clean energy, creating quality biomass from waste.
3M built an accelerator process into decades of its operations. The company provides employees with 15% of their time to tinker. This commitment has been extended through an internal Tech Forum of 10,000 3M engineers, who invent new products and solutions on an ongoing basis. The company has taken this further with a stunning declaration called the Sustainability Value Commitment, whereby every new product will have a form of sustainability built in. Imagine the impact as 3M develops around 1,000 new products every year.
Mars built an accelerator into its business goals to activate its overall purpose: “The world we want tomorrow starts with how we do business today.” Its pet food business built off the purpose, announcing a competition “to become a partner of choice for everyone willing to change the rules of the game in pet care.” Pet care is now the largest division for Mars from food to veterinary services.
8. Partnerships are essential to drive change at scale
“Purpose is only real when you treat it as a business priority with the same discipline as you would with any aspect,” said Pharoah. “And to scale, you need to have partnerships. You cannot do them yourself and no one has a monopoly on good ideas. It has to be about creating a greater good, not just trying to position yourself to gain competitive advantage.”
Companies with an authentic purpose seek partners for various reasons. Some seek to address large systemic challenges, such as sourcing sustainable ingredients to influence farming practices, and in turn, hundreds of brands and their products. Unilever created the Roundtable for Sustainable Palm Oil to reinvent industry norms for sourcing the ingredient. Unilever also partnered with UN Women to develop a global framework to drive safety for millions of women in rural spaces.
Focusing on business capabilities is another means to enliven partnerships. TCS has been the title sponsor of the TCS New York City Marathon since 2013. Through the company’s partnership with New York Road Runners, organizers of the event, TCS has made the largest marathon in the world into the most tech-enabled event of its kind, providing an enhanced experience to runners and onlookers alike. Expanding the event’s reach, the company works with youth groups to support the larger cause of health and fitness. To integrate the Marathon into the classroom, TCS invites 50 teachers from across the country to race, integrating their experience into the classroom with computer science and digital innovation experiences.
When creating a more responsible business model that reflects the needs of society, partnerships are key to drive transformational scale with authenticity. “Problems are so big and so complex that no one can really tackle them alone,” said Jimenez. “But we do believe that by doing this with partners in a thoughtful way, we can really make a difference and have a longstanding impact that we can later replicate based on evidence.”
9. Accountability and transparency are expected by all stakeholders
At a senior level, accountability is part of AB InBev’s KPIs, as well as part of the annual operating plans for business units and leaders. At a more junior level, employees have varied elective opportunities to practice accountability.
Mars’ sustainability goals are part of the KPIs of their CEO and EVP Global Supply Chain. This reinforces the importance of C-suite leadership and example-setting in activating purpose.
Setting stretch goals was a critical component of the USLP, which provided a strong framework for action, coupled with clear goals and metrics. “We were doing really well in things like reducing emissions from manufacturing,” said Sarah McDonald, Sustainability Director, Unilever Beauty and Personal Care. “But doing really badly in helping consumers reduce emissions. Trying to persuade people to change their habits has been incredibly difficult.”
The marketplace has spoken about the characteristics of top-performing CEOs: ranking #1 most important is a CEO’s positive contributions to society, according to recent research by Morning Consult with 11,000 citizens, opinion formers, and investors. The study found the drivers of CEO reputation and performance have dramatically changed from earning public trust, fairness, integrity, credibility and being a role model to drivers related to purpose.
Yes, we’re living in tough times. An authentic purpose, actively lived, can be a beacon in a world of disruption. Don’t just state your purpose. Live it by following the guideposts above and these core principles:
Listen and observe every day. Be sensitive to the signals coming from stakeholders.
Embrace employees. They are looking for support and counting on leadership for truth.
Be accountable. Make commitments and report on progress.
Live your values, daily.
Welcome to 2021. Authentically live your purpose to make it your new normal and your engine for growth.