In 2006, Indra Nooyi, Chairman of PepsiCo, launched a new vision for her company. “Performance with a Purpose is based on the belief that companies can – and must – achieve business and financial success while also leaving a lasting and positive imprint on society.”
In 2006, it was unusual to hear a CEO equate in importance financial performance and Corporate Purpose. To imply that Purpose should be an intrinsic part of business strategy. Now, we are far more accustomed to listen to well-known CEOs such as Paul Polman of Unilever champion the firm’s Purpose in everything he says and everything Unilever does.
A recent PwC report into Purpose found that 90% of the 275 CEOs interviewed had a clearly stated and defined purpose, and 63% of them said that their company’s purpose made a positive contribution to their revenue growth; 83% said that purpose served as a valuable guide for the business decisions they made.
But putting Purpose into practice in this way is no easy task – how do companies define their Purpose? How can they ensure it is authentic? How can they ensure that it is driven through all business operations, and not “just” a CSR initiative? And how can they ensure Purpose is embraced throughout the whole business?
These were the key issues debated at a Farner Forum in Geneva on 17th January. We were fortunate to have very insightful speakers to shed light on how far along businesses really are with Purpose and how to actually put Purpose into practice.
Why Purpose Matters
Paul Afshar, Partner, Purposeful Business, Fleishman Hillard, told the audience that, although we may feel businesses are very far along on the responsible business agenda, 55% of CEOs still disagree that sustainability is important to their business; global CO2 has doubled since 1990 and Africa’s poor have increased from 280 million in 1990 to 330 million in 2012.
Businesses however are waking up for the need to define a higher purpose for what they do, if only to attract and retain Millennials who will be 75% of the workforce by 2025. 76% of them consider a company’s social and environmental commitments before deciding where to work. 87% believe the success of a business should be measured in terms of more than just its financial performance.
Added to a recruitment ‘win’, corporations also realise it’s better for business. Witness Nike’s share price hike after its Kaerpernick ad, or Amazon share price after Bezo’s divorce. In latest news too, even the controversial Gillette ad is garnering consumer support after a bumpy first few weeks when it faced a backlash from some quarters.
How Purpose Shapes Corporate Communications
Aimee DuBrule focused her presentation on her work as head of communications at Nestle Cereal Partners Worldwide, the joint venture between General Mills and Nestlé which makes cereals such as Golden Grahams and Shredded Wheat.
Her focus was to change perceptions about breakfast cereals externally and reenergize people internally amidst negative media coverage about salt and sugar content in cereals increasing regulatory pressure and changing consumer views.
With a Purpose statement of ‘We Make Breakfast Better’ she was able to communicate with over 20,000 employees as well as major media coverage in the global business press and engagement with influencers in nutrition.
Nollaig Forrest, Vice President, Corporate Communications, at Firmenich SA, talked about how personal Purpose felt to the founding family at flavour and fragrance company Firmenich, underlining the need for authenticity in Purpose.
She also touched on why its Purpose (Creators of Positive Emotions to Enhance Wellbeing, Naturally), not only underlines its key messages but also is underpinned by science – the company having studied the effect of fragrances for example on the neurones of the brain.
Among the more memorable stories Nollaig told of how the firm’s fragrance expertise is leveraged for good, was the partnership with the Bill & Melinda Gates Foundation to develop breakthrough malodor control technologies to encourage use of toilets in the developing world – and thus curb mortality from diseases due to lack of sanitation.
From CSR to The C Suite
Purpose has obviously moved on quite some way from being akin to a mission statement to something much more fundamental and most at the event agreed that “authentic corporate purpose guides business decisions and is central to developing strategy”, as well as the key fact that while communicating Purpose internally and externally is critical, it is not a communications tool. Authenticity of corporate purpose happens when there is alignment between a firm’s perceived and stated corporate purpose and the actual strategic decisions and actions a firm takes.
Clear from the event and the questions from the 26 attendees was that the world of Purpose has moved up the corporate agenda: in many cases out of the office of the CSR director, and into the corner offices of C Suite. Long may that continue!