This article first appeared in Forum, The Edge Malaysia Weekly on December 20, 2021 - December 26, 2021
As companies start to resurface from the Covid-19 crisis, corporate leaders will need to look into more than just securing the lives and livelihoods of their staff. They will need to look closely at the longevity and long-term sustainability of their businesses. They must consider how intentional their company is in living out its corporate purpose, its core reason for being and also its response to definitive questions like: What would the world miss if we were not here? What makes our business so essential (or conversely, non-essential)?
Why should a company focus on defining its purpose now, when most people are more preoccupied with survival? Why is a company’s purpose even more important than ever today, when corporate leaders are confronted with so many crippling challenges?
Focusing on purpose may seem like a softer approach that lacks the substance and structure needed to help companies navigate their way out of the pandemic and into the new normal. Yet, the commercial case for purpose is compelling.
People want to work for companies that put a meaningful purpose behind their operations. A global talent trends survey by Mercer found that the highestperforming employees are three times more likely to work for a company with a strong sense of purpose. Yet, only 13% of the 7,600 respondents surveyed said that their organisation is differentiated by a “purpose-driven mission”. A 2018 survey by Cone/Porter Novelli also showed that 91% of Millennials (born between 1980 and 1994) would switch from a product they typically buy to a new product from a purpose-driven company.
However, a purpose needs to be more than just words promoted in posters or PowerPoint slides. In October 2019, McKinsey surveyed more than 1,000 representative participants from US companies, where 82% of the respondents acknowledged the importance of purpose. However, only 42% said that their company’s stated purpose had much effect. Hence, a purpose needs to be a “living” document that puts purpose to work, and translated into what needs to be done at a company daily.
A well-defined purpose has guided many evergreen companies to effect the right changes to endure the challenges they have faced over time.
For 40 years, Starbucks has built its business as the “third place” in people’s lives. As long-time CEO and chairman Howard Schultz put it, “At home, you’re part of a family. At work you’re part of a company. And somewhere in between there is a place where you can sit back and be yourself.” As the “third place” where customers could escape, reflect, read, chat or listen, each Starbucks store was designed to be inviting, a place to linger. However, the chain has not been immune to the pandemic. Very recently — last month — Starbucks opened a concept store in Manhattan together with Amazon’s cashierless Amazon Go Markets. The new store is designed to offer mobile ordering and pick-up, without any in-person interaction. It plans to open another two similar locations in the next year. People may not spend time in their stores like they used to, but people have kept going to Starbucks for a coffee. A letter sent to Starbucks stakeholders mentioned, “No matter the format, we know that the Starbucks ‘third place’ experience occurs from the moment a customer envisions their daily Starbucks experience to wherever they enjoy that Starbucks beverage.” Starbucks is acknowledging that the way people live and spend their time today has evolved and seems to be adapting its original purpose accordingly.
Daimler, the mother of Mercedes-Benz, has a beautiful purpose statement, “Shaping the future of mobility.” We love it because it is related to what the company does but also goes beyond what it does today. It drives the company to shape and share innovations in sustainable mobility, whether it is mobility by cars, trucks, drones, petrol-driven or electric vehicles. It is also something the world needs, as people everywhere require mobility.
Tenaga Nasional Bhd (TNB) was founded more than 70 years ago, with the purpose to power the nation. Now that most of Malaysia has been “powered”, TNB wants to go beyond this. It wants to explore new territories with a range of innovative and sustainable products and services. TNB recently revisited its purpose, transforming it into “Together we brighten lives through innovative and sustainable solutions towards a better world.” A great example of how purpose can evolve and refresh a company’s resolve.
So, how can you, a corporate leader, start thinking about your company’s purpose statement?
We believe it starts with a sort of personal awakening. As a leader, you must be willing to have a little silence in your life to reflect authentically on essential questions. As author Simon Sinek says, “Start with Why”: Why do I jump out of bed every day? Why do I give so much of my energy, time and other resources, at the expense of other valuable things in my life? Dig deep into your answers to uncover the core, so it is not just a “tick-the-box” exercise.
The best-loved purpose statements are never those rolled out through a top down approach. They are co-created by bringing together the ideas and experiences of many people in an organisation. Bringing your people with you from the very start will foster ownership of and enthusiasm for the purpose. The boardroom, with its intellectual knowledge, should initiate and ignite the process. However, the real “gold” is found on the shop floor. It is the company’s heartbeat, where staff (especially the long-timers) interact with customers regularly and know the pain and gain of the daily grind. Listen sincerely to their stories as they have a lot of value to share. Start tough conversations and understand where things really stand to ensure everyone is actually on the same page.
Purpose must be clearly articulated and ultimately be translated into steps that drive symbolic emotional changes, steps that people on the shop floor can relate to. Employees need clarity on how they can contribute. At Ritz Carlton’s daily 10-minute “line-up”, they ask employees in each shift to give examples of how they contributed to the higher corporate purpose or how they messed it up. This simple daily sharing of stories is easy to activate but genuinely inspires staff and keeps the big “why” of Ritz Carlton alive.
Use behavioural science to assist you, as business is often more emotional than we think. Ultimately, to succeed, corporate leaders need to win the “hearts and minds” of employees, customers, shareholders and all stakeholders. We have had to help our clients “humanise” strategy, and make difficult concepts and data more “human”. Our clients are surprised that the seemingly “fluffy, airy-fairy stuff” can be made concrete and measurable. When anchored and steadied by a strong purpose, behavioural science can provide the scaffolding to help make “hard things soft, and soft things hard”, enabling the company to align the motivations of its people to help it reach greater heights.
If you have a strong purpose, it disciplines you. You need to translate it into strategic choices that you make. It means that some things are not doable anymore. You cannot be all things to everyone. It will force you to consider fundamental questions like: Who do we want to serve? What do we want to provide? And not provide? You have to scrutinise your whole product and brand portfolio to see if it is purpose-proof. You may review your portfolio and end up withdrawing or introducing new products and brands, just as TNB, with its change in purpose, is now focusing on renewable energy. You may even evaluate the markets that you serve and your pricing strategy. Google was confronted by these tough questions when it contemplated its march into the massive China market. It eventually decided to stay out of China, a country well known for its restrictive censorship, to stay true to its purpose “to organise the world’s information and make it universally accessible and useful”.
Purpose is critical to business today and especially important in these difficult times. In good weather, every captain looks like a fantastic admiral. However, the really exceptional ones show their true mettle in stormy weather. When it is dark around you, people are always looking for light, and light is what purpose provides. When people feel tired, exhausted and hopeless, purpose gives them the positive energy, hope and optimism to carry on.
Nur Hamurcu and Wouter van de Weijden lead the Dutch boutique consultancy &samhoud Asia
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