26 Jun 2020
Finding and defining post-pandemic corporate purpose
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Is COVID-19 an opportunity for businesses to switch to a more altruistic, ethical and meaningful form of leadership? Laura James investigates.
The drive for a sense of purpose beyond profit and the pursuit of more noble corporate goals are subjects high on the agenda in boardrooms around the globe. The COVID-19 pandemic and the response to it may change the way we do business forever and, to achieve a cultural shift for which consumers appear to be clamoring, businesses will need leaders prepared to lead in a very different way.
Odgers Berndtson Partner Carlos Versteele, based in Brussels, believes business must continue to encourage leadership that focuses on creating value beyond the bottom line by developing what he calls a “giving culture”.
“Many leaders are very efficiency-based,” he says. “It’s all about operational aspects to save costs. What we need to do is help them understand the importance of having higher and noble goals, creating value beyond sustainability.
“To paraphrase Kennedy, instead of thinking about what you as a company can get from the world, you have to think about what you can do for the world. It’s about a giving culture.”
“Disruption will trigger even more clearly the more noble goals a leader stands for.”
What’s next for business?
Versteele says businesses are at a pivotal point and face a stark choice: beyond the Coronavirus pandemic and the societal changes that will result, businesses can go back to where they were a few years ago, or they can learn from the crisis, adapt and move forward.
He points out that it is already clear that companies that focus on creating value for the long term benefit from better returns than those focused simply on profit-making quarter by quarter.
The demand among consumers for Versteele’s approach appears robust. A report by Wunderman Thompson Intelligence, the New York-based think tank, found that consumers expected brands to continue to evolve to fill a perceived philanthropic void.
According to the 2020 Edelman Trust Barometer, in the United States and the United Kingdom, 90% of consumers felt brands had a responsibility to take care of the planet and its people. Just over 70% of global consumers agreed that if they perceived a brand was putting profit over people, it would lose their trust permanently.
People over profit
The COVID-19 crisis has seen the corporate sector at its best, with businesses not simply fighting to stay afloat, but collaborating for the benefit of the wider community. LVMH brands Dior, Givenchy, and Guerlain have adapted manufacturing facilities to produce free hand sanitizer for healthcare workers in France, while Louis Vuitton plants have been repurposed to produce vital personal protection equipment (PPE). At the start of the pandemic, Dyson teamed up with engineering firm TTP to develop a new design of ventilator in 30 days.
Pharmaceutical giants GlaxoSmithKline (GSK) and Sanofi joined forces to develop a vaccine to fight COVID-19. “This collaboration brings two of the world’s largest vaccine companies together,” Emma Walmsley, CEO of GSK, has said. “By combining our science and our technologies, we believe we can help accelerate the global effort to develop a vaccine to protect as many people as possible from COVID-19.”
Futurist strategic consultant William Higham, CEO of Next Big Thing, agrees with Versteele’s premise. “People do expect the brands and businesses they use to do the decent thing,” he says. “We’ve all been a bit like Santa Claus, making a note of which companies have been naughty and which have been nice. It’s all part of the Great Reset trend we are seeing.”
Once the world emerges from the crisis into some kind of new normal consumers will be looking to organizations to continue such good work. Higham points out that until now nobody has expected businesses to do the right thing simply because we might want them to. The global pandemic has changed that view and demand for real change is evident.
Are today’s leadership demonstrating vision and purpose?
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“There are two factors impacting this now,” he says. “One is that doing good will have a powerful, positive impact on the bottom line. Two, people are beginning to reassess and are feeling businesses should do good.”
Philippe Voisin, CEO of Belgian bank Crelan, believes a spotlight will be shone on corporate behavior during the Coronavirus pandemic and consumers will judge leaders by their actions. He says: “Our relationship to things – to what seemed essential – is changing. Our collective experience shows that the impossible is possible.
“For companies, this is a moment of truth. What will the world be like next? No one knows. What we do know is that the crisis reveals what we are actually doing for society. Companies that have not found ways to contribute to society will be at such a competitive disadvantage that they will eventually disappear.
“The definition of a purpose has beneficial effects on long-term performance, provided all management adheres to it. The purpose has credibility only if it has a hold on the strategy, with the need for trade-offs in the allocation of financial and human resources. We must take advantage of this crisis to assert our raison d'être even more clearly. It must reflect a singular project of existence. It must reflect a future identity in a changing world.”
Carlos Versteele thinks this change in priorities is what will drive business forward in the future. “For me,” he says, “it comes back to what are we here for? Is it just to make a bit of money or is it to serve humanity, to serve the world? The whole mindset needs to change. Some leaders have already done this.”
In his view, effective leadership will be founded on balance, common sense, courage, and an increased ability to think creatively while empathically listening and relating to others. It is, he feels, about purpose not process and the ability to show compassion for people inside as well as outside of any organization.
“The way we are looking at leadership characteristics now can be called I M for Common Good. The ‘I’ stands for inspire – leaders need to take responsibility in enlightening people on their path to the worthwhile goal. The ‘M’ is for motivate, which they must do to get the team to work together for the higher purpose.
“The ‘C’ is for challenge. Leaders will need to ask the right questions and demonstrate trust so everyone understands what they can and need to learn. Finally, the ‘G’ is for guide – leaders need to show the way forward in a steady way and need to lead by example.”
The health crisis has turned everything on its head and it is businesses with adaptable, altruistic leaders that will emerge with greater value – for their employees, their stakeholders, their suppliers, and – importantly – for ever more ethically-minded consumers.
Find out more about Odgers’ Berndtson’s leadership development consulting.
In this series, OBSERVE looks at how companies and their leaders are adapting and reimagining their organizations’ strategies and what lessons leaders have learned through the immediate impact of the coronavirus pandemic.
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