My entire corporate career was dedicated to bringing brand purpose to life.
This was the time when brand purpose and values lived in the world of marketers, advertisers and the people involved in developing the brand’s creative elements and messaging. Brand and business purpose wasn’t the central plank of an organisation it has to be today. While it was important to marketers then, today a business’s purpose is expected to be evaluated, implemented and continually refined by the board and throughout the company at every level and in every function.
Purpose is platform agnostic, so it needs to be clear and visible online, in-store, through layers of service, on packaging, in media, via reporting and displayed through every corporate behaviour.
The board and purpose
Today’s boardroom discussions include debate around purpose, the company’s values and how the board can ensure each of these are reinforced through business strategy, community and customer engagement and daily operations.
According to a Deloitte Insights report: “Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction”. They also found that “research shows that such companies report 30 percent higher levels of innovation and 40 percent higher levels of workforce retention than their competitors”.
It is definitely in the board’s interest to ensure it is living its purpose.
Consumers are leading the charge
Today consumers identify with a brand’s purpose and values, seeking to connect at a deeper level resonating with a business or brand where it aligns with their own values.
Potential employees of any age, but particularly Gen X, Millennials and Gen Z will choose where they work, what products they buy and which company they support based on the way a business behaves and how they perceive that brand. To quote the co-founder of Canva, one of Australia’s most innovative and successful start-ups, Cliff Obrecht: “People want to work for companies that are doing good in the world … not just for some corporate benefit or making some particular person rich. It is about giving back to the world and having a net positive impact.” There is no doubt of Canva’s purpose.
Consumers and stakeholders care and are vocal across digital channels and respond to and create advocacy holding business accountable when it comes to purpose. They are forcing organisations to value it like financial performance and business sustainability.
As a board it is crucial to continually have discussions to challenge whether your business is ‘living’ its purpose and evolve accordingly.
The board’s role in the race to purpose
So, what is the board’s role in evaluating and acting on purpose? Our role isn’t to live in the day-to-day of the business, which is where purpose comes to life, so how can we do it effectively while remaining focussed on strategy and overall performance?
Firstly, we need to look at the ASX’s Corporate Governance Principles definition of the role of the board when it comes to purpose and values (recommendation 3.1, 4th edition): “Values create a link between the entity’s purpose (why it exists) and its strategic goals (what it hopes to do) by expressing the standards and behaviours it expects from its directors, senior executives and employees to fulfill its purpose and meet its goals (how it will do it). Investors and the broader community expect a listed entity to act lawfully, ethically and responsibly and that expectation should be reflected in its statement of values”.
It’s now incumbent upon directors, together with management and the entire organisation to have a clearly articulate and “lived” purpose. A board must oversee a strategy that aligns business actions to purpose and values.
From the board’s perspective, purpose steers the ship but it also defines what the business wants its reputation built on, the values it stands for, the employer offering and how to make it central to every aspect of business strategy and operations. This coincides with a new push by regulators and shareholders for disclosure on culture which today informs strategy, all driven by the organisation’s purpose and values.
What a board can do if purpose needs to be elevated
If you’re a director there are steps you can take to elevate purpose. The AICD suggests five critical questions relevant to determining purpose:
- Why does this organisation exist?
- What does this organisation do?
- Who does this organisation benefit?
- How will this organisation achieve its goals?
- What does success look like for this organisation?
The answers will ultimately form the ethical framework of the business and set the cultural tone.
During my boardroom career, I have observed that boards and directors that steer a business to live its purpose are those that:
- Lead from the top, articulating and demonstrating the values every day.
- Work with management and staff, listening and learning to ensure alignment across the business and its customers.
- Evolve and build out from their values and purpose as the market and customers change, staying on top of contemporary expectations.
- Have a built in belief and radar around doing what’s right at all times.
- Are agile and accepting of the need to change, able to drop ownership of past behaviours and step forward with humility and authenticity, admitting when change is required.
Purpose has a human element at its heart. It drives who you are, what you stand for, what you care about and how you will behave. For a business, it is a critical differentiator for that business and its brand. Done well, a business’s purpose is evident in all actions without needing words.
Just like the tortoise, purpose is the thing that wins when the hare stops moving.
Published in Digital Nation. Oct 7, 2021