Purpose & the CEO
Company purpose is more than just a statement or the ‘North Star’ of future intent.
It’s a multi-faceted framework that drives all aspects of a business to deliver value to all key stakeholders (customers, employees, investors, the planet), not just shareholders. Commonly referred to as “stakeholderism”, the needs of each group need to be balanced when considering the strategic direction and deliverables of a company. While this may seem like a logical endeavour given the many societal issues we face, there’s a plethora of market confusion around the concept of company purpose. This is largely due to an over-abundance of initiatives, confusion with who is responsible for purpose, coupled with variations in interpretation and measurement. This has lead to a phenomenon where complexity has been sacrificed for simplicity - ultimately disempowering progress. Further, companies without the necessary support may put the adoption of purpose into the “too hard basket”. Given the benefit to society, there’s a motivation in the public interest for purpose to work better - how can this be achieved?Purpose & the Chief Executive Officer
Globally, purpose now plays an integral role in the leadership framework. The role of the CEO has expanded to include driving purpose throughout the organisation and managing its performance.Key stakeholders as well as society at large look to the head of companies to ensure that their purpose is authentically and transparently executed. They also hold them accountable for purpose falling short of the mark.The good news is there are notable benefits already being experienced by company heads across the globe adopting purpose.In fact, latest global research with CEOs across six markets found 89% of respondents either have, or want, a purpose statement. Further, 63% stated their purpose now directly influences the majority of their decision making and acts as a strategic compass.What’s next for the CEO?
In short, purpose helps CEOs navigate volatility and provides guidance in times of uncertainty. Get purpose right, and the benefits are enormous - financially, reputationally and as a catalyst to short term growth and building long term value. Get it wrong, and this can have devastating affects to a company. The key in 2023 is putting purpose to work so it is filtered through out a company rather than being stuck in the C-Suite. Apart from opportunity cost of not actioning purpose well, ‘purpose-washing’ will likely fall under the scrutiny of the law in the same way greenwashing has.References:
‘What is Purpose-Washing?’ Brand Clarity
Harvard Business School - Measuring Purpose - An Integrated Framework (2021) https://www.hbs.edu/impact-weighted-accounts/Documents/Measuring_Purpose-An_Integrated_Framework.pdf
Harvard Business Review (March - April 2022) https://hbr.org/2022/03/what-is-the-purpose-of-your-purpose
