Talking Business During Crisis: How organisations can survive now and thrive later - 'The role of purpose'

It is critical to live up to your purpose because many people have become cynical and very sensitive to companies that fall short. There is a balancing act here. Top leadership has to be involved because effective purpose has to pervade the firm and be supported by firm-wide policies and procedures. However, if purpose comes only from top management, it won’t shape behaviour across the firm.

Creating opportunities for listening helps manage this balance. A particular danger is listening mostly to mid-level managers and up, which often seems like the most practical way to get insights from across the breadth of the firm. However, it risks not hearing from those who work most directly with customers, suppliers and other parts of the community. It can also introduce an unintended generational bias if it doesn’t capture employees who have recently entered the workforce. In a time of rapidly changing values and expectations, that can be a problem.

In relation to building connection and trust with external stakeholders, it helps to have frequent and open communication, rather than either (a) assuming what different stakeholders want from the company and/or (b) treating it as a one-and-done exercise. I’ve helped facilitate discussions between for-purpose and for-profit organisations where we quickly found areas of common interest that each group had simply assumed would not be interest to the other.

Another balancing act with purpose is between ambition and reality. A good purpose should be aspirational—-it motivates by pointing to what the firm wants to become. But it also needs to be realistic or it will be viewed as a hollow PR exercise. 

Professor Glenn Hoetker

I agree that there is this tendency, but as we touched on, purpose can and should address all of an organisation’s motivating principals—many of which are mundane, traditional business concerns. Done well, purpose forces the firm to think through how it balances the needs of multiple stakeholder groups. I think most managers recognise that understanding how you will balance the needs of employees with the needs of shareholders, for example, is deeply relevant to any business.

When it comes to the idea of a “higher social good”, I’ve encountered a spectrum of attitudes across business leaders. For example, there is a growing awareness that many employees, especially those just entering the work force, value their employer having some social purpose. So, even from a very instrumental need to recruit and retain talented employees, a firm isn’t well served by taking too narrow a view of its purpose. The example I gave of Paul O’Neill making safety a keystone habit at Alcoa is relevant here.

I also encounter leaders who want their organisation to make a broader positive impact, but need a way to do so in way that doesn’t work against the success of their company and career in other dimensions. That requires creativity and sometimes new skill sets. Helping leaders explore that business case is actually a big part of my work around sustainability.

All of which is to say that, first, purpose is very relevant to “traditional” business concerns and, second, financial and pro-social aspects of a purpose don’t need to stand in opposition to each other.

Professor Glenn Hoetker

For a very practical example, you might look at the example of Barry-Wehmiller and how it responded to the GFC without laying off any of its 12,000 employees. There is a nice story about it here. 

Professor Glenn Hoetker

The best example I've seen is not corporate but Jacinda Ardern in New Zealand. She is clear, compassionate (recognising and acknowledging the people impacts) and very effective at generating active compliance and pride in New Zealand's response to the COVID-19 crisis. In my view, I have seen lots of honesty and care.

Professorial Fellow Amanda Sinclair

Striking a balance is key. We have a higher tolerance for Zoom now but as we exit the crisis, I would recommend regular (perhaps quarterly) face to face meetings for all employees, where possible. These meeting should be announced with plenty of notice to acknowledge that, since working from home, employees may have restructured their working days to suit their preferences and needs.  Organisations also need to look at ways to improve ways of connecting remotely, rather relying solely on Zoom, for example. 

Professorial Fellow Amanda Sinclair

Purpose/mission tends to be the most enduring part of the strategy on a page.  That said, when a new CEO comes in and wants a significant cultural change, you often get a new purpose/mission.  Unless the purpose truly captures the DNA of an organisation and a group of stakeholder are very loyal to it, the purpose won't outlast a CEO. 

Professor Geoff Martin

That is a tough one!  I have clients in this space and I hear you.  I am not an experienced negotiator in that space, so I begin by saying you need some expertise in that area.  In a recent workshop with a new GM responsible for managing waterfront employees and the associated EBAs, when he arrived, they were saying "welcome to the business, let us tell you how we do things around here".  When we went through the exercise of clarifying purpose and values, he then was countering, "that's not what this company is about; this place is about passion for community and customer which means we have to do .....".  Not sure if that helps.

Professor Geoff Martin