Amid new focus on ESG, functional leaders can help their company live its values
Leading with purpose has never been more critical. Challenges like the pandemic, political divides, and societal system racism have already prompted many business leaders to consider how company purpose can play a larger role in their organization. Now, there’s also new pressure from investors, employees and communities for companies to demonstrate their commitment to purpose by publicly setting ESG commitments and showing how they’re making progress on those goals.
The key, however, is confirming an organization not only talks the talk, but also walks the walk, on its stated purpose. Increasingly, stakeholders want companies to do more than say they’ll focus on environmental sustainability, diversity and inclusion, and governance issues. They want disclosure on where those companies stand now and to see demonstrable action toward improving in those areas.
This is where focusing on purpose can help. Those companies that lead with purpose see that creating value for all stakeholders and society at large—not just financial gain for shareholders—means doing more than occasional company-sponsored charity work. Done well, many are finding that doing good can also add to the bottom line.
Results from PwC’s recent survey (conducted in April 2020) of business leaders, consumers, and employees on corporate purpose and technology provide some salient points to consider. We surveyed consumers, business leaders, and employees in six global markets. Asking employees and consumers to share their opinions on purpose alongside business leaders underscores the movement toward stakeholder capitalism that has been gaining steam since the Business Roundtable reworked its definition of corporate purpose in August 2019.
Survey results show that the balance has tipped decisively toward the importance of purpose, with 71% of consumers and 94% of business leaders agreeing that companies today share a commitment to creating an economy that serves everyone, not only those who profit financially. Employees are looking to employers to see how purpose is reflected in everyday actions and decisions. And in our survey, they indicated that companies have a ways to go, rating them lower than business leaders did in how organizations are delivering on purpose-related priorities, such as transparency, compensation, and upskilling.
To deliver on purpose, someone needs to own it, right? Yes, but it need not be one individual in the company. Most business leaders in our survey (54%) said the person with the greatest responsibility is the CEO. But the CEO can’t carry the torch alone, and neither can any single executive. The board of directors can play a role in oversight, but everyone from the top talent leader to the head tech honcho can and should step up. That’s especially true given that purpose guides many business decisions, from tech selection to marketing.
The role of the CIO/CTO is changing as the role of technology becomes more core to the way many companies do business. The CIO’s role in helping drive purpose forward, includes leading the rollout of technologies that can help advance purpose, including providing employees with opportunities to learn, relevant skills (upskilling) as well as overseeing the ethical use of technology. For CTOs, there is a focus on integrating purpose into decisions about product development and delivery, which 92% of business leaders said is already happening.
In our survey, 63% of business leaders strongly agreed that their company uses tech to advance purpose. That leaves a significant portion of leaders who think their company could be doing more. Not to mention that 71% of employees surveyed agree that their company’s use of technology lags that of others, making it more difficult to deliver on purpose.
The COO can help operationalize purposes, including confirming that their company selects business partners whose purpose aligns with its own. In our survey, 63% of business leaders said they look at the purpose of potential partner companies' to help choose between business partners that are otherwise similar— which means the rest may not consider purpose in such cases.
CFO’s role includes ensuring purpose-related business initiatives and decisions make financial sense—as well as monitoring risk or compliance issues that may arise, if that’s already part of the job. Only 27% of business leaders in our survey said they thought CFOs have the greatest responsibility for defining the company's purpose—but any organization that aims to prioritize purpose should have participation from the head of finance.
The CHRO should be closely involved with any purpose-related employee upskilling and engagement activities. In our survey, consumers, employees, and business leaders agreed that there’s a connection between how a company treats its employees, the makeup of its employees, and company purpose. In fact, 62% of consumers surveyed said treatment of employees impacts their purchasing decisions. Meanwhile, 40% of business leaders and 42% of employees said employee treatment is the most important way companies reflect their purpose.
The CMO may have a hand in a few areas, but in particular, marketing leaders should be sure the company is effectively communicating its purpose work—an area that 62% of consumers reported was difficult to grasp. And in terms of communication, our survey showed consumers find advertising that reflects purpose less engaging (or trustworthy) than hearing about purpose from employees or in customer reviews and testimonials.
You could also take the approach of some tech industry leaders, who have created a role focused specifically on the ethical use of technology. But when all the leaders get involved, you can help confirm your purpose goes beyond technology and take full advantage of not only these leaders’ specialized expertise, but also their ability to draw on the varied work—and life—experience of their teams.
Connect individual, role and organizational purpose to help emphasize the connection between how your employees feel about their purpose and how it comes to life in their roles in the firm and reflects the larger purpose of the company.
Integrate purpose into leaders’ messages, as well as board discussions, performance reviews, company events, and so on.
In short, bake purpose into your company culture in the multitude of ways that culture comes to life each day.
PwC’s award-winning Consumer Intelligence Series enables greater insight into consumer and executive attitudes and behaviors in a rapidly changing world. The findings are based on surveys, focus groups, video interviews, immersion sessions with industry specialists and online listening campaigns.
This is the second report from the most recent survey, which focuses on purpose and technology. It was conducted in April 2020 and included 6,170 consumers globally, including 1,157 from the US; 3,094 employees globally, including 431 from the US and 1,500 business leaders globally, including 250 from the US.