Learning lessons from leading lights on constructing a meaningful company purpose
Guest writer: Richard Aldwinckle
In July last year, I wrote a blog for Blueprint for Better Business called Piffle or Pertinent: Does your company have a meaningful purpose? in which I lamented how few companies were developing purposes that really leveraged what they had to offer society. To reduce the number of companies producing purposes that are, in the words of the FT journalist Pilita Clark, ‘twaddle’, I called on those companies that are recognised as the leading lights of the purpose and sustainability movement, to share details of the methods they used to develop their purposes and explain how they have integrated them into business strategy, processes and decision-making.
So when Ben Kellard, Business Strategy Director at the Cambridge Institute for Sustainable Leadership (CISL), suggested producing a report this year on how leading companies developed and embedded their purpose, I was pleased to be able to contribute some of the insights I gained working with Unilever’s senior leadership team in helping them to construct and articulate their purpose – ‘making sustainable living commonplace’.
CISL’s new report, Leading with a Sustainable Purpose, clearly sets out the need for a corporate purpose to be aligned not only with a company’s sustainability strategy but with its commercial strategy as well. This is critical. A purpose that fails to deliver value for both society and the business will be neither sustainable nor scalable and risks ending up becoming nothing more than a fancy slogan describing business as usual. For most companies, as the report emphasises, this means radically changing their whole business model.
Largely based on interviews with leaders from four multinationals (Unilever, IKEA, Interface and DSM), the report sets out ten principles and a list of practices these companies used to align their strategy, business processes and culture. Like Gaul, the guide is divided into three parts: aligning purpose, strategy and sustainability; integrating practices across the core business; and communicating and engaging externally.
As well as helpful advice on how to embed purpose into the business, there is rightly a lot of emphasis on the importance of helping the Executive team understand the shifting expectations of the role of business in society and the business benefits of having a sustainable purpose. This is where having a group of external experts acting as an advisory board and ‘critical friends’ can be helpful in getting them to see the bigger picture.
There’s also a section which specifically focuses on how to construct a sustainable purpose. Here I was able to share the process we used at Unilever to determine their purpose, which examines the overlap between four key lenses:
- How best to leverage the company’s distinctive capabilities, assets and offerings
- The current and future potential for developing profitable, long-term value propositions
- The areas where the company is best able to make a difference to sustainable development
- The social and environmental systems the company depends on across the value chain.
It is at the intersection, or what at Unilever we called the ‘sweet-spot’, between these four components, that the distinctive contribution a company can make to society and the world can be identified. Once the essence of this contribution has been defined, a purpose statement is best articulated in the form of a short phrase that uses everyday language, is inspiring for stakeholders, distinctive to the business, and specific enough to guide decision-making.
As well as the report, anyone looking to develop a meaningful purpose should also take a look at two webinars Ben hosted with the CSOs of the four companies involved, as these add both colour and detail to the report’s long but inevitably condensed list of practices, as well as Blueprint’s illustrative journey which shows just what an iterative process this can be.
The Financial Reporting Council’s Review of Corporate Governance Reporting, published in November 2020, once again highlights the paucity of purposes that are fit for purpose. For those companies yet to define their purpose and those still thinking about it, a read through Leading with a Purpose would be time well spent.
Richard Aldwinckle was an adviser to Unilever on sustainability, purpose, positioning and communications from 2002-2017 and a contributor to CISL’s Leading with Purpose Report.