What’s the purpose of corporate purpose?

By Emma Kane

In a crisis, the true character of an organisation is exposed.  An organisation without a clear corporate purpose can be left naked and that image left lingering long after Covid-19.

A corporate purpose is a reason for existing, it is the impact your organisation wishes to have on the world.

In the current environment, there is no room for ‘managers’, this is a time for leaders whose every decision is now in an even brighter spotlight.  Corporate purpose provides a framework in which bold decisions can be taken swiftly balancing the impact on one group of stakeholders versus the needs of another. 

This is not a time to be timid.  The organisations that will bounce back the fastest are those that have communicated not only their decisions but the rationale behind them.  If that rationale is based purely on financials, is highly defensive, lacking empathy and detached from your corporate purpose, the punishment will follow – maybe not immediately but stakeholders have long memories. 

The result includes not only loss of brand equity, but increased recruitment costs, and loss of confidence among your customers because you have made the greatest mistake of forgetting your corporate purpose and the needs of all your stakeholders.

A well-crafted company purpose is not just a bumper sticker – it will also have a set of values attached to it.  Not just to print on a mug or post above a photocopier but to guide critical and decisive action that is lived and breathed every day, by everyone across the organisation.

Companies who shirk their responsibilities towards society risk losing their licence to operate.  Whilst activist shareholders may look for a fairly immediate return, they are now increasingly using failure to prove a commitment to purpose such as embracing ESG, as a vehicle to agitate with.

Use the current time to check yours – is it fit for purpose?  Have you tested the decisions you are taking against your corporate purpose?  Do they meet your values – the values you have as an organisation but also as a leader?  Does your team clearly understand your corporate purpose and values?  What do you do that can make the biggest difference to your stakeholders? 

What matters now is applying your corporate purpose to identify solutions that are fair and sustainable. Your corporate purpose can bridge the chasm between various stakeholders such as shareholders and employees and the impact on the corporate identity and brand equity.  Effective communications are at the heart of this. 

An organisation with a clear purpose knows the direction it is heading and the reason it is on that journey.  The battle to win is balancing making the maximum profits with finding a purpose and showing that the company is a force for good.