The pandemic has forced us to look inward, to take better care of ourselves and each other. It was also a wake-up call concerning the impact of human activity on the world around us. We have renewed our quest for purpose in our personal and professional lives, too.
Agnieszka Kłos-Siddiqui, Country Manager at Provident Polska
Soul-searching is also sweeping across the corporate world as companies redefine the purpose of their business activity. The world at large is undergoing profound economic and social changes – do corporations have to have a say and take a stance concerning various issues affecting their customers and workers? Is the corporate mission limited only to making profit and creating value for shareholders?
These questions echo in C-suites as companies scramble to navigate an increasingly complex business environment. Finding the right answers is even more important in the face of changing employee expectations. A McKinsey survey shows that 72 per cent of workers expect purpose to receive more weight in their workplaces than profit.
The pandemic has also shaken the world’s foundations – the amalgam of “wokeness” and cancel culture has created an atmosphere of distrust concerning information coming even from verified sources. Brands can be instantaneously pulverised on social media if their actions are perceived as dishonest or in violation of environmental and cultural norms.
Trust has become a valuable commodity. Taking a stance on a cultural or political issue is increasingly difficult as the corporate voice needs to be authentic to be believed. According to this year’s Fleishman-Hillard study, nearly two thirds of consumers believe that for a company to be more credible than its competitors it must talk about its behaviour and impact on society and the environment, not just the customer benefits it offers.
As corporations move from “what” to “why”, three main challenges loom on the horizon. The first is how to feel the pulse of social and political undercurrents – to avoid jumping the gun or being too slow to react. The second pertains to weaving the values companies stand by into the fabric of the responsibilities they have towards their shareholders. Finally, corporations need to ensure that their employees are on board and feel aligned with the values their company represents.
Misunderstanding the social and political context surrounding controversial issues may leave companies facing down a firing squad. Few brands have learned this lesson harder than Pepsi. Its ad campaign starring supermodel Kendall Jenner was supposed to showcase the brand as millennial-friendly and with a socially relevant and unifying message concerning the Black Lives Matter movement. Under severe criticism of co-opting a grassroots protest movement for commercial gain, the company withdrew the ad within 48 hours of its launch.
To be authentic, it is no longer enough to support a cause relevant to the wider audience. Being authentic requires values to be aligned with the company’s vision and is built from the bottom up, by liaising with pertinent stakeholders. Companies’ actions need to be coherent, their intentions well-understood and shared by both employees and customers. Leading by example is crucial. That is why as the leader on the Polish loan market, Provident has forged a permanent relationship with the Council for Ethical Advertising to make sure our ads conform to the strictest ethical standards.
Shareholder returns are a vital part of a company’s raison d’être, but not the only one. A company’s purpose needs to recognise that returns from business performance are broader and transcend purely financial gains. Research by Fortuna Advisors on S&P 500 companies shows that firms that score high on corporate-purpose metrics recorded 14.1 per cent higher revenue growth in 2020 than companies with a low score. It also turned out that the high-purpose group also saw better resilience to the pandemic, as these companies even further outperformed those scoring low on values.
The overarching challenge is to align the business purpose with that of its employees. Individual motivations and perceptions of what truly matters in one’s personal and professional lives differ across the population. Therefore, companies need to identify where employees are to be able to work on solutions that can help them derive fulfilment from work.
This knowledge has become even more crucial as the pandemic has made employees increasingly reconsider their roles in life and at work. As McKinsey research shows, COVID-19 has motivated nearly two thirds of US employees to reflect on their purpose in life. And nearly half said that they are reconsidering the kind of work they do because of the pandemic. This also entails connecting their personal values to their careers.
Therefore, CEOs need to tread a fine line between fostering corporate values among employees and infringing on their sense of belonging to the company. Employees need a sense of control over their work lives and a sense of agency over their involvement in promoting company values. Organisations with those elements in their culture will find it much easier to engage employees on purpose. That is why at Provident we made volunteerism part of our “values hub” to engage employees in activities that they themselves perceive as being close to their own values, e.g. setting up libraries for children in hospitals, caring for animals in shelters or helping refugees.
Pixar Director Brad Bird once said that money is just rocket fuel, but that his goal is to “go somewhere”. The pandemic has created space for businesses to find new directions and purpose to create lasting, long-term value for shareholders. Companies themselves cannot change the world for the better, but they can lead the way on thinking about where and how we will find ourselves in the post-pandemic reality.
