(As originally published in FEI Canada F.A.R. member e-newsletter, August 2017)
The ROI on purpose
By: Caroline Herault, associate partner in EY Canada’s Performance Improvement practice
What’s your company’s purpose? Recent and ongoing changes in the economic landscape have prompted many organizations to rethink the how and why of their business. And according to a recent EY Beacon Institute study, business leaders recognize purpose and profit go hand in hand – those that are integrating purpose right into their corporate DNA are seeing real business success.
Purpose means different things to different companies – some focus on shareholders, some on employees and others on customers. But it’s those who take a more holistic, human-centered and socially-engaged concept of purpose who see the tangible benefits.
What do I mean by that? Well, this new purpose challenges the traditional, single-stakeholder approach and focuses on creating meaningful workplaces for employees, inspiring brands for customers, and sustainable practices for society.
In a time where change often seems to be the only constant, clearly defining your purpose will help provide a long-term vision to empower the organization to navigate the unknown. To be successful, it needs to be embedded into everything you do. Here are some ways to turn purpose rhetoric into reality:
- Articulate: Define a clear purpose for your organization, before others do it for you. It should respond to the needs of all stakeholders and align with what your business does. Remember to be ambitious and inspiring, yet still grounded with the reality of what you’re able to deliver.
- Embed: Develop an integrated plan of action to embed your purpose into your strategy and operations – and vice versa, align your decision making with that of your purpose. This plan should be the guiding star for closing the gap between what the company says and what the company does.
- Accelerate: Delegate ownership to the champions in your business. Have senior leadership demonstrate their commitment through words and actions, and have your employees act in the interest of your purpose.
- Evaluate: Measure the extent to which purpose both governs and impacts strategic decisions and daily actions. It doesn’t happen overnight, so be sure to take note of setbacks while acknowledging successes.
It may seem like a lot of work, but it pays off. The EY Beacon Institute study finds 97% of companies that deeply integrate purpose into their DNA report a good or great deal of added value from doing so. The benefits are short- and long-term, and come in all shapes and sizes. From customer loyalty, to preservation of brand value and reputation, to the ability to attract and retain staff and develop new and innovative products – it goes without saying, better performance translates to better profits.
Having a clear purpose allows companies to be more agile, and respond quickly and effectively when opportunities and threats arise. Organizations that have a clearly defined and integrated purpose also offer better value for investors, customers and, quite frankly, all stakeholders.
Business leaders looking to survive and thrive amid disruption and uncertainty: it’s time to make purpose a priority.