How do the firms we studied approach the challenge of measuring purpose? Lots of experimentation, as it turns out. As part of the Unilever Sustainable Living Plan, for instance, Unilever sets company-wide goals for performance and impact, but it also leaves specific impact targets for each brand to determine. “The unifier is top- and bottom-line growth,” said CEO Alan Jope, “and then each brand will have [a] metric that’s most important for its sustainable living purpose.”
Like any firm, Unilever has worked hard to strike the right balance. “To meet the targets set out in the Unilever Sustainable Living Plan, a no-metric world doesn’t help to focus the mind in a large organization,” CHRO Leena Nair told us. “You need some metrics.” But at the same time, Nair added, “it’s not all metrics. It’s a balance. The metrics can’t be all input, and they can’t be all outcome. There has to be a balance of both.” COO Nitin Paranjpe agreed. “I think there is a role for metrics,” he suggested, “but you need to leave them at a relatively high level to not lose sight of the big picture.”
Paranjpe was also clear that companies need to be open and honest about reporting both successes and shortcomings, and they should be prepared to adjust their expectations as they go. “This is a space where the intent that we are articulating is so big and broad, frankly, nobody knows exactly how you’re going to get to those outcomes,” said us, “especially when the technological opportunities and changing consumer patterns are evolving exponentially.” One former C-suite leader at Mastercard expressed a similar sentiment. “You can do quantitative analysis — and, believe me, everybody can do a lovely model,” this person told us. But when it comes to measuring whether a company is achieving its purpose-driven ambitions, “you have to have the right people who can actually step back and have a more differentiated, qualitative assessment of it.”
It may sound strange to hear EY talking about the importance of not measuring something. As one former EY leader told us, “We are accountants and consultants, and we measure everything that moves.” But, as they pointed out, when it comes to the purpose of building a better working world, the “micro-management of measures” can be immensely frustrating for employees.
Doing the right thing is the whole point, after all, and firms don’t need metrics or a business case for that. “None of these numbers are numbers,” a former leader at LinkedIn told us. “These are human beings with real stories.”
5. Don’t confuse purpose with CSR
CSR is old news. Purpose isn’t a side effort or an add-on.
Today’s most successful purpose-driven firms understand that purpose is not siloed into a single department, team, or person. Purpose is not philanthropy or corporate social responsibility (CSR). Purpose is a scalable, core part of the business, and it doesn’t have to compete for limited time and resources any more — or any less — than the rest of the business does.
The conviction that purpose is not CSR was one of the most common themes in our interviews. Unilever CEO Alan Jope described CSR as “a kind of bolt-on to our regular activities,” whereas the firm’s purpose is core to how the entire business operates. “Everything we do has to be really embedded in the business,” Jope said. Similarly, Royal DSM’s Feike Sijbesma told us, “I don’t believe in CSR in the official way of CSR. I think that it’s out.” A former senior leader at EY echoed these thoughts, saying that defining purpose “wasn’t about corporate responsibility. This was about what we do every day.”
In fact, as Keith Weed, former chief marketing officer at Unilever, who was also in charge of social and environmental sustainability, put it, CSR and philanthropy might even undermine purpose by creating a mentality that “if a group of people over there are doing good, [then] the rest of the company can carry on doing bad, because they’re the good guys negating others’ badness.” To that end, Weed closed down Unilever’s CSR department and mainstreamed sustainability across the company.
At Mastercard, purpose “is not about philanthropy alone. It is not about CSR alone,” said Michael Froman. “It is about getting the private sector to work on their business models so that it is in their economic interest to address these issues.” Shamina Singh, founder and president of Mastercard’s Center for Inclusive Growth, agreed, telling us that “we don’t talk about purpose as some sort of separate thing that happens outside of us. It’s the work we do every day.”
Purpose isn’t separate from company strategy, she added. “This social purpose fits into our business strategy.” These observations reinforce insights from Dr. Andrew White of the Oxford research team, who noted that “these conversations about purpose are transforming how we understand what a firm does, how the firm does it, and how those actions link to core decisions that shift the trajectory of the firm and, in some cases, an entire industry.”
To be clear, in business today there are important roles for CSR and corporate philanthropy, especially when these efforts are linked to what the sponsoring firms do every day. For example, the Mastercard Foundation supports Mastercard’s financial inclusion work through its Center for Inclusive Growth. Similarly, the LEGO Foundation is linked to LEGO through the research it does on education and child development. Meanwhile, Dan Gray, EY’s global corporate responsibility knowledge leader, told us he views EY Ripples not as a separate undertaking but rather as “a means to extend the value of our skills and experience to people and places we might not otherwise reach in our day-to-day business.”
Effective CSR efforts complement the foundational purpose that sits at the heart of organizational strategy. LinkedIn’s Meg Garlinghouse thinks companies increasingly understand this evolution from CSR to purpose. “I really do think purpose is going to become a norm,” she told us. “What I talk about is a future state where social impact teams cease to exist. Not because they matter less but because they matter more, and it becomes a mind shift rather than an initiative.”
6. Position purpose as a North Star, not a to-do list
Purpose empowers employees to anchor their work into what the company does.
While purpose-driven organizations make sure every employee can connect their work to the company’s purpose, they don’t demand that purpose be lived or experienced identically by each person. An effective purpose is specific enough to be relevant to what a company actually does, but broad enough that it encompasses the diverse roles and responsibilities that exist within the firm. Purpose is a “North Star,” in other words, reflecting the fact that while the “means” may evolve, the “end” remains constant.
Many interviewees used the same image to describe this delicate balance. “In the complex world we are faced with today, it is crucial to provide a constant North Star,” Julie Teigland told us. “Purpose offers that North Star.” As Bob Patton, EY’s Americas Vice Chair of Strategy, put it, “Purpose has to resonate at every level, from the C-suite to business units to teams. When it’s brought to life at the individual level — when each employee can find meaning in their work and see how it contributes to the organization’s purpose — that’s when you see purpose get real.”