Clarity of purpose, said EY Global Chairman and CEO Mark A. Weinberger, can help leaders cut through the “clouds” that surrounded the gathering at Davos. “If you’re in the meetings that I’m in, there are a lot of discussions around uncertainty and the fact that we’re in difficult, cloudy times: whether it is geopolitical issues or issues like income and equality,” he said. “But today, this is an optimistic meeting, and I hope that purpose is going to help us cut through these clouds.”
Weinberger participated in a fireside chat with Infosys Executive Vice Chairman Dr. Vishal Sikka, who recounted his personal story leading Infosys through transformation, using a shared sense of purpose as a foundation for creating an innovation-driven organization. His experiences provided a powerful glimpse into the impact transformation is having on all Infosys employees.
Highlights from Mark Weinberger’s fireside chat with Dr. Vishal Sikka
The breakfast was seeded with insights from a unique, first-of-its-kind global study, Navigating with Purpose. Completed in January (to be fully released in April 2017), the research involved more than 1,400 executives across 10 countries and 12 industries.
As she previewed some of the results from this study during her remarks, Valerie Keller, Global Leader, EY Beacon Institute, said that visionary companies see purpose as a source of resilience and a strategic counterweight to volatility and uncertainty.
The research revealed a strong consensus among respondents, with a majority saying that disruption is driving them to rethink the purpose of their organizations. Keller also reminded the participants that they have the potential to extend the impact of the breakfast gathering “through the employees, customers and suppliers that you touch” and help others understand that the concept of purpose goes beyond creating value for shareholders.
The roundtable discussions were at the heart of this event, in which this unique group of global leaders exchanged perspectives and ideas on the challenge of turning the rhetoric of purpose into reality. Read on to learn about the key takeaways that emerged from these conversations.
“Increasingly, what we have done is that we have integrated purpose into the reward system and integrated some metrics that are more purpose focused and long-term driven so this is visible as well for the management teams.”
Executive Vice President Nestlé S.A.,
Head of Zone Americas
Thriving with purpose in a volatile and uncertain world
Technological, societal and generational forces are all driving rapid transformation and uncertainty. Political and economic shifts are likewise underway as concerns mount about the unintended consequences and unequal benefits of globalization. At the same time, many of the leaders and firms who have scaled the heights and succeeded in the existing system are experiencing a growing sense of unease that their position is eroding beneath them.
Purpose can serve as a means to navigate this challenging environment, but not all purposes are created equal. A narrowly defined view of the world, with companies acting solely to benefit shareholders, is losing favor to a more inclusive view. Increasingly, companies see that it’s in their long-term interest to create value for a wider set of stakeholders. This “big P” conception of purpose informs a long-term view and drives performance-led profits, not just short-term gains.
“Let’s not waste a crisis …”
Businesses face growing expectations and pressures, especially as they try to expand the role they play in addressing today’s challenges. The current economic, social and geopolitical environment requires that organizations need to move forward and embrace purpose as a way to maximize external as well as internal benefits. This disruptive environment acts as a “burning platform” that creates a strong sense of urgency to embed purpose deeply and throughout the organization.
Participants recognize that some companies can readily define their purpose for societal benefit, e.g., an airplane manufacturer advocating safety in flight has a fairly clear-cut proposition. There was also a consensus that it may be easier for family-led companies to instill a purpose. All organizations can find and act upon purpose as well, however, and this volatile, uncertain environment offers a galvanizing opportunity for businesses to embed a more inclusive purpose within the fabric of their organizations.
“The big disconnect is sometimes saying you want to do something and not rewarding that. So people look in an organization not to what you say but to what you do. That means your compensation, your reward systems, it means the daily actions need to be aligned.”
Willis Towers Watson
The race is on to move from rhetoric to reality
Research into purpose shows that it starts at the top – but leaders need to walk the talk – and fast. Several participants made the analogy of politicians failing to deliver on political promises. If businesses fail to deliver on their purpose, or fail to deliver fast enough, it results in dissatisfied employees and customers.
Articulating purpose throughout the organization is merely the start. Purpose must be action-oriented. As one (ex-army) participant put it, make the outcome part of the message: “In order to …. “ This immediately takes it from rhetoric to a message to be acted on.
There needs to be rapid progress to demonstrate value for individual employees, for customers and other stakeholders. Without it, credibility, particularly that of the CEO, is at stake.
Many of those at the breakfast validated the finding from Beacon’s research that a purpose “journey” has a timeline: if leaders aren’t putting the rhetoric into reality and actively transforming their organizations, the result can be a dip in engagement and performance. Setting the pace for integration and performance is critical. Daily actions and strategy must be connected to your purpose, and measurement and reward systems have to be designed to do that.
“Many of us in the room are on this journey. We’re only in the soil - we’re not in the roots yet. It takes a long time to get there.”
Mark A. Weinberger
EY Global Chairman and CEO
There was a clear consensus that “it all starts at the top” and that leaders need to be out in front on the purpose journey. Yet, this also creates a disconnect because “if you are only doing things at the top” then purpose would not be embedded throughout the organization. Senior leadership action is essential, but it is not sufficient on its own.
Middle management represents a critical layer in driving purpose throughout the organization. Leaders need to communicate openly and often their purpose and to connect it to their organization’s strategy, but it may be difficult for this to resonate with rank and file employees. By acting as the bridge between senior leaders’ messages and enthusiastic young talent, middle management has a key role to play in making these words a reality. But they need tangible steps, as well as performance and incentive systems to move this forward. Infosys, for example, made projects its basic unit of focus and gave project managers ownership over those projects, along with the metrics and rewards necessary to connect purpose to performance.
Moving forward with purpose
To be sure, businesses need to address the current environment with a sense of urgency. The burning platform is real. But it’s also important to recognize that the world is in transition and the new operating models are still being defined. In many ways, organizations need to recognize that they should not focus on their final destination, which may be unknown, but make sure they are taking the right steps toward embracing purpose as a guide for their journey.
Members of the Beacon community play a special role as pioneers on this journey, not only helping their own organizations take those first steps but also serving as exemplars to others who are starting their own journey.
No one is really sure of the new challenges business will face in 2017, but as long as we continue to be guided by an inclusive purpose, and to drive that into how our businesses operate, we will be better prepared to meet those challenges head on.
Executive Vice President, Americas
Member of the Supervisory Board
Deutsche Bank AG
John J. Haley
Willis Towers Watson
President & CEO
GE Oil & Gas
Executive Vice President and Chief Financial Officer
Sir Andrew Witty