Purpose Under Pressure

PURPOSE IN A VOLATILE LANDSCAPE: WILL IT WEATHER THE STORM?

In a world fraught with uncertainty and upheaval, Purpose can be the constant.

The past few years have taught businesses many hard lessons. Among them, that business leaders must expect the unexpected and no issue is off-limits for organizational response. Consumers have become increasingly skeptical of green and Purpose claims, while employees have choice – and aren’t afraid to use it. So much has changed during this time, but one thing has remained constant: the Power of Purpose.

We saw Purpose help brands navigate the waters of a global pandemic to do right by employees and communities. It provided guidance and guardrails for companies responding to stakeholder demands around social justice commitments and delivered organizational direction and ambition for companies to approach their ESG (environmental, social and governance) goals and strategies. It has even given organizations direction when reacting to heated political conversations and responses during times of war and global conflict. Now, Purpose proves to be a panacea for another major business challenge: The Great Resignation.

The events of recent years have given us a lot to think about. For employees, this has led to a rearrangement of priorities, a pursuit of a higher meaning in their work placing significant new demands on their employers. With that, employees have left their companies in droves to seek opportunities that better align with their values or create a new path very different than their previous one. This has created a retention sieve at companies – and a thorn in the side of recruiters across industries. Those who remain in their current roles realize their new worth and are not afraid to push their employers for more.

Where does Purpose fit in? Purpose Under Pressure examines business professionals across industries and levels to gauge their understanding of Purpose within their own organizations – and their personal adherence to it. This study unpacks the benefits of a strong Purpose during turbulent times, its value for recruitment and retention – as well as some early red flags for Purpose practitioners – and tools to embed Purpose within organizations for maximum benefit.

While Purpose continues to weather the storm, the stakes could not be higher. Purpose is under increased scrutiny from consumers, employees, activist investors and others – and companies must do more to ensure it is authentic, omnipresent and actionable.

Paul Polman: “Coronavirus is an acid test for stakeholder capitalism.”

BUILDING ON THE PURPOSE PARADOX

Purpose Under Pressure builds on findings from the Purpose Paradox, a 2020 study conducted by Carol Cone ON PURPOSE and The Harris Poll to explore the influence and impacts of Purpose in business-to-business (B2B) companies. The B2B Purpose Paradox uncovered a critical gap: while 86% of companies had a stated Purpose, only 24% of those had fully activated it in their organizations.

Purpose Under Pressure broadens our exploration of the divide between stated and activated Purpose, adding business-to-consumer (B2C) companies as well as welcoming global PR firm Allison+Partners and sister agency Headstand to the research team. Our hypothesis about the growing prominence of Purpose–influenced by the pandemic and its impact on employees–was borne out by this new research. We felt that as more organizations shift to being human-centered, they will need strong data and insights to leverage Purpose across the enterprise at various levels and functions.

Ultimately, the companies that “win” with Purpose will be those that leverage their “why” to inspire, engage, and protect their most powerful asset: their employees.

Defining purpose and ESG

PURPOSE: An organization’s aspirational reason for being, beyond profits — grounded in humanity.

ESG: Stands for a company's environmental, social and governance-related commitments, policies and programs. ESG is the manifestation and activation of the organization’s authentic Purpose.

We believe the most successful organizations have a well-defined and documented Purpose and an ESG strategy that drives positive outcomes for people and planet. While you can have a Purpose without an ESG activation strategy (and vice-versa), it takes both to drive organizational and societal impact.

Purpose can be critical to stability and retention during times of crisis

Purpose has proved to be a valuable corporate asset for employee retention during unsettled moments like the Great Resignation and the COVID-19 global health crisis. Indicators show more employees seek higher Purpose out of their work now than in previous times – and they view Purpose as an indicator of business performance and success that also helps protect organizations during challenging times.

91% of employees say their company’s Purpose makes them feel like they are in the right place as we weather ongoing challenges, such as the pandemic and economic risk.
88% say they truly believe companies focused on Purpose will be more successful compared with those who are not.
84% say the pandemic, economic uncertainty and social justice conversations of the past two years have made them think more about how their work can have a positive or negative impact on society.

How mature a company’s Purpose is perceived to be also has repercussions for employee retention – as employees who view their company’s Purpose efforts as mature are less likely to actively look for new roles. Companies whose employees believe they are at a mature phase of Purpose:

58% not looking for a new job
43% looking for a new job

PURPOSE UNLOCKS RECRUITMENT AND RETENTION

Purpose has become an important factor when employees seek new jobs or decide to stay in their current ones. It's no surprise elements such as compensation and work/life balance are critical considerations for employees related to job prospects, however a company's positive impact on society holds prominent standing as well. While 50% of business professionals rank work/life balance and 48% salary/compensation as the first or second most important elements when considering a new or current role, an organization's Purpose – knowing the company has a positive impact on society – is the next consideration ahead of culture and professional development.

Priorities

Importance of below factors when considering a new job or staying at a current one:

Ranked 1st or 2nd most important factor

50%

WORK/LIFE BALANCE

48%

SALARY/COMPENSATION

35%

COMPANY HAS A POSITIVE IMPACT ON SOCIETY

34%

COMPANY CULTURE

32%

PROFESSIONAL DEVELOPMENT

When looking at how these job priorities have shifted before the COVID-19 pandemic, salary/compensation and positive impact on society have equally increased in importance – rising 66% from pre-pandemic times. Further, companies that prioritize Purpose among employee experience have an advantage: more than 80% believe having "meaning" in their work is more important than ever, with a significant majority saying they will only work for Purpose-driven brands.

PANDEMIC EFFECT

Percentage more important now than before the pandemic:

EMPLOYEES STATE THEY:
86% believe having "meaning" in their work is more important to them than ever
84% will only work at Purpose-driven companies/brands
84% feel more empowered than in the past to use their work as a force for good

This data proves the value of helping every employee understand how Purpose is woven through their individual roles. This will not only help create deeper meaning for employee work, which feeds into gains in recruitment and retention, but will also allow organizations to better diffuse Purpose across the entire enterprise for performance and impact success.

PURPOSE HITS CORNER OFFICE, BUT NOT VIRTUAL “WATER COOLER”

C-suite and leadership have bought-into Purpose, but other employees still fail to see the evolution – and the value.

With stalwart business leaders like Larry Fink and Marc Pritchard espousing the value of Purpose, it’s no surprise executives see the myriad benefits of Purpose leadership and how it manifests within their own organizations. However, our research indicates a disconnect between leadership perspectives and manager/director viewpoints in several areas.

This divide, most prevalent at the manager level, is visible across several indicators, including importance of Purpose in talent and business success and perceived maturation stage.

Marc Pritchard: “…what consumers are now expecting is brands to do good for the world as well and to go beyond just providing a superior product. They want to know what your values are. Is it a diverse group of people behind this brand? Are you promoting equality of all types, whether it be gender or race, ethnicity, sexual or gender identity, ability, even age and religion? Are you walking the talk both with your own company and then with who you work with?”

MATURITY

Our Purpose efforts are more mature.*

GREATER FOCUS

My company is more focused on its Purpose now than before the pandemic.

PRIDE FOR EMPLOYEES

Efforts are a clear source of pride for employees.

MORE SUCCESSFUL

I believe that if my company was more focused on our Purpose we would be more successful.

HIRING PROCESS

Potential employees ask about our company’s Purpose during the hiring process.

*Respondents selected either “Our Purpose efforts are mature, systematically embedded across the company, and have influenced key elements of our operations including product innovation" OR "Our Purpose efforts are mature, systematically embedded across the company”

While Purpose is understood – and highly valued – at the senior executive levels of business, it fails to have the same effect at other levels within organizations.

Executives must take their own energy and enthusiasm for Purpose and better communicate the benefits and the need for accountability among individuals at all positions. Once an organizations’ Purpose is identified and a path for execution determined, managers and directors are best positioned to ensure Purpose lives and breathes throughout the organization. These individuals are most responsible for activating Purpose, embedding it in manager/mentor conversations, and setting specific KPIs that tie back to the long-term vision and near term performance goals.

PURPOSE APPEARS SILOED

At a functional level, Purpose is siloed, with strategy and marketing presenting barriers to company-wide adoption.

When looking at various departments, there are additional indicators of insufficient pull-through, especially among specific functions. While employees in human resources see the value and understand accountability to Purpose within their roles, individuals in marketing and strategy are less likely to apply this to their job responsibilities.

When asked if their company’s Purpose gives them meaning in their work, there are differences of upwards of 35 percentage points with 70% of employees in human resources strongly agreeing to this statement, but only 36% of marketers and 32% of strategists strongly agreeing. Employees in the strategy function are also the least likely to see how their work contributes to their company’s overall Purpose (38%). Less than two-fifths of employees in marketing (39%) and strategy (36%) strongly agree they are accountable to act in line with their company’s Purpose.

Percentage of employees in different functions who strongly agree:

CONTRIBUTION

I see how my work contributes to my company’s Purpose.

MEANING

Gives me meaning to my work

ACCOUNTABILITY

I feel accountable to act in line with my company’s Purpose

SOCIETY

Helps me see how my work helps society

This lack of understanding of how individual roles connect to a company’s Purpose is another indicator it is not optimized across organizations. Even more so, some of the most important functions that should be responsible for amplifying and executing that Purpose – strategy and marketing – are not fully sold or adopting this strategy for business growth and success.

As the stewards of the corporate reputation and brand value, marketers must truly understand the Purpose and ESG implications of their brands and recognize the value to consumers and their own colleagues. This means including a significant role for Purpose in marketing externally and in the employee value proposition internally. At the strategy level, functional leaders are key to how Purpose is woven into planning and decision-making, and therefore overall business and societal impact.

Purpose achieves its optimal performance when embedded deeply throughout an organization. Importantly, employees need to understand the linkage of their own work to their company’s Purpose, and how they are individually accountable to fulfill its promise. This emphasizes the critical nature of cross-functional teams to ensure Purpose reaches all corners of an organization. This helps individuals understand how it relates to their specific roles, and how teams and functions work together for optimization, measurement and continuous improvement of the stated Purpose.

The war for talent is solved by a strong Purpose and sold-in by senior leaders and human resources.

With the highest levels of Purpose enthusiasm and adoption found in the corner office and in human resource management, leaders in these areas should use their positions to better influence and drive other functions and levels for Purpose activation.

FOR C-SUITE

Ensure Purpose is present and consistent throughout all employee communications as a compelling reason why the organization exists and a critical guide for all decision making.
Impress that Purpose must be “lived” by every member of the organization – it knows no hierarchy or walls.
Share stories of “Purpose success” happening across the organization as impacts to be celebrated company-wide and key in internal communications.

FOR HR

Build Purpose deeply into the employee value proposition, recruitment materials and into onboarding processes.
Enable a constant purpose “pulse” throughout organizational culture.
Ensure all roles can link to the organization’s purpose and its significant role in company vision, growth and their responsibility to contribute to it.
Embed Purpose into job descriptions, KPIs and performance reviews for all levels.
Identify and activate Purpose ambassadors across the organization.

EMPLOYEES SEEK PROGRESS, NOT PLATITUDES

While employees give senior leadership high marks for Purpose progress, they believe more work must be done.

When asked how Purpose manifests within their own organizations, employees across the board felt executives were pulling their weight – with high marks for internal and external communication and taking actions consistent with the company’s Purpose. Yet, and indicative of the lack of pull-through from top to bottom, employees feel there’s more work to do.

Nearly 90% of employees said companies would be well-advised to double down on Purpose, and only 53% of staff said their company’s Purpose was mature*. In terms of actionable items to move Purpose forward, employees stated companies need to embed Purpose more deeply (77%), behave in ways more aligned with its Purpose (75%) and better define the company Purpose (68%).

*The study defined Mature as “Our Purpose efforts are mature, systemically embedded across the company, and have influenced key elements of operations including product innovation” or “Our Purpose efforts are mature and systematically embedded across the company”

SENIOR LEADERSHIP SCORECARD

88%

88% of employees say senior leadership at their company clearly communicates with external stakeholders about their company’s Purpose beyond profit.

87%

87% say senior leadership at my company clearly communicates with employees about their company’s Purpose beyond profit.

85%

85% believe senior leadership at their company takes action consistent with their Purpose.

86% of employees say, overall, companies would be well-advised to double down on Purpose these days.
77% say their company needs to embed its Purpose more deeply.
75% say their company needs to behave in ways more in line with its Purpose.
68% say their company needs to better define its Purpose.
53% believe their Purpose is mature, only 7% say it’s in the early stages.

Clearly, employees understand the value of a strong and deeply embedded Purpose, and they want to see and hear more of the tangible impact of Purpose within their own companies. And while they believe executives are doing a good job acting and communicating in alignment with the company Purpose, we again see indicators it hasn’t been widely adopted across organizations. The key for executives is unlocking a sense of Purpose in every function, every level and most importantly, in every individual role.

Purpose maturity is achieved when the activated Purpose becomes un-siloed. It cannot live in a department, title or level. To achieve its authentic and full potential, organizational Purpose should become a cross-functional and top-down/bottom-up commitment. It has a home from R & D, to innovation to supply chain sourcing and relationships, to operations especially manufacturing to community engagement. It becomes a lens through which key decisions are made and becomes embedded in processes, trainings and ultimately the DNA of the organization. Employees see it, hear it, feel it – and understand how they are contributors to its success and accountable for upholding it.

ACTIVATING PURPOSE AMBASSADORS

Purpose cannot become fully embedded until employees embrace it...

When it comes to Purpose, opportunity clearly remains on the table. This lack of understanding of how individual roles connect to a company’s Purpose is another indicator it is not optimized across organizations. Even more so, some of the most important functions that should be responsible for amplifying and executing that Purpose – strategy and marketing – are not fully sold or adopting this strategy for business growth and success. Importantly, employees need to understand the linkage of their own work to their company’s Purpose, and how they are individually accountable to fulfill its promise. When asked the actions companies can take moving forward, respondents cited helping employees understand how the corporate Purpose aligns with individual values (51%) and involving employees more (45%) as the foremost priorities.

Further, organizations more mature in their Purpose journey also correlated to a higher confidence level from employees when the corporate Purpose is authentic and embedded throughout the organization. Authenticity is inextricably linked to employee perception – and involvement – in corporate Purpose. As the lifeblood of organizations, it is imperative to bring Purpose to life that connects with employees’ values and roles.

How confident do each of the following make you feel about that a company's commitment to its purpose is truly authentic?

EMPLOYEE PARTICIPATION

INTERNAL PROGRAMS

HOMEPAGE STATEMENT

PURPOSE IN MEETINGS

PURPOSE IN DECISIONS

FINANCIAL INVESTMENT

HOW TO ACTIVATE PURPOSE?

With 84% of employees saying they will only work at Purpose-driven companies. it is imperative to authentically bring that to life.

Help employees link personal values to the organization’s “Why”

C-Suite should partner with HR leadership to create programming that identifies personal Purpose and aligns personal values to the organization’s Purpose

Identify enterprise ambassadors who will accelerate Purpose activation – these are the early adopters who see its potential for personal satisfaction, culture development and business growth

Align historical ESG efforts with cultural context to ignite personal satisfaction and employee potential

Unlocking Purpose

Over the past few years, Purpose has been pressure-tested. While Purpose has protected many companies, giving them clear guiding principles, we’ve also seen companies collapse due to inauthentic, performative and ornamental activations – which consumers, employees and media are quick to call out. Increasing expectations paired with growing skepticism from stakeholders across the spectrum means companies must double-down on genuine Purpose with corresponding ESG action, all reinforced by clear and consistent communications.

While the case for Purpose maturation is clear, this report reveals a major disconnect. Employees want their employers to commit to a deeper activation of Purpose – rather than simply a stated one. And for many, they won’t work for a company that doesn’t have a strong Purpose. Yet at the same time, companies struggle internally on adoption and action. The bottom line is, many employees simply fail to feel Purpose.

So, what’s next? Companies must revisit Purpose – ensuring it’s tied closely to stakeholder needs and backed by robust ESG goals and programs that lead to impact. Companies should ensure it is embedded into its culture, values and brand bedrock – and used as a strategic decision-making filter and guidepost. And to actualize this, it’s time to engage employees early and often, re-write job descriptions, identify and encourage ambassadors and increase communication at all levels.

When done well, Purpose creates the consistency, connection and community employees and other stakeholders seek – especially during uncertain times. Companies that unlock Purpose pull-through will be rewarded by healthy recruitment and retention, better brand loyalists, increased performance and impact and a future-proofed organization for today and tomorrow.

Larry Fink: “Purpose is not the sole pursuit of profits but the animating force for achieving them.”

METHODOLOGY

The research was conducted online in the United States by The Harris Poll as a collaborative effort between Allison+Partners, Headstand, Carol Cone ON PURPOSE and The Harris Poll among 352 B2B and B2C Business Professionals. All qualified respondents held a title of Manager or higher, worked at a company with at least 100 employees, and represented companies in sectors, including financial insurance, healthcare and allied industries, manufacturing, professional services, technology and telecommunications, consumer packaged goods and other, with base sizes within each sector ranging from 25 – 66 respondents. Within the research, Purpose was defined to respondents as: a company’s reason for being in addition to profits that guides its business growth and positive impact on society. The survey was conducted Feb. 15 – March 8, 2022.

Raw data were not weighted and are therefore only representative of the individuals who completed the survey.

Respondents for this survey were selected from among those who have agreed to participate in our surveys. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. Fr this study, the sample data is accurate to within + 5.2 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest.

For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].