70% of Spanish companies have a purpose

Madrid, July 8, 2021.- Nearly 70% of companies have a defined purpose. 84% of them are written and shared with employees and almost 9 out of 10 believe that they add value to the business and contribute to improving the company's profitability.

This is the main conclusion of the First Barometer on Business Purpose in Spain, prepared by APD and Transcendent, which analyzes the results of a survey conducted with almost 300 managers to understand the trends and challenges in the definition, activation, measurement and understanding of the value that the Purpose generates for companies and for their interest groups. Companies from more than 20 sectors participated in the survey.

Although Purpose is already very present in companies, according to this study, the degree of knowledge is still confusing. For 39% of respondents, Purpose is confused with the concepts of vision and mission.

What there isn't much doubt about is the perception of Purpose as an element of value for the company. 76% of respondents say that in their companies the Purpose is perceived as an element that impacts the business and that contributes to improving its profitability.

However, the perception that it facilitates access to finance is still in its infancy. Just 16% of respondents link Purpose to better funding.

“There is still work to be done for the Purpose to permeate all levels of the organization. There is a knowledge gap between Managers and Middle Managers compared to the category Other employees, the latter being those with the lowest knowledge of the definition,” explains Angel Pérez Agenjo, managing partner of Transcendent. 73% of managers say that they know it precisely, while that percentage drops to 52% in the case of employees.

One in four would change jobs even if they assumed a salary reduction

Nearly 8 out of 10 executives say they prefer to work in a Purposeful company. Of these, 52% state that they would change jobs to a Purposeful company on equal terms, and more than a quarter (27%) would be willing to change even assuming a salary reduction.

The attraction and retention of talent is becoming one of the aspects that is most driving the incorporation and activation of Purpose in companies.

The reinforcement of a solid company culture (91%) and the construction of a unique and differentiated brand (67%) are two issues that, according to this study, are also favored by the activation of the Purpose.

The challenge is measurement

84% of companies that have a Purpose have it written, shared and measured, while 16% of them do not have it formalized.

Of the 84% who do have it written, more than half (63%) state that their company's Purpose is written and known to employees and 49% that it is known to external agents.

However, there is still a long way to go in how the Purpose is communicated internally, integrated into decision-making and measured. In fact, just over a third of the respondents (34%) say that their company has defined indicators to measure it. Of these, half are companies with more than 1,000 employees.

The CEO and the Management Committee, responsible for the Purpose

Regarding the perception that managers have about who should lead the management of the Purpose, the conclusion is overwhelming. Managers are responsible for integrating the Purpose in Spanish companies. 72% of respondents highlight that, in their company, Management is responsible for integrating the Purpose into the company, which indicates that it is a strategic element.

All professional categories, regardless of the size of the company, agree that those responsible for integrating the Purpose into the company are the company's Management and Management Team.

This question shows how in Spanish companies the Purpose is perceived as a strategic and transversal element for the entire company, so that the responsibility for its integration lies with the Senior Managers and not with other departments.

This transversality is also demonstrated by the fact that 83% of the respondents have selected more than one department responsible for the definition and implementation of the Purpose in the company. According to 65% of the respondents, within the Management Committee of their company, achieving the Purpose is a strategic and fundamental objective for all and is taken into account in decision-making.

Even so, linking the managers' bonus to the degree of achievement of the Purpose is not yet a priority, since only 21% of Spanish companies say they have incorporated it.

Main Barriers to Purpose

58% say that, in their company, the greatest difficulty in activating the Purpose is the urgency of other internal matters. It does not seem, therefore, that the main difficulty in defining and activating the Purpose is the perception that the Purpose is not something strategic, necessary and transversal for the company, but rather a matter of prioritizing urgent everyday issues.

Almost half (45%) say that the biggest difficulty lies in the lack of standardized indicators. A challenge, without a doubt, to be solved. And only 17% believe that it is due to a lack of vision.

COVID has given relevance to Purpose for one in two

The relevance of the Purpose has increased significantly due to the COVID crisis and the planet's environmental problems. 53% of respondents agree with this statement because, according to Pérez Agenjo, “in this uncertain and changing scenario, companies have the opportunity to transform and Purpose prevails as the strategic element that allows companies to achieve their maximum potential”.

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