Posturing or management commitment?
Although 70% of companies have a defined Business Purpose, there is still much to be done. Establishing a Purpose measurement system , the challenges ahead include assessing achievement, sharing it across the organisation and incorporating it as a management tool, including as part of variable remuneration.
A lot has happened in the last 16 months that has changed us all. And business is no exception. The Purpose that drives them already seemed an important concept before the pandemic. But now, more than half of managers believe that Purpose is more relevant because of the COVID crisis and the planet's environmental problems. This is one of the findings of the first Barometer of Business Purpose in Spain, which we have carried out APD y Transcendent.
But what is Purpose? How is it activated?, How is it measured and who should lead it? Although we know that companies are moving in the direction of becoming sustainable from the business itself, we wanted to bring down to earth what is really happening with this survey of almost 300 managers.
The results are sobering. 70% of companies claim to have a defined Purpose. 84% of them have it written down and shared with employees and almost 9 out of 10 believe it adds value to the business and contributes to improving the company's profitability.
It is therefore widely perceived that the Purpose is profitable for the company. However, 40% of respondents confuse the Purpose with the vision and mission.
The Purpose is the "what for" of a company, its reason for existing.The aim is not just to make money, but to do so by contributing to solving a social or environmental problem at the heart of its activity.
Defining and activating the Purpose must be a rigorous exercise that involves measuring its degree of achievement with appropriate indicators. This is why the Business Purpose in Spain is not, nor should it be, simply a slogan or a marketing claim.
We prefer to work in companies with Purpose
Does Purpose generate employee engagement? Definitely, yes. 80% of executives prefer to work for a company with Purpose and one in four would be willing to change jobs, even at a reduction in salary. Purpose is becoming a powerful tool for attracting and retaining talent.
Another of the most revealing findings was that for 9 out of 10 respondents, Purpose contributes to establishing a company culture. Purpose is perceived not only as a strategic business lever but also as a tool that reinforces the company culture.
And who should lead this transformation? The response is unambiguous. For 72% of the respondents, the management team is responsible for integrating the Purpose.
The barometer also sheds light on the changes taking place. In 2017 only 25% of IBEX companies had a defined Purpose oriented towards the common good, and today there are already 77%.
Consumers, investors, employees, and leaders themselves increasingly value a company having an activated Purpose.
But there is still a long way to go. Establishing a measurement system to assess its degree of achievement, sharing it with the entire organisation, incorporating it as a management tool, even as part of variable remuneration, and having a legal figure for purpose-driven companies are some of the challenges ahead.
Some companies are already taking it seriously and others are still communicating it in a way that seems more posturing than real commitment.
Used well, Purpose is an accelerator of the business impact journey that all companies are embarking on.