ITL #40 The Power of Purpose: why corporate storytelling must evolve in this era of radical transparency

10 years, 5 months ago


Research among global companies underlines the fact that the key to survival lies in identifying and communicating corporate purpose. By Daniel Rolle.

Corporate leaders are experiencing a moment of collective soul searching as they consider and plot the route for their brands and organisations. They do so at a time when the central objectives of communication, reputation and trust, have shifted shape, perhaps irrevocably. 
A shift from vertical, top down authority to horizontal, peer-to-peer power structures – brought about by major global events and a quantum leap in access to technology – has forged a new social contract between traditional sources of authority and newly empowered consumers and opinion formers.
Digital and social media platforms have played a crucial role in this shift; and as such, the citizen-consumer has perhaps never played a more active role in the formation of policy, business objectives, corporate governance structures and public engagement strategies.
As Burson-Marsteller’s recently released Power of Purpose report outlines, the key to survival in this potentially hostile environment is acting and behaving in a way that is consistent to, and aligned with, a clearly defined Corporate Purpose – the central reason for the organisation’s existence and corporate activity. 
Our study carried out in collaboration with IMD, the leading international business school, shows that Communications Directors across all sectors share that outlook. 
Communications Directors from the world’s leading companies – including Danone, Ford, McDonalds, Shell, Unilever and Johnson & Johnson – interviewed as part of the study, articulated a clear and resounding perspective: companies that have identified and communicated their Purpose first to their employees, then to wider audiences, are better placed to weather the storms that come their way – be those leadership change, major shifts in consumer opinion or challenges to their reputation.
As one of the contributors to the B-M report argued: "There is more need than ever for companies to explain why they are here, why they are doing things, and explain the rationale and context."
Corporate Purpose thus becomes a central driver of corporate and organisational strategy at a time of highly unpredictable, unstoppable change.
From 9/11 to the Arab Spring, from Wikipedia to Wikileaks, from Lehman to Libor, power and authority have been brought into question by an upheaval in the way people across the globe consume and engage with information.
The transition to a chaotic, crowd sourced, always on and at times amoral digital age has taken its toll on corporate organisations, governments and individuals.
The reality is that the communications industry stands at a crossroads with the model of storytelling that it has traditionally engaged with.  This model has been utterly transformed by technological advances. It has been warped by a voracious 24/7 news agenda, fed by Twitter feeds, open sourced data and the citizen/social journalist. The street corner newspaper seller has been replaced by the prolific blogger who uses a smart phone as a hotspot to broadcast multichannel content to billions across the globe.
At the launch of our research earlier this month, our keynote speaker Jean Oelwang, CEO of Virgin Unite said: "The power of brands is in the hands of people. We´re in a mode of radical transparency right now." 
The transparency demanded of companies in the contemporary corporate environment means that there is an absolute imperative to align communications and actions. Whilst there is a risk associated with explicitly communicating corporate purpose externally, the risk associated with not doing so is considered to be far greater.  One of the participants in our study puts this very clearly: [There is] "more danger associated with a lack of transparency than with too much."
It is in this fertile space that the importance of Corporate Purpose emerges; a place where progressive Chief Executives and Communications Directors are driving a focus on a return to first principles – to the why – as a means to communicate innovations, actions and interventions that influence change.
Defining Purpose
As we outline in our study, Corporate Purpose is like good leadership – hard to define, but obvious when a company possesses one. We define Purpose as a central, guiding principle, underlying decisions, creating a central and clearly identifiable narrative – whilst defining and guiding the impact those decisions have on the environment and society. 
As one of the Communications Directors interviewed as part of the Burson-Marsteller report noted,  "Everything that we do comes out of the analysis of the community around us and how what we do can be something more. It’s our added value."
Indeed, in her foreword to the B-M Power of Purpose report, Aileen Ionescu-Somers, a Director at the IMD Global Center for Sustainability Leadership argues that "companies are fundamentally social institutions, playing – as other stakeholders do – their own explicit and defined role within society."
Companies with a strong and clearly articulated Corporate Purpose find it easier to engage with employees, business partners and the myriad audiences that shape external perception of the brand; stakeholders ultimately understand not only what the company does, but also the core principles guiding that work. 
Moreover, as the executives interviewed as part of the study outlined, a clearly defined Purposeful communications strategy helps build trust and combat consumer concerns about big business that have become commonplace in the wake of banking scandals, corporate tax revelations and allegations over poor governance structures and  corporate behaviour.
Purpose also builds competitive advantage. Studies carried out by Burson-Marsteller’s research partner, IMD, shows that a strong and well communicated Corporate Purpose can impact financial performance by up to 17%. 
This demonstrates a clear argument for investment in Corporate Purpose for the benefit of tangible and profitable financial return, enabling the company to invest in people, culture, service diversification and innovations.
Purpose at the heart of strategy
But as our survey of leading communications directors demonstrated, Corporate Purpose transcends a transactional reading of corporate affairs, going beyond return on investment and shareholder value to imbue every business decision with an overarching vision – the standard against which all decisions are validated.
When we first started to carry out research into Corporate Purpose in 2008, we were inspired by PepsiCo CEO Indra Nooyi’s "Performance with a Purpose."  This is based on the belief that "companies can – and must – achieve business and financial success while also leaving a lasting and positive imprint on society."
We thus arrive at a Purpose Imperative – an ethics of corporate affairs, which dictates the social duty that responsible, engaged organisations must embrace as they expand in domestic and global markets. It is this ethics that must guide both action and communications. Companies and their communicators must therefore both "walk the talk" as well as "talk the walk".
The business relevance of the finitude of global resources has historically been covered by a fanfare of corporate sustainability initiatives – much of which have been written off by sceptical stakeholders as ‘greenwash.’
In the view of the interviewees in B-M’s study, a company’s Corporate Purpose has often evolved from Corporate Social Responsibility and sustainability, but has now become a distinct concept in itself, dictating and driving programmes that fall under the traditional CSR remit.
One executive interviewed by B-M outlined the evolution: "Sustainability is part of Corporate Purpose, but not the whole of it. We focus on keeping our operations as sustainable as possible, but Corporate Purpose has a bigger role."
Corporate Purpose: a framework for leadership
One aspect that emerged clearly from our study is that leaders must be the galvanisers of an organisation: setting both the culture and strategy. 
Indeed, if a corporate culture is strongly established internally, it naturally permeates into external perceptions of the organisations. As our report outlines, numerous organisations have defined their Corporate Purpose following the appointment of a new CEO, allowing them to establish their vision and make their mark on the company. This is particularly the case, we argue, in organisations where leadership change results from, or follows, a business issue or crisis that has resulted in adverse publicity for that organisation.
By defining the character of a company, Corporate Purpose serves as a unifying point across the organisation. Corporate Purpose cuts across departments; it becomes not a bolt-on but is a central element of the business, supporting what the company does and guiding its future direction.
In the words of one communications executive interviewed as part of the B-M study, a strategic focus on ensuring that Purpose is reflective of internal priorities, and effectively communicated throughout the organisation, "creates a global team, provides a global strategy and a global knowledge base."
To enable an organisation to navigate a hostile world of potentially hazardous change in an aligned and strategic way, companies can follow a three-step framework to develop and communicate Corporate Purpose. This is more fully outlined in our report.
The future of Purpose
As one participant told us: "Mega-change will make Corporate Purpose ever more important."
Demands for companies to be good corporate citizens, calls for greater transparency, and digital campaigns against organisations of all sizes will increasingly characterise corporate life.
In the words of Geoff McDonald, Global VP of HR at Unilever, participant in our study and panellist at our launch: "We no longer have a choice... consumers in the future are going to want to consume and engage with products, companies and services that they really trust and that they think are going to make the world a better place."
In order to demonstrate they are fulfilling their societal obligations, companies will need to find ways to measure and evidence their success, or indeed failure, in delivering on their Corporate Purpose and be transparent in how they share that information – particularly through digital channels.
Organisations that invest in Purpose as an organisational imperative that has significant external and internal gain will find themselves able to connect with stakeholders, consumers and engaged publics in a way that will engage them and drive positive comment and opinion around their vision – and will ultimately have a real term benefit on the bottom line.
And companies that connect and engage with the power of Purpose will ultimately drive mega-change, harnessing the productive power of the Purpose Imperative to create new products and services that have significant social and financial equity, building trust and creating advocates – and lead, not reactively manage their reputational legacy.
In the concluding and inspiring words of Jean Oelwang, CEO of Virgin Unite at the launch event for The Power of Purpose study: "This is the biggest opportunity of our lifetime. If we can really creatively come together with Government, not-for-profit and business and come up with innovative approaches, we can make this world a dramatically better place."
Thought Leader Profile
Daniel Rolle is a Senior Associate in Burson-Marsteller’s London-based Corporate & Crisis practice, where he advises multinational organisations and foreign government clients on global media and stakeholder relations. Daniel is a regular contributor to the Huffington Post, and writes on corporate and foreign affairs.

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The Author

Daniel Rolle

Daniel Rolle is a Senior Associate in Burson-Marsteller’s London-based Corporate & Crisis practice, where he advises multinational organisations and foreign government clients on global media and stakeholder relations.

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