Purpose: Shifting from why to how
Only 7 percent of Fortune 500 CEOs believe their companies should “mainly focus on making profits and not be distracted by social goals.”1 And with good reason. While shareholder capitalism has catalyzed enormous progress, it also has struggled to address deeply vexing issues such as climate change and income inequality—or, looking forward, the employment implications of artificial intelligence.
But where do we go from here? How do we deliver a sense of purpose across a wide range of environmental, social, and governance (ESG) priorities? Doing so means moving from business as usual to a less traveled path that may feel like “painting outside the lines.” Are we going too far beyond our core mandate? Does it mean we’ll lose focus on bottom-line results? Will transparency expose painful tensions better left unexamined? Will our boards, management teams, employees, and stakeholders want to follow us, or will they think we have “lost the plot”? There are no easy answers to these questions; corporate engagement is messy, and pitfalls, including criticism from skeptical stakeholders, abound.
Yet when companies fully leverage their scale to benefit society, the impact can be extraordinary. The power of purpose is evident as the world fights the urgent threat of the COVID-19 pandemic, with a number of companies doubling down on their purpose, at the very time stakeholders need it the most (for more, see “Demonstrating corporate purpose in the time of coronavirus”). Business also has an opportunity, and an obligation, to engage on the urgent needs of our planet, where waiting for governments and nongovernmental organizations to act on their own through traditional means such as regulation and community engagement carries risk.
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