Recently, we have seen the idea of corporate purpose under fire. Companies are struggling to link their corporate actions and outcomes back to the higher good they state they are trying to achieve. Our observation is that many of the companies that are struggling with purpose simply do not have authentic ones. There is no “right” or “wrong” purpose, only the one you live by. Many businesses create “moral” purposes when the actions they do, and outcomes they have, are less than moral.
There is nothing wrong with that, these businesses are needed but communicating clearly and authentically, as opposed to smoke and mirrors tactics, will serve you better in the long run.
Let’s look at what three different movies can teach us about finding and creating purpose and how it should be applied.
Lights, camera… action!
Is your purpose the right “One”?
“It is purpose that created us, purpose that connects us, purpose that pulls us, that guides us, that drives us; it is purpose that defines, purpose that binds us”. Agent Smith, Men in Black.
Purpose needs to be the underlying objective that unifies all stakeholders. Something that the entire business can get behind and is aligned to the wider world. It is a powerful tool, that the FRC points out when applied authentically, can help businesses to focus and strengthen their strategy. Develop deeper connections with existing and prospective employees, boost innovation, protect long-term value and keep the company’s moral compass pointing true (whether that’s for a higher good or not).
When communicating purpose, companies should use it as a moral compass and navigational guide to frame how decisions are made and how the business operates. From a disclosure perspective, purpose requires higher levels of transparency by setting the context and being a common theme across the narrative.
Purpose can also change. When something material changes within the business either a new purpose will need to be found or the actions of the company re-evaluated. Whether this is the business model and strategy changing, leading to a new purpose, or actions needing to be realigned to an existing purpose, it is important that the two are clearly aligned.
An authentic purpose will also help you stand out. It is obvious when a company is using a purpose it doesn’t believe in to tick the box and its narrative will more than likely look like every other company. Much like Agent Smith.
Agent Smith, Men in Black
While the appeal of being a doctor, lawyer, and pilot all at once may seem appealing, you won’t be fooling anyone. Purpose is often interpreted as a positive thing, being “motivational, inspirational, a common glue between us” but that is not strictly true. A Forbes article reminds us that if you look at the criteria often set out by purpose pundits, the Mafia would tick all the boxes. The difference for companies is that the purpose is made positive or a “higher purpose” by being based on the right values. By living values that support the purpose, long-term stakeholder returns, and the provision of societal benefit, companies will create a more authentic organisation and story.
In terms of talking about purpose, it is important to walk a modest walk as opposed to talking a big talk. Companies that have an authentic purpose and can consistently deliver a clear message and performance towards it will be seen as more trusted than those who chose an overly elaborate purpose that is unrealistic and subsequently fail to deliver. Worse still, those who choose an inauthentic purpose to “tick a box” and then show no alignment to it.
Similarly, for outcomes companies should ask themselves “how do these metrics tell the story of our purpose?”. This should be done through both the use of relevant data and using previous years’ figures and targets to paint a picture the audience can follow.
Ultimately, Frank’s purpose in Catch Me If You Can is to be a master of deception. After using his talent to commit a swathe of crimes it catches up to him and he is caught by Carl. However, he still fulfils his purpose by joining forces with Carl at the FBI to solve forgeries. The message, even if your purpose isn’t obviously a “good” one, it’s best to play it authentically.
Carl Hanratty, Catch Me If You Can
Admittedly, this one was rather difficult to choose a movie for, but I’ve gone with another Tom Hanks film, Forrest Gump.
This one is not so much for the story itself, as framing those who set a company’s purpose as having an IQ of 75 might get me in trouble, but rather the way the story is told. The movie starts with the ending i.e., what is this whole thing about. From there, each “act” in the movie goes back to the ending before telling more of the story, and it’s this mechanism that companies should be using to show how their purpose is incorporated into the sections of the annual report or wider business activity.
The method of referencing back to the end (the purpose) to frame the acts is how companies should approach integrating their purpose into their reporting. If we think about key sections (e.g., strategy, risk, value creation model) of the annual report as a scene then it can become tiresome and forced to link back to purpose at the front and centre in every section. However, in these key pages, framing the key decisions, approaches and ways the business operates around purpose, and how these enable the purpose, is an easy and powerful link to make.
This also doesn’t mean that the “golden thread” for any given year should be purpose. It is advisable to write a story around growth, consolidation, transition or whatever the key theme is for the year but use the tool and lens of purpose to create a long-term story for the business.
Will your report be up for an Oscar or a Razzie?
As purpose continues to come under fire and upcoming trends ask more from companies in terms of linking to purpose, long-term objectives and outcomes, we expect companies to develop more authentic purposes that help them both tell their story and live it.