The idea that companies should focus solely on products and profits is losing ground. Employees—and external audiences—are increasingly demanding a deeper ethic.
It’s a trend you see everywhere: organizations taking stands on issues that go beyond shareholder value.
Companies are redefining their organizational purpose to include stances on societal issues and the challenge of diversity and inclusion.
Why risk branching out beyond the spreadsheets? Because employees, customers and other stakeholders are increasingly insisting on it, experts say. And they want a real commitment, not lip service.
“Employees are really demanding integrity from their companies,” says Kim Clark, a consultant who formerly headed communications at GoDaddy.
Newer generations of employees want their work to have greater meaning, and not simply where they clock in. “They want to see that they’re making a positive impact in their communities, that they are demonstrating purposeful behavior beyond the working day,” says Rosy McGillan, executive vice president and head of purpose practice at Porter Novelli.
Organizations with strong corporate purpose and diversity and inclusion programs tend to perform better, attract and retain strong talent—particularly among millennials—and have more engaged teams that benefit from positive, diverse workplace environments.
There is data to support this. The rewards of meeting such expectations and building trust are great, the 2019 Edelman Trust Barometer reports. Employees who trust their employer are more engaged, loyal and committed—and far more likely to advocate for the organization—than their counterparts who are more cynical about their employers.
“Employees are ready and willing to trust their employers, but the trust must be earned through more than ‘business as usual,’” Edelman states. “Employees’ expectation that prospective employers will join them in taking action on societal issues (67%) is nearly as high as their expectations of personal empowerment (74%) and job opportunity (80%).”
A global study by PwC in 2018 revealed that 70% of workers want to work for an organization with a “powerful social conscience,” up five percentage points from just three years earlier. Current and prospective employees prefer to work for employers driven by purpose, the study suggests.
As a hot economy has given employees more choices, they are looking for meaningful work. Purpose and communicating a broader social mission can provide a competitive edge in attracting new talent while also helping to retain employees, says Aimee George Leary, senior vice president and global talent officer at Booz Allen Hamilton, a global technology and management consulting firm.
It is a talent marketplace in which employees with high-demand skills can go anywhere, she adds. What will make a company stand out, she says, is to “create a place where people want to be, where they feel that their purpose and values are aligned to the mission of the organization.”
Considering internal opinions
At GoDaddy, the purpose statement, “Shifting the GDP towards small business,” is inclusive, emphasizing its work with a diverse range of organizations worldwide, Clark says.
It’s important to take a purposeful stance—and live up to it—because organizations that don’t do so risk a scolding by their own workforce on social media and elsewhere, she says.
“Employees are now calling their own companies out very publicly around, ‘This is mixed messaging,’” says Clark, who is an affiliate consultant with Ragan Consulting Group. “‘You say that we are this thing, but in practicality we are not doing those things.’”
How to do that? Begin by exploring your intent—your purpose—as an organization. What is your vision? Look at that aspect “from the perspective of not only where you want to be, but what is the face that you can own as a leader or as a business, and then making sure there’s a business case for it,” McGillan says.
Organizations must find ways to take a stand that are consistent with their mission, experts say. Hewlett Packard Enterprise created its Living Progress plan to provide employees with tools, resources and best practices to accelerate the company’s “culture of sustainability,” such as pursuing a goal of drawing 50% of its electricity consumption from renewables by 2025.
Many companies are stepping into controversial areas where they once hesitated to tread.
In the wake of mass shootings last year, both Walmart and Dick’s Sporting Goods took stands limiting gun and ammunition sales, with Dick’s destroying $5 million worth of semiautomatic rifles. Nike nixed its new Betsy Ross flag sneaker after Colin Kaepernick, a high-profile face of the company, called the symbol offensive.
What about issues about which employees might disagree? McGillan says organizations should consider employee sentiment when determining whether to take a stand on an issue. However, Porter Novelli’s research shows that employees—especially millennials and Gen Z—believe it’s important for brands to stand for something, and they will do the research to make sure an organization’s actions reflect its values.
“Action or inaction both convey something to stakeholders in today’s environment,” she says. “At Porter Novelli, for example, we don’t expect that everyone will always agree, but our values guide us to make sure that in all cases, we respect each other’s perspectives. A key is to explain to employees the ‘why’ behind the decision.”
Many companies avow a commitment to diversity in their purpose statements and communications, yet don’t live up to that, Clark says. It’s important not just to advocate inclusiveness, but to live according to such values in hiring, designing products for the disabled, and marketing and communicating to diverse audiences.
“If you have a purpose statement that is really compelling and it assumes inclusivity, you have to follow through with the practices to deliver on that promise and on that purpose,” Clark says. “That’s where the employees are going to believe you. Employees are going to trust you.”
This article is in partnership with 3BL Media.
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