Business Fights Poverty is currently asking: “How can we embed Purpose authentically into business.” But what can this look like in practice, and where do we go from here?
First, the Purpose has to be worth embedding! In other words, it has to be inspiring and convincingly explain how the business creates value for itself and simultaneously for society.
Equally important, the culture of the organisation: “The way we do things around here”, needs to bring the Purpose alive. Readers will surely be familiar with the aphorism that “culture eats strategy for breakfast.” Well, Purpose goes hungry without culture!
So, whilst a good strategy is also vital to give effect to Purpose, culture determines how successfully Purpose is embedded and strategy is implemented.
As the Wates Report on “Corporate Governance Principles For Large Private Companies” for the UK’s Financial Reporting Council (FRC) concluded in December 2018:
“A healthy culture is critical to the company’s competitive advantage, and vital to the creation and protection of long-term value. Culture can be defined as a combination of the values, attitudes and behaviours manifested by a company in its operations and relationships with its stakeholders. The board, shareholders and management must make and maintain a commitment to embedding the desired culture throughout the organisation.”
Chris Coulter, Mark Lee and I argue in our book: ‘All In: The Future of Business Leadership,’ that there are four important dimensions of a positive and sustainable culture.
Readers won’t be surprised that since I chair the Institute of Business Ethics, ethics and responsibility are the first dimension. Individual employees and the organisation as a whole, need to take responsibility for their social, environmental and economic impacts; but ethics should not be just about compliance and rules. Rather, businesses should embrace the “Golden Rule” of the great religions and philosophical traditions of the world: “Do unto others, as you would have them do to you.” It should be about fairness and decency in behaviour and dealings with others.
In a positive and sustainable culture, there will be training and encouragement and mechanisms for “Speaking Up” both to call out bad behaviour, but also to recognise and praise good behaviour.
Another dimension of a strong culture is openness and transparency. This means providing evidence of performance and information on impacts to build trust, and to use “the disinfectant of publicity” to reinforce good behaviour. It is also about being humble and being courageous enough to show vulnerability: to admit that the organisation does not have all the answers. This means showing a willingness to partner with others to solve problems that the organisation is facing. These may be a technology the organisation lacks or a deficit business model or insufficient capacity.
A positive culture successfully blends top-down: clear Purpose, strategy and strong leadership to deliver these, together with bottom-up: encouragement to individual employees to take the initiative and make things happen. In some cases, this may produce social intrapreneurs, as I have argued previously for Business Fights Poverty: Why Going All in for Sustainability Makes It More Likely a Business Will Encourage Its Intrapreneurs.
This may be the result of deliberate programmes to nurture intrapreneurial activity, through “Dragon’s Den” style competitions, training programmes and mentoring.
Such an organisational culture is engaging and empowering of employees. As Daniel Pink told us in that remarkable book ‘Drive’, about what motivates people, what gets people out of bed in the morning: “It’s about autonomy, the desire to steer your own ship; it’s about mastery: the ability to be able to steer that ship well; and it’s about purpose, knowing that your journey has some wider, broader meaning.”. This is reinforced through incentive schemes to reinforce desired behaviours.
Significantly, State Street Global Advisors, the world’s third-largest asset manager, is calling on boards this year to review their company cultures and explain their alignment with its strategy. They have written to the independent chairs or lead independent directors of more than 1,100 companies in the S&P 500, FTSE350, and equivalent indices in Australia, France, Germany and Japan.
Given the spread and extent of change that every business now faces, a sustainable culture will also emphasise innovation – and creating the conditions in which innovation occurs naturally and frequently. Innovation will be about sustainability: because sustainability requires innovation.
David Grayson is co-author with Chris Coulter and Mark Lee of “All In: The Future of Business Leadership” www.AllInBook.net He chairs the Institute of Business Ethics and is Emeritus Professor of Corporate Responsibility at Cranfield School of Management, UK. He is a member of the Circle of Advisers of Business Fights Poverty.
www.DavidGrayson.net Twitter: @DavidGrayson_
Editor’s Note:
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