Finding Corporate Purpose

Many company leaders no longer view shareholder return as the only measure of success. It’s a new outlook on corporate purpose that is giving companies a competitive advantage.

Once upon a time, a corporation’s purpose was simple and clear: Produce quality products, make a profit and, if the corporation is publicly traded, pay dividends
to shareholders.

Now, leaders are building a purpose around people and planet in addition to profit. These three bottom lines gauge value via impacts other than financial success. Leaders with this viewpoint are considering employment practices, ethics, sustainability and service to local communities, as well as broader goals such as ending
poverty and hunger or supporting clean water and improved sanitation.

The World Economic Forum wants companies to influence not only the future of consumption, but also the future of mobility. The United Nations Global Compact (UNGC) has 17 distinct goals for businesses. As the concept of corporate purpose broadens, some might be tempted to ask whether it’s worth the work, and, even if it is, how to achieve corporate purpose with the same measurability that a company typically applies to a marketing campaign or a product launch.

Steve Swavely firmly believes that corporate purpose is worth the work. “It’s becoming an expectation that companies have a purpose beyond making a profit,” said Swavely, a senior vice president and corporate consulting manager at Truist Leadership Institute. “The companies that have a purpose will gain community support, which will help when companies need to make changes that require support from those communities. Your purpose must be genuine and not just exist at the top of the house. The authenticity of purpose must be driven down deep into an organization.”

Corporate purpose improves employee engagement

The concept of corporate purpose has many different names. Some call it corporate social responsibility. Others prefer terms like shared-value capitalism, conscious capitalism, compassionate capitalism and inclusive capitalism. Numerous groups are measuring its impact and effectiveness, from the UNGC to Chief Executives for Corporate Purpose^®, which was started by the late actor and entrepreneur Paul Newman.

While there are many reasons to champion corporate purpose, Swavely believes the decision to do so comes down to three key points:

The community now expects it from businesses in their footprint.
Corporate purpose benefits employees.
It produces results that make shareholders smile.

“One of the things that science has taught us is that a positive belief, such as that contained within a corporate purpose, held in the mind and focused upon, has a very significant impact on the brain,” said Swavely, who has a Ph.D. in neuropsychology from Georgia State University. “It boosts the limbic system, which supports the creation of positive emotions. It broadens the brain’s attentional system. People will see opportunities that they had previously missed because they were in threat response. And, finally, it prepares the brain for problem-solving. It activates the parts of the brain that are involved with abstract reasoning and decision-making.”

Indeed, numerous studies have found a clear line from corporate purpose to employee engagement to profit. In its 2018 Global Talent Trends study, the global benefits consulting firm Mercer found that 75% of employees who consider themselves to be thriving at work say their company has a strong sense of purpose that resonates with their personal values. A 2013 Gallup survey found that companies with the highest levels of employee engagement were 22% more profitable and 21% more productive than those with low levels of engagement. Willis Towers Watson found that companies with high levels of employee engagement have operating margins up to three times higher than companies at the opposite end of the engagement spectrum.

Understand your purpose to create your impact

Words in a statement are nice, but to produce an impact, they must be turned into action. That’s where leadership and leadership development training come in.

“We help our clients identify and build on their purpose,” said Swavely. “We help them to understand how that purpose aligns with their organization’s vision and values.

“The mission is what you do; the vision is what you want to be; the values are how you want to be; and the purpose is the why,” Swavely notes. “As the psychologist Viktor Frankl once said, quoting the philosopher Friedrich Nietzsche, ‘He who has a why to live for can bear almost any how.’ We have to have a why that is bigger than
making a dollar.”

Swavely notes that some entities are focused solely on revenue and creating shareholder value, while others are focused on charitable giving. Purpose, though, isn’t all one or the other.

“What we’re seeing is that you have to be somewhere in the middle of those two extremes. You have to balance shareholder value with something that is greater. The profit you generate is the fuel you need to deliver on your purpose. Doing so creates tension – and a need for great leadership.”

That’s where Truist Leadership Institute comes in, able to help leaders deliver on the purpose of their organizations. The goal is to get beyond books and online articles to a living, authentic understanding of purpose, which Swavely believes results from learning to listen.

Ask questions and seek input

“Leaders love to tell people what to do, but that is not leadership,” Swavely said. “Great leadership is about listening, asking questions and getting input from your team. I tell leaders that you get to drive the bus, but you need to listen to your people and get input from them. Make them part of the process instead of just telling them how to be.”

One key question he encourages leaders to ask their employees: “If you had input into our corporate purpose, what suggestions would you make?”

Swavely noted that executives must have confidence in their leadership skills to ask those types of questions. “If you are practicing the proper ways of how to be,” he said, “you will know how to ask those questions, take in the answers and see how they can be adopted.”

The key is to not be defensive. “I tell my clients to be genuinely curious about what your people are thinking,” Swavely said. “You need to learn what has created their perceptions. The more curious you are about what your people are thinking, the more respected you become as the leader of your team. And that helps when you have
to have tough discussions – your team will give you much more leeway.”

Create a cohort of conscious leaders

Swavely believes that for there to be complete engagement with a corporate purpose, the understanding of what that purpose is must reach deep down into an organization. Senior leaders, as well as the next generation of leaders, must be trained in change management. And these leaders must continue to identify more employees to be trained in leadership. This is true not only at companies, but for all the educational leaders being guided by the Truist Leadership Institute.

The fees paid by corporate clients make it possible for the leaders of educational institutions to receive leadership development and other training from Truist Leadership Institute. To date, more than 900 school principals have received leadership training. Truist Leadership Institute has also provided training to more than 7,000 student leaders at colleges and universities within the Truist bank footprint. “This is often the first exposure to leadership that some of these college students are getting,” Swavely said.

Truist’s own corporate purpose is to make the world a better place. Truist believes having a corporate purpose is vital not only for a business’s soul but also for its long-term performance. It believes the executives who participate in Truist Leadership Institute’s programs are helping to make the world a better place by being more
thoughtful citizens.

“Scientific research says there are things going on in your employees’ brains when you help them embrace a corporate purpose,” Swavely said. “They pay better attention to quality and customer service, and all of that contributes to the bottom line. There’s a direct relationship between a solid corporate purpose and the level of engagement of that organization.”

“The companies that don’t have a corporate purpose,” he adds, “will be at a competitive disadvantage as we move into the next decades of the corporate world.”

For more information on the Mastering Leadership Dynamics^TM program from the Truist Leadership Institute, click here.