An ‘alarming’ number of businesses are continuing to operate with ‘shallow purpose promises’ and ‘bolt-on’ sustainability initiatives, despite over half of directors in a recent IoD survey believing that companies should have a social purpose to help solve problems in society, an expert has warned.
A recent survey of over 700 directors revealed that whilst 90% of businesses had a purpose, mission or vision, that guides themselves and their company, only half felt that companies should have a stated social purpose to help solve problems in society. 62% said they were for wider purposes than just profit, but 28% of directors still agreed that the sole purpose of the company is to make money and generate shareholder profits’.
The signs are certainly encouraging, but Neil Gaught, a strategic adviser and author of CORE: How A Single Organizing Idea Can Change Business For Good and CORE The Playbook: The Single Organizing Idea is urging leaders to push ‘beyond purpose’ if they want to create a truly sustainable business.
“9/10 businesses claimed to have a purpose in the survey, but the question is how many are really organised around it. There is a real danger that many of these businesses are simply creating shallow ‘purpose promises’ which will inevitably fail to result in real, sustainable, organisation-wide change. Treating CSR or ESG as a ‘nice to have’, a bolt-on afterthought or ‘social licence to operate’ is no longer going to cut it,” explains Neil.
Neil recalls when the 181 US Roundtable businesses declared in 2019 that each of them had a greater purpose than making money. The reaction was understandably cynical and predictably correct. “Almost all of those businesses have since been called out for not delivering on their ‘purpose promises’,” says Neil.
Neil is keen to remind leaders that whilst there are no shortcuts to progress and that changing for good is a significant undertaking, it’s entirely possible and doesn’t require a huge drain on time or resources. “It’s a challenge that has to be walked towards and will demand courage, collaboration, belief, empathy, commitment and, ultimately, leadership,” he says.
It’s clear that old-fashion top-down command and control style management won’t cut it either. Neil explains that what is required is open-minded leaders who understand their role as proactive facilitators capable of drawing on their personal sense of purpose to convenience, inspire and encourage those around them toward a bright future.
Transitioning and re-organising your entire business around sustainability is no doubt a daunting prospect, especially if you don’t know how to do it. But Neil is quick to reassure that it can be done and tried and tested tools, technologies and approaches developed over many years exist to ensure change is not only possible but practical.
“Change is deniable but inevitable. Those that grasp the nettle will not only ensure their business survives the coming decade but thrives in a new way that meets the needs, wants and desires of all stakeholders,” adds Neil.
*Survey from IoD