Purpose; corporate revolution or corporate bandwagon?

Purpose:
Revolution or Bandwagon?
“This is fantastic stuff – I wish I could have been there” Academic
“Compelling” C Suite, Global Multinational
“Very useful and thought-provoking” Head, International Charity
“Fantastically insightful. A must read” Entrepreneur

purpose doesn’t exist
in corporate
organisations- it’s
just a branding
exercise; it’s a fad’
“ “
Purpose gives you
permission to play in
completely new, massive
markets in the future’
“ “
‘No public business will
willingly make a decision
that means it will make
less money ’
“ “

© Contexis 2016
Contexis House of St Barnabas Debates are a unique forum for
Leaders of global corporates, financial institutions and international
consultancy and advisory firms to meet with charity heads and
inspiring entrepreneurs to discuss, under a strict Chatham House
rule, the critical business issues of the day; to exchange
knowledge, expertise and ideas from widely differing perspectives.
None of this would be possible without the contribution of a wide
range of exceptional organisations and we are grateful for their
time, candour and insight. A small number of Contributors were
represented in the debate whose output you are about to read.
Nothing that follows is attributable to any one organisation.
If you would like to join a Debate we are always open to interesting
and challenging new Contributors. I’d welcome an email or tweet.
John Rosling
Chief Executive
jrosling@contexis.com
@jrosling

© Contexis 2016
to discuss this question…
Under a strict Chatham House rule,
we brought together Leaders of
• Some of the largest corporations on the planet
• Global Banks
• International Consultancies
• Leading Charities
• And top entrepreneurs

“Purpose: corporate
revolution or corporate
bandwagon?”
© Contexis 2016
Purpose
Introduction
What needs to change?
What’s driving the need?
Purpose: commercial return
What’s stopping us?
How should we change?
Responsibility?
Conclusion

What they said was quite remarkable..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
What needs to change
Responsibility?
Conclusion
Whether leading a global bank or an international
charity, almost everyone recognised that the current
model was serving neither companies nor society.
A shift to a more purpose-led model was the only way
forward.

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
But no-one was getting this right yet.
Purpose does exist but it is mainly forgotten.
90% of our senior directors don’t know what
our purpose is
consultancy
“ “

© Contexis 2016
“A shift to a more purpose-led model
was the only way forward..”
So what’s driving this remarkable idea?
Bankers, global corporations and charities agreed
that the world has got somewhat out of balance.
We just couldn’t agree how much..
Purpose
Introduction
Responsibility?
Conclusion

The Charity View
© Contexis 2016
““Public companies only seem to have one constituency and
that is investors. We have lost sight of the interests of other
stakeholders. Investor greed is damaging to broader society.
We are driving off a cliff
Purpose
Introduction
Responsibility?
Conclusion

The Banking View
© Contexis 2016
“
“When we lose sight of
purpose bad things happen.
Banks made poor decisions
because there was no
purpose bigger than the
narrow current interests of
the organisation.
“Banks serve society; without
them we are all subsistence
farmers. Yet banks lost their
sense of purpose and that had a
dramatic, long-term impact on
their asset value. Share prices
are still 20% of what they were
““I think we need to change the parameters. It is no longer fair. It is not
sustainable. We need to create a society that has better values. The
challenge is how
“
Purpose
Introduction
Responsibility?
Conclusion

The Corporate View
© Contexis 2016
““Business is an organ of society; therefore it has to
be cognizant of its impact on society
“
“‘There has been a mood to change away
from just making money. In the last
century it was all about scale; we made
stuff and that made money. Now the
whole thing has flipped; the customer is
the most important aspect of the mix. That
is why purpose has come up on the
agenda’.
Purpose
Introduction
Responsibility?
Conclusion

So, this group of business and third sector
leaders agree that the primary purpose of
business cannot just be to maximize profit.
All businesses must become purpose-led.
What’s the return from being genuinely
purpose-led?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

It turns out it’s surprisingly commercial..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

Purpose saves a lot of time in
organisations..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

Purpose creates management clarity
and velocity..
© Contexis 2016
‘We still talk about corporate responsibility.
Purpose is far more fundamental than that.
It’s the basis of all decision making’.
Purpose
Introduction
Responsibility?
Conclusion

Purpose drives financial performance..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

..and sustains growth..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

Purpose creates engagement..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

Great, so what’s stopping us?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Our Strategy..
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Our leadership..
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Our commitment to change..
Purpose
Introduction
Responsibility?
Conclusion

No-one is pretending this is easy..
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
‘There is a dishonesty here. It’s all very well for a
business in the sweet spot where social good doesn’t
adversely affect the bottom line. Businesses don’t go
beyond that sweet spot and that’s not good enough’.
charity
“
“

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
We have a license from society but it’s challenging
to strike a balance between short-term
performance and long-term sustainability’
corporate
“ “

So let’s be specific.
How should organisations change?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
‘You have to view profit as the outcome of
getting other things right’.
‘It’s not about P&L; it’s
about the balance sheet;
building the assets of the
business, not short-term
profit’
“
“
‘The primary purpose of a public
business is to make money; private
business has more choice. But in
either case, the question is what we
mean by money; short-term profit or
long-term value? That is where the
ambiguity can lie’.
.
“
“

and if we don’t..?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion ‘So many old corporate
organisations have no clearly
defined purpose or reason to
exist. Inevitably they go bust’
banker
“
“
‘What is possible can be
radically different. If we fixate
on the public company model
you get a skewed view; this is
the old model. The life
expectancy of plc is only 15
years now. There are so
many new kinds of model
emerging.’
charity
“
“
‘There are clues out there; we
are at the start of a genuine
shift in the way capital works’
banker
“
“

so, whose responsibility is this…?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
‘The Board must take responsibility for purpose. The Board
as an entity has a tenure far longer than individual members
and much longer than the tenure of the C suite’ banker
“ “

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
The perception of all the Leaders
was that their consumers would
not take responsibility for change.
And yet, 58% of consumers will
make purchase decisions on the
broader social good.
And this percentage is even higher
in developing and ‘newer’
economies

and what of the role of investors…?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
The critical role of investors was acknowledged. The
beliefs around investor motivation varied widely..
‘Are institutional investors changing? There is plenty of
evidence of investors making more value-based and
longer term decisions’ charity
“ “

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
Short-termism was acknowledged as the killer
problem
‘For individuals, we really need to reframe what we
mean by ‘reward’; rewards can be doing the right
thing, a sense of pride in where you work, looking
your kids in the eye. It’s not just money.’
“ “

And how important is having a clear sense
of personal purpose for leaders…?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion
The collective view: “Critical..”
‘You can only be effective if you know why
you are doing something’
“ “

So in summary, what have we
heard from this wildly
different group of corporate
leaders, top bankers,
entrepreneurs and charity
heads?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Societal changes means that business must
change to survive.
Only genuinely purpose-led are likely to
survive – and certainly thrive in the future.
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
When business loses sight of purpose bad
things happen- and in a transparent world
that’s fatal.
There is a multiplicity of emerging business
models; the old corporate is an endangered
breed.
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
Purpose isn’t just about social responsibility; it
drives clarity, velocity, engagement and growth
in a volatile and ambiguous world.
Purpose is survival.
If it’s a bandwagon it will be a short ride!
Purpose
Introduction
Responsibility?
Conclusion

So, what is required to genuinely
implement a purpose-led strategy?
© Contexis 2016
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
1. Absolute authenticity; green-wash won’t
wash
2. Sustained and courageous leadership from
Boards in support of C-Suite
3. Absolute integration into strategy – or
forget it
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
4. A more holistic view of corporate return than
short-term profit.
5. Individual managers need a broader
understanding of ‘reward’ to include self worth
6. Business must find a way to benefit a
broader range of stakeholders; the rewards
must be more equitably shared.
Purpose
Introduction
Responsibility?
Conclusion

© Contexis 2016
7. Business Leaders, government & investors
share a responsibility.
8. Businesses shouldn’t assume their customers
are as narrowly self-interested as they think
they are.
9. And, most uncomfortably, a far deeper
personal awareness amongst leaders
Purpose
Introduction
Responsibility?
Conclusion

Join in?
“As human beings we are hard-wired to seek a bigger purpose in
organisations we choose to spend time in”.
Twitter: @contexis
Linkedin: Join the Purpose in Business Movement
Attend our next Roundtable: hello@contexis.com
Get inspired: www.contexis.com/insights

© Contexis 2016
With grateful
thanks to all our
regular and
occasional
contributors
John Rosling
Chief Executive
jrosling@contexis.com
@jrosling

Purpose; corporate revolution or corporate bandwagon?

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