For over 50 years, corporate social responsibility (CSR) has been used by businesses to address their ethical and philanthropic responsibilities in society. Traditionally, companies demonstrated their CSR commitments by offering their employees volunteer time, and by deploying some financial resources to worthy causes through sponsorships and charitable donations.
Recently, however, the debate over corporate social responsibility has been reignited – or reinvigorated – thanks to a letter to shareholders from one of the world’s most influential investors, Larry Fink, CEO of BlackRock. Fink’s message: to achieve their full potential, public and private companies need to do more than simply give of their time and money; they need to find more innovative and impactful ways to contribute to solving the broader challenges in society.
Increasingly, a new generation of professionals is also asking more of their employers. They are looking for workplaces and leadership that demonstrate their values and act upon them. They expect more than charitable donations and employee volunteerism from their employers. They want to work in places that engage more effectively with customers, employees, investors and other key stakeholders around their larger social purpose.
Companies are being asked to better integrate their business goals with their public purpose. Recognizing that government can no longer solve societal issues alone, the public is also increasingly looking to the private sector for support.
The challenge for businesses now is how to do more while also recognizing their financial obligations to shareholders. How do you lead effectively with “Purposeful Engagement”?
“Leading and engaging with purpose is a whole new way of doing business.”
Taking CSR to a new level, Purposeful Engagement leads to a different way of operating that’s more impactful – for your business as well as for society. Here are the key elements to consider integrating into this new operating strategy:
- Articulate a Larger Purpose. Consider the larger contributions your business is making to society. How is your work making the world a better place? Why is your work important? What is your mission? Starbucks is a company that did this effectively. CEO Howard Schultz described their larger purpose in this way: “Coffee is what we sell as a product, but it’s not the business we’re in. We’re in the people business.” Steve Jobs, the legendary CEO who built Apple, often talked about the company’s larger mission of making high quality computers available to everyone. Each built iconic companies based on a larger mission that engendered strong affinity and engagement from their key stakeholders.
- Align Business Goals with Social Purpose. An institution’s larger social purpose should be the guiding principle for all its work. It should be designed and implemented in a way that is integral to business success. Every employee should be engaged with your larger mission. Measurements should be developed for every department and business line. Without alignment, corporate mission can be easily sidelined.
- Integrate Resources to Maximize Impact. Typically, key resources devoted to social responsibility efforts have been siloed in different departments, often with very little coordination. Human Resources deploys employees to volunteer, marketing manages branding through sponsorships and advertising, charitable giving departments give funds to nonprofits, and communications works to get press coverage on these numerous efforts. Many other business lines and departments could bring added value if engaged in efforts to promote your larger social purpose. Without a larger strategy that integrates all these resources, companies are spending considerable funds, but aren’t having nearly the impact they could.
- Build a Diverse and Inclusive Team. Do your leadership team and Board of Directors truly reflect 21st century society? Do you have women and people of color well-represented across all levels of your organization? Diversity and inclusion are essential to business success. A McKinsey study showed companies with higher-diversity leadership teams and Boards have 30% more success than those that don’t. Their findings demonstrated a direct correlation between racial and ethnic diversity and better financial performance.
- Understand the Future Workforce. Millennials will make up over 50% of the workforce by 2020, according to PwC. Values and purpose are priorities for them. Often before they ask about salary, millennials want to know what their employers stand for. They want to work with – and support – companies that do more than just make money. Purposeful Engagement is vital for attracting and retaining the next generation of leaders.
Leading and engaging with purpose is a whole new way of doing business. It requires a less transactional and more relationship-based approach. Purposeful Engagement rallies all key stakeholders – internally and externally – around contributing to the greater good. Successful companies of today and of the future will embrace the idea of Purposeful Engagement as an avenue for achieving greater business success, attracting and retaining high performing talent, and building affinity and legacy for its institution, all while helping to make the world a better place.