Publication The Courage of their Convictions – how purposeful companies can prosper in an uncertain world

Executive Summary

This report builds on conversations with, and insights from, over twenty companies who think it important to have a purpose beyond profit. Some of them are insurgents, taking advantage of the new opportunities that technology and global markets offer. Some have proved their resilience over decades or centuries.

There is abundant research evidence which tells us that the most successful companies over decades have been those with a clear and enduring purpose that combines financial success with outcomes that are important to human beings and the society in which they live. But what of the future? Companies are facing rapid change and great uncertainty. This turbulence is especially felt in their workplace relationships. Recent Gallup global engagement survey results show that employee engagement levels remain consistently low. This is disappointing and it appears to be linked to the failure of companies to deal effectively with new challenges and opportunities. These include the pace and disruptive effects of the digital world, threats and opportunities in the changing labour market, and short-termism and volatility from social, political religious and environmental forces. We wanted to explore the relationship between constancy of company purpose and the increasing inconstancy of the surrounding world. How could companies so rooted in purpose be sufficiently fast on their feet?

The examples described in this report demonstrate the greater resilience of companies which have a focus on purpose beyond profit and relationships permeated by clear values. A firm and enduring purpose beyond profit is, more than ever, the precondition for true agility in an age of uncertainty. Companies live or die by their relationships. The strength of those relationships is shaped by the decisions that leaders take about purpose and values. Companies with a purpose beyond profit enjoy four potential advantages in the face of change and uncertainty.

• First, their purpose and values become a source of energy and commitment in workplace relationships enabling them to attract and retain talent and engage and develop their own people better.
• Secondly, a clear purpose which people can naturally identify as a keel, gives stability and resilience. Strong values provide a clear basis for building trust.
• Thirdly, the benefits in terms of trust yield a reputational return, enhancing brands and accumulating external trust and goodwill. The licence to operate is enhanced.
• Fourth, as a result of the first three benefits there is a more compelling case to take to those investors who are interested in long-term performance. This in turn provides a basis for building greater investor confidence which is in turn a further source of stability.

There is also the potential for wider benefits to employees and society, in terms of well-being and health, including mental health, the chance to learn and adapt, and the way such companies cut across divides and bring together different parts of society around a shared purpose.

There are five stages which, in one way or another, the organisations we studied go through as they build from a strong purpose to a more agile and enduring organisation. First, they define the purpose in a way that gives the company real personality and makes the connection between the head, the heart, and the gut. Next, they bring it to life in the way that they communicate it. Thirdly, they imbue the purpose and values into the culture and behaviours of the company. The fourth stage is about the way companies encourage – rewarding, recognising and reinforcing the right behaviours, and thereby celebrating and further embedding the purpose and values. Finally, there is measurement and review – checking, auditing, revisiting and being open to feedback to avoid complacency.

The true energy generated by a living purpose flows across and between these different stages and permeates the relationships and processes of the business to the benefit of the bottom line. There is, of course, no scientific proof that this will count for so much in the future. Indeed, leadership has always been about doing the right thing long before you can prove that it will pay off. It’s called having the courage of your convictions.