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Returning to purpose

In the face of the current global pandemic, just as we as individuals have had to pause and reflect on what is important, corporations have a tremendous opportunity to rethink what is important and to rediscover why they exist, how they can continue to create value, including profit, in ways that are more harmonious with common human aspirations and the natural environment.

Indeed, as a corporate leader standing on the balcony, looking out into the near and distant future, you can sense that there is a need to change. Even if the corporation that you lead is not yet reeling from the global systemic changes underway, you sense that something must give. More of the same is unlikely to get us what we desire most.

The pandemic, the cries for social justice throughout the world, environmental crises, financial crises, the emerging brave new wild west transglobal world order being created by the internet and social media, indeed myriad crises have uncovered an inescapable truth.  It is that our current system of organizations like governments, the nation-state, NGOs and enlightened corporations that have an explicit responsibility to work for the common good, even collectively, cannot fix this.  We need a new plan. In this way, it should be increasingly clear to even the most jaded corporate leader that we are now “all in this together” and that something has to change to realize the possibility of “building back better”. Corporations need to be part of the solution.

We suggest that there is a clear, concise, and repeatable process that corporate leaders and those supporting corporate transformation (consultants, coaches and facilitators) can use to enable both a re-discovery of a corporation’s true intent and a redefinition of its identity. We need to integrate the familiar mission, vision and values elements of corporate life and connect them to the most foundational of notions: organizational “purpose”. Such a process provides much-needed clarity as to “how” the corporation could update, reinvent, and transform itself in response to these new and changing circumstances.

The rise of the modern corporation

Simply put, organizations, at their core, have always been designed to ultimately make one or more aspects of our lives “better.” Through organizations, we humans have sought to arrange and coordinate our activities in response to the challenges posed by our environment. One of the most successful and impactful forms of organization is the corporation.

Today, modern corporations have five core features: they are legal persons, liability is limited, contributors of capital have shares and are members of the organization, shares are transferable, and a governing body holds ultimate accountability and can delegate responsibilities (Kraakman et al., 2009). Together, these features enable corporations to amass large quantities of financial and other capital, which, in combination with sophisticated forms of administration, are turned into powerful commercial systems.

The dark side

It is widely accepted that as individuals, we behave in accordance with how we perceive ourselves and in concert with what we sense is our life’s purpose. Our purpose influences how we behave; it regulates our actions and determines the level of empathy we generate in our relationships. Our corporations, being constructed of and by people, are no different. When their perceived existence included a purpose that served society, it influenced how they behaved. This changed when their purpose became entwined and identified with the generation of profit for the sake of (more) profit.

The essential character of the corporation was reframed. The fundamental business that the corporation was thought to be in had changed. It was only at this point that, after almost 2000 years of the evolution of the corporation, that this form of organization no longer had to show a link to a purpose beyond commercial activity.

This unending drive focused on continuous growth and profit certainly had a long list of positive outcomes. It resulted in the rapid expansion of national economies and the growth of the global economic pie. Corporations, as such, have played a significant role in raising the standard of living billions of people not only through jobs but also through a wide range of philanthropic endeavours, which have positively impacted almost every area of our lives, not least of which are education and healthcare. Sounds like a good story, and one might be tempted to ask, “What’s the problem?” 

Purpose and possibility

The problem is that untethered from its original purpose, corporate leaders and intellectuals alike embraced the negative impacts of corporate activities and production as necessary costs of doing business to be managed or off-set by good (CSR) but not things that could or ought to be ultimately eliminated. Thus, the corporation veered increasingly into paths where it wreaked as much havoc on wellbeing as the good it was creating. Now far too many are focused on commercial activities missing the opportunities for the realization of their true purpose, which again is invariably connected to solving meaningful problems of people and planet in commercially viable ways (see Mayer & British Academy, 2020).

The recognition that all corporations, for better or for worse, whether they are conscious of it or not, have, in fact, a purpose and an impact on wellbeing is once again gaining sway. For almost 2000 years, there was a necessary and explicit link to the social impact of corporations. We are now at the point that we are not only linking commercial activities with a social impact but that corporations make their purpose the primary principle driving all their activities. Successful organizations will fulfil their purpose in profitable ways (see ISO 37000 and the Future of the Corporation project by the British Academy).

The elephant in the room is that today most leaders can articulate the customer/client benefits that drive their company’s existence but struggle to see beyond that and determine just exactly how these benefits could be related to more fundamental concepts, such as wellbeing. Indeed, why should the average CEO who is down in the trenches producing value for their customers and shareholders while minimizing any negative externalities from their company’s activities care?  

The future that we sense emerging is filled with hope and possibilities. It urgently requires our corporations to reimagine who they are, restate what their role might be and redefine their intended ultimate value, or impact on those they serve, those who serve them, as well as other relevant stakeholders and the natural environment. In other words, our corporations must reimagine and then realize their identity – the combined expression of vision, mission, values, and, importantly, purpose. Reimagining your purpose with wellbeing at its core can unlock unseen resources that can lead to new market opportunities, spur innovation and differentiation that will drive a growth in your business that is sustainable and empowers people.

This article is part of the "Purpose with Profit" Column and an earlier version was published in the business section of the Newsday (Trinidad & Tobago), Business Authority (Barbados). (Jamaica), and The Voice Newspaper (Saint Lucia) in January 2021.

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