Caring About the Game

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Caring About the Game

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American Express Foundation President Timothy J. McClimon discusses how purpose helps winning companies in this week's CSR Now! https://lnkd.in/dqEJU8E
Tuesday, February 6, 2018 - 6:20pm

“It seems to be easier to win the game when you care about the game.” 

The morning after the Super Bowl seems an appropriate time to write about the game, but it’s not actually the game of football that I’m interested in.  It’s the game of business and what it takes to win in 2018.

A recent Harvard Business Review Analytic Services Report entitled “The Business Case for Purpose” asserts that purpose-driven companies make more money, have more engaged employees and loyal customers, and are better at innovation and transformational change. The study defined organizational purpose as “an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society.”

“There is an increasing awareness that the purpose of a company has to be beyond shareholder value, and that it is not something that will cost your business but something that will enhance your business,” said Michael Beer, director of the Center for Higher Ambition Leadership at Harvard Business School.

In fact, according to this report, which was supported by the EY Beacon Institute, there was near unanimity with the corporate executives surveyed about the value of purpose in driving performance, but less than half of the executives said their company had actually articulated a strong sense of purpose and used it as a way to make decisions and strengthen innovation.  Only a few companies appear to have actually embedded their purpose to a point where they have reaped its full potential.

Companies who have not fully developed a purpose-driven strategy cited a number of barriers including short-term shareholder pressure, systems and infrastructure that are not aligned with long-term purpose, and the lack of performance targets and incentives aligned with purpose.

But, 89 percent of executives said a strong sense of collective purpose drives employee satisfaction; 84 percent said that it can affect an organization’s ability to transform; 81 percent said that it delivers higher quality products and services; and 80 percent said that it helps increase customer loyalty.

The report found that most companies fall into three categories with respect to purpose: prioritizers (companies that already have a clearly articulated and understood purpose -- 39 percent); developers (companies that do not yet have a clearly articulated purpose but are working to develop one – 48 percent); and laggards (companies that have not yet begun to develop or even think about purpose – 13 percent). 

Professor Beer calls this an “inside-out strategy” rather than an “outside-in one”: “You don’t just look at where the opportunities are and where you could make a lot of money as a way to decide where you ought to be.  You decide where you want to be strategically, based on what you want to do,” he said.   

“Organizations do better when everyone is rowing in the same direction,” one senior leader told the survey.  “A well-integrated, shared purpose casts that direction.  Without the shared purpose, organizations tend to run in circles, never making forward progress but always rehashing the same discussions.”

But, purpose isn’t just a well-oiled business strategy – it’s an aspirational reason for being that provides a call to action and a benefit to society.  In short, caring about the game and the impact of the game on employees, customers and communities. 

If you have a question or comment, please follow me on Twitter at @timmcclimon and start a conversation there. Thanks for reading and sharing this blog posting with friends and colleagues.

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