Build Organizational Purpose Into Your Talent Systems
There's been so much heartbreak since the pandemic began and last summer's social justice movements began in earnest.
But there have also been inspiring stories of people and companies contributing to the common good. GM and Ford built ventilators and other medical supplies. Clothing manufacturers, such as Ferrara and Merrow, shifted to making personal protective equipment for front-line workers. Adidas pledged to fill at least 30% of all open jobs with black and Latinx candidates and Facebook pledged to double the number of black and Latinx employees by 2023.
The list goes on, and that is heartwarming. Yet as we look to get back to a more stable normal we have to ask: Will this focus on corporate “goodness” remain?
There is a strong chance it will. Despite the fact that it may seem like a recent fad, a focus on broader stakeholders has been happening for years. It was epitomized by a statement from the Business Roundtable in August 2019, redefining the purpose of a corporation from a narrow focus on shareholders to a broader focus on all stakeholders, including customers, employees, suppliers and communities. Signed by 181 CEOs at major corporations, this statement publicly reinforced something that was already occurring and gave cover to other leaders considering moving in that direction.
That was before the COVID-19 pandemic and the social justice movements of 2020. Americans increasingly view corporate action in response to events – especially by CEOs – to be critical. The January 2021 Edelman Trust Barometer showed:
- 68% of Americans expect CEOs to step in when the government does not fix societal problems.
- 66% of Americans believe CEOs should take the lead on change rather than waiting for government to impose change on them.
- 65% of Americans believe CEOs should hold themselves accountable to the public, and not just to the board of directors or stockholders.
Given this situation, we set out to investigate the concept of organizational purpose and the implications for talent leaders. In research published in September 2020, we defined purpose as a clear and concise statement that inspires people to deliver value to multiple stakeholders: employees, customers, suppliers, shareholders and communities.
That research showed how all aspects of the talent lifecycle can be leveraged to enable purpose. Specifically, organizations can change their practices and systems around talent attraction, enablement, development and retention (Fig. 1).
While that research uncovered many high-level stories about how organizations can design their talent systems around purpose, we wanted to know what talent leaders have been doing throughout the pandemic to enable organizational purpose.
So we talked to a range of leaders from authors and venture capitalists to talent leaders at organizations known for a focus on purpose, including Johnson & Johnson, Medtronic and Sanofi, as well as those not as well known for purpose, including S&P Global, IDEO University and EY.
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Here are three themes that emerged:
Purpose and profit must be mutually inclusive
While it may be easy to think that purpose and profit are on opposite ends of a spectrum, that is not the case. Deborah Quazzo, managing partner at GSV Ventures, said purpose is one of the key criteria her venture firm uses to assess potential investments. “We don't label ourselves as an impact fund but we do believe very, very strongly that if an investment doesn't have impact, it's not going to have financial return,” she said.
Purpose must serve as a litmus test
Purpose can't just be a slogan on a wall. It must actively be used as a litmus test when critical decisions are being made. At Medtronic, the mission is a "stake in the ground that is immovable," said Jeff Orlando, the medical device company's chief learning officer. “Especially during COVID-19 and a challenging business environment, people make explicit reference to our mission and use it to help us get a decision unstuck, to reground the team and refocus on what we should do, not in a trite way, not in a cliché way, but in a real way,” he said.
Learning is critical in bringing purpose to life
In so many ways, a focus on learning brings purpose to life. It enables people to understand their own purpose. It also enables them to translate their own purpose into driving forward the organization’s overall purpose, said Rachel Fichter, global head of talent and leadership at S&P Global. “All companies have a purpose and in the past that purpose wasn't as altruistic or meaningful as it might've been," she said. "Part of my job is to help leaders define at a more granular level what accelerating progress means and then translate that into an inspiring vision for their organizations.”
That's just a small sliver of what we learned from our research into purpose. The biggest takeaway is that organizational purpose is a concept that is here to stay. Employees expect it. Customers expect it. And as a result, our talent systems must adapt to it.
The question you now must answer is: What are you going to do about it?
About the Author
Stacia Sherman Garr is co-founder and principal analyst at RedThread Research and a thought leader on talent management, leadership, diversity and inclusion, people analytics and HR technology.