Get Reworked Podcast: Why a Clear Organizational Purpose is So Important
Many companies have detailed corporate mission and vision statements, but do they have a real purpose? It's an important distinction to make as employees and customers increasingly expect their companies to take a stand on issues outside of work.
In this episode of Get Reworked, Stacia Sherman Garr, principal analyst and co-founder of Red Thread Research, joins us to talk about her research into organizational purpose and how to build it into talent practices.
"In this time when so many of us have been working these long hours and have been having to maybe home school or take care of elders, we can't help but ask ourselves, why are we doing this?" she said. "What's our own purpose? And what's the purpose of the organization I'm working for? And is it worth it?"
In this episode, Stacia explains what the purpose-driven organization is and how it fits into the future of business. Highlights of the conversation include:
- The history of stakeholder capitalism and why the focus on shareholders is a relatively recent phenomenon.
- How the last year has shifted the conversation about organizational purpose and social impact.
- How leaders can be authentic and avoid "purpose-washing."
- The ways that organizations can embed purpose into practice from hiring to employee development.
Plus, co-hosts Siobhan Fagan and Mike Prokopeak hear the voice of their internal skeptic and discuss whether or not this moment of corporate vulnerability and transparency will last.
- Stacia on LinkedIn and Twitter
- RedThread Research
- Podcast: Workplace Stories by RedThread Research
- Article: Build Organizational Purpose Into Your Talent Systems
- Report: The Purpose-Driven Organization: HR's Opportunity During Crisis & Beyond
- Business Roundtable Statement on the Purpose of a Corporation
Note: This transcript has been edited for space and clarity.
Mike Prokopeak: Hello, and welcome to Get Reworked, your guide to the revolution of work. My name is Mike Prokopeak and I'm editor in chief at Reworked.co.
Siobhan Fagan: And I'm Siobhan Fagan, managing editor for Reworked. At Reworked.co, we're dedicated to covering the people, the culture, the technology and the infrastructure that makes up our quickly evolving workplaces.
Mike: Get Reworked is our podcast, brought to you by Simpler Media Group, where you'll hear from industry pioneers leading the way into the future of work, reshaping not just how we work, but also why. We're excited to bring you conversations about best practices, workplace trends and key technologies that support the modern distributed workforce.
Mike: Hey Siobhan.
Siobhan: Hey Mike, how's it going today?
Mike: It's going alright. So it's been a fun year?
Mike: That's actually all that needs to be said.
Siobhan: That's it.
Mike: But I say that because it's been, I think, such a year of turmoil. But when you look at the role of companies in society, it's actually been a pretty interesting year as far as that goes, you've seen a lot of companies sort of step up. And obviously they had to keep in business, stay in business and survive. But there's been a lot more internal focus on employees and mental health and well-being of employees and their role in society, it seems like it's become a lot more prominent. What are you seeing happening with the role of companies in society over this last year?
Siobhan: I think it's been interesting because companies have been forced to make a stand in areas where normally they would not touch it with a 10-foot pole. But between the pandemic, the loss of human life, the Black Lives Matter movement starting up after the murder of George Floyd, there was no way that companies could avoid these topics. And so while I do have a fair amount of skepticism about how much companies can or should be involved in changing societal issues, I do think this is a move in the right direction, if it's genuine. What about you, Mike?
Mike: Yeah, well, I think you're right. It was in 2019 that the Business Roundtable came out with a position paper saying that shareholder capitalism as a practice is no longer the way we should be managing businesses. We need to look much more broadly at the role of our business with a broader set of stakeholders, consumers, communities, our employees, all of these are equal in the way that we look at how we operate companies.
And you know, it was fairly easy at that time to say, okay, that's just a bunch of CEOs saying what they think is the right thing so that they can go about doing business as usual. But March of 2020 hit and things got real really fast for businesses. And so they really had to shift their perspective on things because it affected everyone. And they really had to hone in on what is their purpose.
So we brought in an expert who's going to be talking a bit about purpose and how that has changed over the last year and how it's different from mission and vision. And really, what does that mean for our business practices, in particular our practices for talent management and how we find, select, develop, attract and retain people and connect them to the bigger purpose. So the bigger purpose, meaning what they're looking for out of their careers, but also aligning that with the organizational purpose.
Stacia Sherman Garr is one of the co-founders of RedThread Research. She started it in 2018, after eight years working with Bersin by Deloitte, which is one of the premier HR consulting organizations. Before she worked at Bersin, Stacia spent about five years conducting research with the Corporate Leadership Council, which was part of CEB and Gartner. She's somebody I've known for a number of years, and I really respect her work. And she's going to be talking about their report on how to build a purpose-driven organization. So it's my pleasure to bring in Stacia. Are you ready Siobhan?
Siobhan: I am. I'm looking forward to it, Mike.
Mike: All right, let's Get Reworked. Welcome to the podcast, Stacia.
Stacia Sherman Garr: Thanks so much for having me, Mike.
Mike: I've known you for a while now and you have been gracious enough, along with your fellow research analyst and co-partner in RedThread, to start writing for Reworked. And one of the recent topics you wrote about for us was the purpose-driven organization and sort of the talent practices that need to be in place behind a purpose-driven organization. So one of the things that you said there, and I think one of the things that you mentioned in the research report that underpins this, is talking about the focus on corporate goodness.
So this last year has really shown a new face. In some cases, for some companies where they're really focused on trying to be good citizens. Your argument is that this recent focus on corporate goodness will remain once we go back to quote unquote, more normal circumstances. Why is now any different from other times when we're talking about corporate social responsibility, corporate goodness, a lot of these topics? Why do you feel like now is different?
Stacia: Well, I think I'd start with the definition of corporate goodness as being equal to purpose. And I actually don't think that's necessarily the case. So corporate goodness, or CSR [corporate social responsibility] has obviously been with us for a very long time. And this idea that we should be giving something back broadly to our communities is consistent with what we've seen for a while. But what I think is different now is this idea that an organization doesn't exist just to give benefit to its shareholders, but rather to this broader set of stakeholders. And as we wrote about in the article for you all, and we also wrote about in the research report, this is a trend that has been happening for a while.
it was most epitomized by the Business Roundtable statement in August of 2019, so before the pandemic, that restated the purpose of a corporation to serve these multiple stakeholders, and that the shareholder no longer had primacy. And that may have seemed somewhat radical to some folks, but actually where we've been, has been more radical. So the idea that the shareholder has primacy has only been around since the 1970s, but rather this idea of stakeholder capitalism as we're now calling it, but rather that we have an obligation to our broader society and all these different stakeholders, employees, customers, suppliers, communities, and then shareholders, that concept has been around since the 1830s. So really, in some ways, it's a reversion.
And so to answer your question more directly, why are we focused on this stakeholder capitalism? Why are we focused on this broader concept of purpose? I think it's because we have this acknowledgement of what has been before. But then also in this time when so many of us have been working these long hours and have been having to maybe home school or take care of elders, we can't help but ask ourselves, why are we doing this? What's our own purpose? And what's the purpose of the organization I'm working for? And is it worth it?
Siobhan: I'm a little bit of a history geek. So would it be possible to talk a little bit about those examples from the 1830s? Because I do not know about any of those.
Stacia: Yeah, so I'm also a historian. I'm actually, I have two degrees in history. So I'm right there with you.
So there's a great book called The Enlightened Capitalists, I'm actually literally looking at it on my bookshelf, and it's by a professor down at USC. And he actually kind of walks through this history of organizations trying to do well by doing good. Unilever had a focus on building communities for employees and making sure that employees were paid a fair wage. So that was one of the earliest examples. There are a number of other Quaker-inspired organizations as well.
Johnson and Johnson, which is actually an organization that we interviewed for our podcast, from its original founding and this is more in the 1940s, immediately after World War Two, they talked about how their obligation, which they've put into their credo, is not first to shareholders, but it's first to the patients, to the doctors, to the nurses, to the mothers, etc. So if you have a look at a book, like The Enlightened Capitalists, they kind of trace that history. I think, to your point, though, which is a little bit underlying your question about, is it broadly adopted? James O'Toole in that book would say no, but there's enough examples of it and enough examples over time of how those organizations have outperformed those peers, that I think it's compelling.
Siobhan: So you mentioned Stacia that the Business Roundtable position paper came out in 2019. So these are trends that were happening before 2020. And all that came along with 2020 happened? How do you see this last year of 2020, reshaping some of that conversation? Do you see it accelerating? Do you see it exploding it? I mean, how do you see the last year really changing part of that conversation?
Stacia: I believe it's accelerated it. So the Business Roundtable interestingly, on the first anniversary, so August of 2020, came out with some more language around basically what those companies had done in the course of the pandemic to date, and the positive impact that they'd have. So they really kind of doubled down on that statement.
All marketing aside, I think you did see that happening, I wrote an article for you all about it. Certainly things like ventilators being produced by folks like GM and Ford, we saw also a response to the social justice movement broadly across organizations. And so we saw a lot organizations making strong pledges, of course, the proof will be in the pudding as we kind of move into 2021. But we certainly saw people doubling down on this idea that we are all connected, and that we all have an obligation, at least to some extent, to serve multiple stakeholders.
The question I have, as we look to the future is how are we going to measure this? So there's been a lot of focus on ESG metrics. And we've also seen a shift even in things like the SEC reporting around human capital metrics. So I think we're gonna see a big focus on metrics and measurement coming out of this to make sure that this isn't just purpose-washing. So that's one of my big questions.
The second question I have, particularly if the economy gets quite a bit better as we hope, will some of this go out the window as people chase the profits that they had missed, if you will, during the pandemic because they're trying to recover from it? My hope is that both consumers and employees in particular, will not let their organizations kind of run them over. But I think that is still a bit of an open question. And we'll have to see as the economy does begin to recover.
Siobhan: Stacia, you just mentioned purpose-washing. And it's funny, because while you were talking about history, I was curious if you would bring up Carnegie because he obviously did wonderful things as far as setting up the public library system in the country, but also, in his steel industry practices had some questionable business ethics. And I'm wondering how much of what is happening today, when we look at companies making broad social media statements in support of say Black Lives Matter? But if there isn't any substantive backing of that, are we seeing purpose-washing to kind of jump on a bandwagon?
Stacia: There is an aversion to that particularly when it's in the diversity, equity, inclusion, belonging space that wasn't there even three years ago when we had the Me Too movement. And I think the reason for that is that one, the murder of George Floyd was so public, was so in everyone's face, it would almost in some ways make you inhuman if you just said, oh well, we're now just gonna say we support Black Lives Matter. Whereas if it's something that wasn't quite so much in your face as MeToo. It certainly was in our face but it wasn't recorded, it wasn't broadcast live on social media. So I think that that's one big difference.
I think the second big difference is that there's been a lot of lip service to diversity, equity, inclusion and belonging for decades. Again, with the events of last summer, it felt like there was a perception of you know, enough is enough. And you see that in some of the data. So for instance, from the Edelman Trust Barometer, they did a really good study on social justice and trust last September following on from his movements of last summer. And I think it was 82% of individuals expect organizations to do something, not just to say something, but to do something about social justice, and that if they perceived brands to be just purpose-washing or just paying lip service that the trust in those brands would go down substantially. Brand trust correlates with consumer purchasing intent.
So we think that there's data that says you cannot just purpose wash on this one. We have seen changes in that a lot organizations have gone out and hired chief diversity officers that did not have them before. But I think the question now is, what practices are they actually going to change? And to my point earlier, are they going to measure them?
Mike: It's a, I think, an interesting point that comes out of this, the role of the CEO and the leader. And some of these issues can be minefields for executives. And I'm not saying we should feel sorry for the CEOs and their, you know, multi-million dollar salaries. But how do they engage meaningfully into these challenges and not have it come across as performative. I'm just sort of checking the box here.
Stacia: With the way that we saw folks doing it last summer, when it was done well was really through open conversations as a starting point. So I think one of the benefits, if you will, the silver linings of the pandemic, was that a lot of CEOs, a lot of senior leaders had to say, I don't know, we're all going to go to work from home. We don't know how this is going to work. We don't know when we're going to come back. There was a lot of, I don't know, or this is uncharted territory. And I think in some ways, it softened them up, if you will, for what came with the social justice movements when it was like, oh, we maybe thought we didn't have these problems in our organization but seems like we do. And I don't know the answer.
And so I think that listening, that open dialogue, that was one of the big trends that we identified with our diversity, equity, inclusion belonging strategy paper that we published it in the last year, was a lot of CEOs and senior leaders are saying, look, we don't know the answer but we want to listen, we want to have the conversation, we're open to it. And we're not going to shut it down in the ways that maybe we have in the past, I think that's the first piece.
The second piece is what we have seen many organizations doing actually just in the last couple of months, which is tying executives pay to improvement under diversity goals. Now, that doesn't necessarily mean on diversity representation metrics because you can get yourself into some trouble there. But things like you know, we're going to have diverse candidate slates, we're going to have diverse interviewers, we're going to have people from a range of backgrounds looking over different things, I mean, all these kinds of policy things that you can put in place and then measure, you can then tie that to things like executive pay.
And then the third way is to be more transparent on metrics. So we've seen organizations like Google and Facebook because of what happened in the mid 2010s publishing their diversity reports online. My alma mater, Deloitte, has put it out. PwC has put these out. And I think we're going to see more of that. Transparency, of course, needs to be connected to the metrics, which is why I put metrics actually first before you have transparency, because that could seem performative if there was no connection. But I think if we do those three things, it's a pretty decent start.
Siobhan: One question that I kept thinking while I was reading your report was, if purpose can be separate from the product or service a company offers? Can an organization be purpose driven but still have perhaps a questionable business model? Not saying anybody ... Facebook ... but it was something I kept returning to, I mean, can an organization do all the right actions in many areas but still fundamentally have a product that isn't necessarily the best for greater society?
Stacia: I think the answer is yes. And the reason for that is, it's easy for us to sit here and equate purpose with goodness, which is why I've started off challenging Mike's assertion there. Purpose doesn't have to equal goodness, purpose has to equal a sense of something bigger than yourself and feeling connected to it. And so we've seen lots of things recently, where that is the case, there is a clear purpose. But it might be a purpose that none of us here on this call would think is good.
So maybe some of the political happenings of the last fall might fit into that category. Some companies, cigarette manufacturers, those e-cigarettes, some of us here might say that's not great, like I would, my mom died of COPD. But there's a whole bunch of people who say, look, that's how I relax. That's like part of how I get by. And so I am hesitant to judge those models necessarily, or at least to say that they can't be purpose driven because they do have a purpose. It's just not one that I personally necessarily agree with.
But the concept of enabling people to understand what their own purpose is and connecting that to what the organization is trying to achieve, and you know, let's just take the cigarette example. It might be we're trying to enable people to relax, to enjoy, to have a good time, the way that it happens maybe not great, but there's a lot of people who could say, yeah, I get on with that purpose. Like, I want people to be happy. This is how I'm going to connect to it. So I think you can.
Mike: You made a couple points now to say that purpose is different from mission or purpose is different from goodness. So I think it probably would behoove us to talk a little bit about purpose. I mean, what is purpose in how you're defining it? And how is it different from mission and vision, which have been established practices within companies, a set of mission statements, they have vision statements, they have a line set of priorities and behaviors that feed up into those different mission visions. How does this idea of purpose, as you are conceiving of it, and talking about it and researching it, different from those more established ways that people have to talk about some of these things?
Stacia: Yeah, so we define organizational purpose as a clear and concise statement that inspires people to deliver value to multiple stakeholders, and those stakeholders being employees, customers, suppliers, communities and shareholders. And so how is it different? We see purpose as really why or why we, as an organization do this, we define a vision as where we want to go. A mission is what we do now. And in the future. So the what the visions, the where the missions to what, and then two other concepts that are often interrelated, our values. So those are, what behaviors we want to uphold, and principles, which are the beliefs that guide our behavior, but purpose is really kind of this concept that underlies all of those things.
Mike: If I could ask one more clarification question because I think I want to make it so that it's crystal clear for folks who are listening. We talked about diversity, equity and inclusion and belonging, DEIB. What are some of the traditional areas that would fall under, quote unquote, the purpose here as CSR? How do you define what the core areas are?
Stacia: Yeah. So I think you're right. I mean, there's a number of different things that could kind of come underneath purpose. So CSR certainly is one, a lot of the community benefits or community efforts that an organization has would also fit underneath that umbrella, if you will. And a couple of the other ones are sustainability — we see a lot of organizations thinking about it, actually, even Starbucks just came out with a statement this morning about their sustainability efforts. And then finally philanthropy. And that goes to your friend Carnegie, in their charitable donations and the like.
But I think that fundamentally those things sit a little bit outside of what we're talking about with purpose, because as we see it purpose is imbued in how you do the work. How do you deliver the product? How do you engage, retain, hire your employees? How do you think about your supply chain, so it could involve elements of it but it's the fundamental thread that goes through the entire organization. And in that way, it is a bit different.
Mike: It's like who you are vs. mission and vision which is what you do and why you do it, perhaps. This is who you are and how you carry out your work.
Stacia: Yeah, I think that's a nice succinct way to put it, Mike.
Siobhan: So Stacia, at this point, I think it would be great just to hear a few examples of different corporations that our audience might recognize, their purposes and how those purposes manifest in their business practices. Do you have any off the top of your mind?
Stacia: Yeah, so in the report, I think we identified, I don't know, 50 of them. There's a lot of them that that we did. So just a couple examples, one that many people might know of is Patagonia and their purpose statement is to "Save Our Home Planet." And so you'll see that manifest in pretty much everything that Patagonia does. So they have a whole focus on conservation, including lobbying the government and the like. And they will actually actively encourage people not to shop or not to buy new things. They have a way that you can trade in your old Patagonia gear and sell it. And that way, they keep more clothes out of the landfill so it permeates their entire set of practices.
Another organization, which you may not expect to focus on purpose but really does, is EY and I believe their purpose statement is "Making Work Better." It's something very similar to that. But they actually have a group focused on purpose and vision and bringing that through their learning programs. So their chief learning officer actually very heavily focuses on this area of purpose and how they can enable people to find their own purpose and to apply that in work. But then they also take that to their clients and help them understand and identify their purpose. So you know, having been kind of in the consulting world, myself, I was maybe a little bit skeptical about it, but after our own podcast conversation with them, I came out really being impressed with how, you know, you could take something like consulting, which may not seem as connected to purpose like Patagonia and make the connection very clearly.
In our report, we had some other examples of organizations. So you know, for instance, we had Kroger, their statement was to "Feed the Human Spirit," Medtronic, to contribute to human welfare, we actually also had them on our podcast, and the way that they focus on purpose and delivering value to patients and doctors is just phenomenal. A couple of other organizations that may be not seem quite as obviously purpose driven would be USAA. So they're focused on delivering value to military families, they say, to lead and inspire action that improve lives in the military in our local communities. Just some beautiful statements about, it's not just us delivering a product or a service but really about helping people find who they are, and make that connection in the organization coming together and making a broader impact.
Mike: So we're getting in now to kind of the heart of your work, which is talent practices, and how do you make that promise of a purpose-driven organization real because it is so much more about how you work and how you treat your people within your organization and tie them into purpose. So talent practices are pretty key here and you lay out four key areas in the report that I certainly encourage people to check out. It's attract, develop, enable and retain as the four key areas where you can gravitate your talent practices around. But I'm wondering if you're seeing one or two areas where you think that an organization can deliver an outsized return for its investment in purpose. Are their key areas that you think are kind of like super levers for pulling on purpose?
Stacia: Yeah, I think the first one is talent acquisition. The reason for that is just like in so many other ways, you know, bringing the right people into the organization, people who are going to have a purpose that aligns with the organization, that's much easier than kind of trying to go about it the other way, once you have everybody already in the organization saying, hey, do y'all want to align to our purpose. So I think that part, and the other aspect of that is you're not only finding people who will want to contribute to the organization's purpose and bringing them in. But even those who do not fit the bill for whatever reason, you're communicating that purpose, and more likely, they're going to have a positive perception of the organization as a result. So attraction is one.
The second one is definitely learning and leadership. We heard a lot about that in our conversations. And the reason for it is the chief learning officer and learning team has an opportunity to help shape the culture of an organization by enhancing people's awareness of their own purpose, understanding how they connect to that purpose, and then creating a culture that reinforces. That I think is really key to making purpose come alive in the organization. So if it's expected, if leaders are engaging in practices that reinforce it then you're able to kind of leverage that and turn it into more than just something that's on the wall. But actually something that's part of how we live and breathe and how we make decisions.
So if I were leading an organization, those would be the two areas I would initially focus on.
Mike: It comes back to when we're talking about CEOs and their role to be authentic in this conversation vs. more performative. CEOs, leaders are generally not selected for their ability to say, "I don't know" about things. But that is important when you're talking about leading a purpose-driven organization, one that can change and adapt and become much more responsive to the world around them.
Stacia: And I would also say that if you reflect 10 or 15 years ago, that statement that CEOs are not hired to say I don't know was especially true. You know, this idea of vulnerability and openness. That was not something that we were talking about. But fast forward to today and I think those concepts of I don't necessarily know, let's ask the team, let's get, you know, more people involved in this to help us understand what's happening. I think that has really shifted and with that shift, I think comes some of these things like a focus on broader purpose because it's no longer just about the CEO and their executive team making decisions but much more about how do we build an organization that together makes better decisions.
Siobhan: Stacia, one of the things that we've seen from this past year, and all it brought us is the increased visibility of HR in the organization, and a recognition of the outsized impact it could have on the organization and a lot of your report does look at the different areas that human resources has influence over and what it has direct control over. So I was hoping that you could maybe give some specific examples of how human resources can push along this purpose-driven organization. And if you see that influence continuing when we get back to, I'm not gonna say the new normal, whatever it is that we're calling it these days.
Mike: The new abnormal.
Siobhan: Yeah. The new next normal. I give up.
Stacia: I think I've been calling it a new stability.
Siobhan: I'll take that.
Making the Employee Experience Empathetic to Frontline Workers
Learn how leading organizations use EX tools to connect people with the resources they need in the field or on the move.
Voice of the Employee: Aligning Employee Listening with User Experience Tools and Services
Keys to ensuring technology platforms are intuitive and accessible for all
Hiring New Talent in the Era of the Great Resignation
Learn the factors that are important to employees as they evaluate new job prospects
Workplace Origami: Making Sense of the Forces Shaping the Workplace in 2021
Effective human capital management practices are key to thriving during the workplace revolution.
Retaining Employees in the Era of the Great Resignation
Learn about what has worked - and what hasn’t - to help retain talent at other organizations
Top 10 Challenges For the Workplace of the Future
The workplace is changing in ways we couldn’t have anticipated. Here are the top considerations for organizations as they adapt.
Stacia: Yeah. So I think as you said, in our report, we do this, something we've never done before but I actually quite liked it was this idea of what are the circles of control and what are the circles of influence within each of these talent practices. So you know, for instance, with recruitment that is very firmly within HR, or the talent acquisition team's control. But things like candidate experience, some of that's in their control, some of its in their area of influence, and employer brand, is, you know, kind of in their area of influence but definitely not in their area of control.
So what are some of the things that HR leaders can actually think about doing? With talent acquisition, we spend some time in the report talking about how organizations can think about the recruiting process and making sure that they are looking for folks who have a clear purpose or whose purpose at least if they uncover it will align with what the organization is trying to do.
Second point and and you'll notice obviously, as we've talked, there's a lot of overlap with DEIB within talent acquisition, you know, making sure that we are bringing in diverse talent slates so people from a wide range of backgrounds and diversity in the people who are interviewing those individuals. We're also seeing in that front organization, certainly think about how do we bring back diverse talent that may have left the workforce, particularly during the pandemic. So, I actually saw something for returnships at Facebook actually showing how, you know, people could kind of do these almost like an internship but a returnship and get to experience working at Facebook, and then they can make a decision mutually if it makes sense for them to come back on. But we're just starting to see people kind of thinking through how do we bring purpose, how do we bring a broader focus to talent acquisition in our organizations?
And then, you know, on the other side with learning, how do we connect people to their own purpose, so that can be a formalized learning program and learning aids that go along with that focus on purpose within our leadership development programs. So both making sure people understand their own purposes, they kind of move and change levels, because their purpose may change. But then also, how do they inspire and enable purpose in those who they're leading in the organization.
And then also, I mentioned a few minutes ago, this concept of culture, so making sure that we're thinking about purpose in a whole range of ways. So you know, if we were making decisions about the types of programming we're going to bring in, or about the types of resources we're going to offer to people, do they tie back to purpose? So always kind of having purpose as one of the lenses that you're looking through everything that you're doing when it comes to learning and leadership.
Mike: Stacia, I want to stay on HR for a second, because it seems like a great opportunity for HR to sort of grow, expand its influence both what it controls and what it influences more broadly and tie into the bigger picture. But I want to ask you if HR has a credibility gap when it comes to that. I'm not just speaking of the sense of HR is about the softer side of business, not about the hard numbers. I'm actually talking more specifically about the fact that things like the Me Too movement, these were issues in our organization for decades, maybe since the beginning. But yet HR didn't necessarily take a leadership role. And in fact, in some organizations may have been actively participating in some level of papering over or covering it up. How do you overcome that credibility gap if there's that history there in HR?
Stacia: I think it's important to think about the relative sophistication of HR organizations. So there are some, as you know, that are very focused still on just basic compliance, you know, making sure that we stay within our legal obligations. And then there are some amazing organizations that are truly partners to the business, who are thoughtful, who are also careful about what's happening with employees and who were on top of things like Me Too in an effective way. So you think it's easy to say, oh, well, you know, HR overall has a credibility gap. Whereas I think there's a lot more nuance.
So for those organizations where maybe there is a credibility gap, I think there is definitely a need and an opportunity for HR to be clear about and to own what maybe didn't work before. And to state, this is what we've done to rectify it and this is what we're going to do moving forward. I don't think you can, you know, just pretend that it didn't happen, because clearly, you know, some of these decisions have happened. But there are a lot of organizations out there with HR leaders who did respond effectively, and who do have the trust in the organization. And so for those organizations, I think that it's important to keep communicating as they have been.
But then also, I think there's almost in some ways a broader obligation to help the HR community understand what they're doing and to normalize some of these practices. So statements or sharing of leading practices they're making, I think that's an important thing for HR leaders to do within the broader HR community. But to my point, I just want to be careful not to paper over everybody because there are some leaders that we've seen that have done some really remarkable things.
Mike: They're part of credibility is certainly owning mistakes that happen but also making sure that those stories are told when you did do the right thing, and that people are aware of that. Not that's not really about tooting your own horn or celebrating, but it's much more about, hey, listen, we're making progress. We're not perfect, but we're making progress.
Stacia: Yeah, no company that I've ever interviewed even those who have maybe had the best practices I've ever seen has said we've got this figured out. No leader has ever gone that far. They've always said, Well, you know, we've learned a thing or two and I'm happy to share that or, you know, we had a few missteps but here's how we corrected them and this is where we are. For organizations or leaders out there who think, well if we've learned a thing or two, but I don't know if I want to toot my own horn, just please, please share what you've learned, because that is what this is all about.
Mike: All right, one final question, the role of technology? Can you kind of give us a snapshot? How can technology play a role here in helping companies be more purpose driven? Is there a role because it's often seen as negative. It's often seen as automation taking away jobs or technology disaggregating whole industries. How do you see technology playing a positive role?
Stacia: One of the areas that was the most pleasant surprise for me in doing this research is some of the technology that are available to folks. So for instance, two companies we came across were Benevity and WeSpire, and they are both trying to help organizations scale and enable purpose. And so for instance, you know, purpose might be to make a positive impact on the community, that might be one aspect of purpose. They enable you to align efforts and understand like number of hours that are being given to a particular organization or types of effort or the like. So I think that there is at least that clear application of technology and aligning people and coordinating people's efforts around purpose-driven activities.
But I think that there's a second element, which we didn't talk about as much in the report, which is this idea that because tech enables scale, the way you've set it up, the way you ask questions, the information that you put into it, in the way that you analyze, it can all have an impact on purpose. And so when you go back to thinking about whether it's your ESG metrics or your metrics overall, you can be using technology if you're thoughtful about it to understand what's actually happening in the organization, to measure that and to measure the impact and look at it over time. So there are ways that technology can help indirectly in addition to kind of direct vendors who are focused in the area.
Mike: All right, so to close things out, we'd just like to throw a few topics at you and ask you if you feel like it's underrated or overrated as a topic for people in business to be thinking about, feel free to add a little bit of explanation if you want. Are you willing to play along with us here?
Stacia: Absolutely. Let's do it.
Mike: All right, the first one I have for you, and knowing our history together and working with you, but also your work as being an analyst in the HR industry, the idea of ROI as a meaningful metric for HR work. Do you feel like that's underrated or overrated?
Stacia: Overrated. Completely. So ROI, in many ways, as Dani likes to call it, is a dead metric. Meaning once you've done something with it, what do you do with it? And then the other thing that I think of is, my MBA's focus is in finance. And if you used ROI, any CFO would look at you like, what are you talking about? Like at least give me a net present value of this number?
Mike: It's a made up number.
Stacia: Yeah. So I don't think that that is where HR drives value, HR drives value in the changing of practices that scale across the organization. And I think you're going to struggle to measure that well. In the most sophisticated HR organizations I've seen, they do not focus on ROI.
Mike: Yeah. But they're like mosquitoes or moths drawn to the flame. Dani, by the way, is your business partner in RedThread Research for those who are listening.
Siobhan: Next up, we have B Corp.
Stacia: I believe in B Corps. Actually, back to Dani, she keeps trying to convince me that we should become a B Corp. I'm not sold yet. But I think that B Corps are an important thing. And the reason for that is I think that it gives executives permission to focus on more than a single bottom line. And yes, we've you know, had the concept of triple bottom line since the 1990s. But this way, it's actually put into the way that the business is structured, and there's a financial and legal obligation to report on a broader perspective of what's happening in the business. And the other thing is that we know that B Corps actually tend to perform better during financial crises. So in the last financial crisis, 64% of B Corps were more likely to survive that financial crisis than normal, you know, like an S Corp like what, what we are. So I think they are underrated.
Siobhan: Can you give a very brief, concise definition of a B Corp for anybody in the audience who is unaware of what they are?
Stacia: Yeah. So a B Corp is a business that meets the highest standards of social and environmental performance, public transparency and legal accountability. So the idea is they balanced profit with purpose. So if I remember, right, I think that they kind of came into being in the last decade as an actual financial or a type of legal legal entity, but that's what they do.
Siobhan: Then it's actually quite rigorous process that they have to go through to actually be recognized as such, right?
Stacia: Exactly. Yep.
Mike: All right. I think I know the answer to this one, but I'll ask it anyway, the study of history is do you feel like that's underrated.
Stacia: Way underrated.
Mike: What did you study in history, by the way?
Stacia: My undergrad was in American history and my master's was in history of international relations. I think it's way, way underrated because if you understand history, well, you are not focused on dates. You're focused on patterns and trends, which is what I do right, I focus on patterns and trends. I have data which is the equivalent of dates in a history study that make the point but it's really about understanding how things connect together, whether it be political or it be economic trends. And so if you have a good history teacher that can change your life. They certainly changed mine.
Mike: I was a history minor. That doesn't really count but ...
Stacia: It's close, Mike. It's close.
Siobhan: I hovered near history myself.
Mike: I just like to keep repeating history. I think it's fun.
Siobhan: Stacia, thank you so much. If people want to read more of your research or find out more about your work, or to follow you on social, where can they go to find these things?
Stacia: Yeah, so if they want to read our research, go to RedThread Research, and they can find me on social on Twitter and on LinkedIn. I believe we've done a lot of work on purpose. We have a podcast now, which you can find on iTunes called Workplace Stories by RedThread Research. And you can also get links to the podcast from our website.
Siobhan: Excellent. And what exactly was the title of the report that we've been referencing all day? Because I'm sure there's gonna be people who want to read that.
Stacia: Yeah. So it is called "The Purpose Driven Organization: HRs Opportunity During Crisis and Beyond."
Siobhan: Excellent. Thank you so much.
Stacia: Thank you.
Mike: Siobhan, you're a little bit of a skeptic when it came to corporations doing good. Did Stacia change your mind at all?
Siobhan: I still have that kernel of skepticism. I think it's at the core of my being, Mike. But she definitely gave me some good food for thought. She gave me some ideas that made sense. And I think it was, specifically, when she was sharing the corporation's purpose and how it aligned with what they were doing as a company. So EY and Kroger, those were pretty compelling arguments for being a purpose-driven organization. So yeah, I would say that she maybe turned a believer out of the skeptic. How about you, Mike?
Mike: Yeah, I think there was a couple of really interesting points in there. The one thing that stood out to me is really that idea of leadership as a lever for pulling on this. And to me, as someone who ends up saying, I don't know a lot, I think it's really encouraging to see that or at least to say that that has been the beginning of this journey on purpose for many organizations is for their leaders to recognize that they don't know and they don't have all the answers. And that's okay. That's actually part of the process of becoming more purpose driven is by saying to folks that hey, listen, I don't have answers. We're not perfect. But we're going to be addressing this. And I am listening. That really stood out to me as a key piece of the conversation.
Siobhan: I wrote that down in all caps in my notebook that I keep next to me. But I really do think that it's a sign of the vulnerability that we're starting to see in organizations that really was not the norm before. So yeah, I agree with you, Mike.
Mike: Yeah, it'll definitely be interesting to watch how this develops over time. And I agree, there's a little bit of skepticism that sits inside of me as well. But there's also an optimist in there who says, you know, if there's anything that can make us change, it should be this last year and we'll definitely see where it goes. And it makes me hopeful for the future.
Siobhan: I would love to be proven wrong here.
Mike: All right. Well, that wraps it up for now. Thanks. We'll talk to you next time.
Siobhan: Bye Mike.
We encourage you to drop us a line at [email protected]. If you have a suggestion or a topic for a future conversation, we are all ears. Additionally, if you like what you hear, please post a review on Apple Podcasts or wherever you may be listening. And be sure to share Get Reworked with anyone that you think might benefit from these types of conversations. And then finally, be sure to follow us at Get Reworked on Twitter as well.
Thank you again for exploring the revolution of work with us and we'll see you next time.