Corporate purpose in the pandemic age – Winnipeg Free Press

Corporate purpose in the pandemic age – Winnipeg Free Press

What’s the purpose of a company?

Most businesses ostensibly exist to make money, but the way companies define their role in society is undergoing a generational shift that will produce winners and losers in the years ahead.

In late 2019 the powerful Business Roundtable — representing 181 leading U.S. CEOs — overhauled its definition of a corporation’s purpose, ditching shareholder primacy in favour of a more holistic set of indicators including community health, diversity, employee well-being and environmental sustainability.

Notably, the CEOs announced their new definition even before the arrival of the COVID-19 pandemic and last year’s wave of anti-racism demonstrations — events that have only accelerated the view that the purpose of business isn’t simply to generate profit but to serve a wider good.

A fast-growing consensus is now emerging that company reputation, customer loyalty, employee retention and long-term profit are all directly tied to the degree to which businesses are demonstrably improving the world around them.

The year 2021 is the year of corporate values and purpose, and evidence of this ongoing transformation abounds.

In Canada, the U.S. and abroad, companies have announced dramatic policy changes, backed by billions in new funding, to strengthen diversity and address racism. Corporate leaders have emerged as some of the most vocal advocates for action on issues ranging from climate change to mental health.

It may have been inconceivable even a short time ago to imagine the CEO of the largest asset management firm in the world, or the governors of major central banks, being among the planet’s most prominent climate advocates, but a new trendline has become firmly established.

It’s true that many companies, large and small, have long championed important causes and supported community projects where they operate. It’s also true that the trend toward a more pronounced focus on corporate social responsibility, or CSR, began well before the world-changing events of 2020.

But the subtle-yet-significant difference now is a shift from “giving back” to a full reimagining of a business’s very reason for being.

Through a certain lens this ongoing transformation may seem radical, but it’s more accurately characterized as a rational and commensurate response to the upheaval we’ve witnessed since the pandemic retooled virtually every element of work and life.

It is a post-pandemic reality that employees and customers expect more from business than a competitive salary or goods and services at the best price. The pandemic has exposed our very human vulnerabilities, priorities and concerns. The companies now best equipped to thrive know that success transcends product; it hinges on an ability to understand and meet a much more expansive and encompassing suite of customer and employee expectations and needs. All businesses, regardless of sector, are part of the empathy economy now.

The good news for business leaders is that opportunities to carve out a relevant, impactful and unifying purpose are all around. The past year has delivered no shortage of new challenges that desperately demand solutions — many of which have compounded old problems.

We now live, for example, in a post-pandemic world hungry for better ways of working: ways that elevate productivity while giving employees more domain over their time and more connection with their families.

We need better solutions to address the social gaps and inequity that have been exacerbated by the pandemic. We also need ways to help small businesses recover and become more resilient to future shocks, just as we’ll need ways to rebuild and revitalize our downtowns given the magnitude of permanent closures.

It’s increasingly clear we’ll need new ways to address the mental health toll expected to persist long after the threat of the virus has passed, and recent events in the U.S. underscore the need to strengthen the health of our democracy and fortify community trust, understanding and goodwill.

The list goes on. The companies best positioned for post-pandemic success aren’t those inclined to leave these challenges for others, but who are driven to embrace them with a sense of opportunity, possibility and urgent purpose.

David Leibl is founder of the Winnipeg-based communications and executive advisory firm www.oncallcomms.com. He can be reached at david@oncallcomms.com.

Published at Sat, 23 Jan 2021 09:00:00 +0000