Does Your Company Need a Chief Purpose Officer?
Purpose is embedded and integrated within the organization and impacts both internal and external communities.
Customers and employees are increasingly interested in a company’s purpose. They want to engage with companies that stand for more than products and profit. Many companies are becoming more vocal about social issues and implementing programs to benefit their communities. Some have gone as far as to name a chief purpose officer (CPO). Large companies like Deloitte, S&P Global, and PwC have hired executives for this role. Some companies have implemented related initiatives or worked with social purpose agencies and consultants.
Corporate social responsibility (CSR) is not the same as purpose, but there is overlap. Broadly speaking, CSR addresses societal issues, while purpose is embedded and integrated within the organization and impacts both internal and external communities.
Why are business leaders focusing on purpose?
The corporate spotlight on purpose is not just a reaction to our times. Companies have a responsibility to remedy societal problems they have contributed to, but beyond that, they have a lot of power to facilitate change.
And leaders are seeing that workers want to feel they’re part of something meaningful. Employees want to work for companies that take responsibility for their place in the community and world. They want to feel good about the companies they work for, and this means understanding their company’s values and purpose. Gartner HR Research discovered that 68% of employees said they would think about leaving their organization to work for an employer that is more committed to societal and cultural issues.
Consumers are also interested in and knowledgeable about where companies stand on societal and other issues. In fact, 86% of consumers say CEOs should be vocal about social issues, and 57% say they are more loyal to brands committed to taking action on social injustice.
How does purpose benefit your company?
Ensuring that your organization has a purpose beyond the bottom line may be the right thing to do, but there are practical benefits as well. Your company purpose can:
• Serve as a guidepost for members of your organization when making decisions.
• Differentiate your company from the competition.
• Increase public trust.
• Improve employee engagement and morale by giving more meaning to work.
• Help attract and retain talent, according to 79% of executives.
• Boost customer engagement and loyalty, say 68% of executives.
What can a company do to fulfill its purpose?
Your company’s purpose is intrinsically tied to what you do. For example, an outdoor equipment store’s purpose may be to not only serve those who enjoy the outdoors but to also protect nature and the environment. A baby supply company’s purpose may be to help new parents and families raise healthy children. Your purpose and initiatives aren’t separate from your products, processes, and people.
Your purpose and values should be incorporated into what you sell, how you work, and how you treat the people both inside and outside of your organization. Purpose will organically tie into social, political, ethical, economic, philanthropic, and environmental causes.
There are specific actions you can take to ensure your organization has a solid purpose and that employees and consumers know what that means for them.
• Define your purpose. Create a statement that explains the beliefs that built and sustains your organization. This should be relevant to those within and outside of your company.
• Take it to heart. Make sure your purpose isn’t just talk or one-off service events. This means your purpose is reflected in the way you work, whether that means adopting equitable and inclusive hiring practices, switching to more sustainable materials in your products, or taking other big steps.
• Choose a CPO or combine positions. Some large companies may install a CPO, while other organizations may give the role to the chief operating officer or chief people officer. An executive vice president may be the one to take on the duties. Or it may seem most natural for a principal or founder to take on the job because they have been heavily invested or involved from the start.
So, what does a CPO do? They help others in the organization see how their roles have purpose. They communicate that purpose not only to those within the company, but to the community at large. They participate in top-level strategy and decision-making. And they stay in tune with the values of your customers and how they align with your work and place in the world.
Even if a CPO isn’t right for your company, the most important part of knowing and sharing your organization’s purpose is to be authentic. Even without formal initiatives, your employees and customers will know when you’re not sincere or when you lack clear identity and intention. Taking the time and effort to figure out your company’s purpose will be one of the most important investments you can make.
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