Having a corporate purpose can motivate an entire employee population, energize customers, and make a global impact. To unleash its full potential, however, we need diverse perspectives to help inform and carry out that purpose.
Corporate purpose is becoming increasingly important for enterprises to embrace as employees and consumers demand more from corporate giants. And some companies are doing great work leveraging their core competencies to help solve the challenges facing the global community.
Companies who put purpose at the heart of their business are more likely to thrive in the future. Consumers now expect leadership from businesses in tackling global challenges, such as climate change. Edelman’s 2021 Trust Barometer found eighty-six percent of respondents agreed that CEOs should lead on societal issues. Forty-seven percent of consumers say they will stop buying a product if they’re concerned about how a brand approaches a social issue, according to research by McKinsey. Purpose is also imperative for attracting talent – 89% of people think it’s important for a company to have a corporate purpose, according to research from Glassdoor. Having a solid purpose everyone at a company can rally around instills a sense of higher responsibility, engaging workers in a way that may not be as motivating without it.
Corporate CEOs are leading amazing work at a global level to tackle challenges from climate change to global racial inequality. But implementing a corporate purpose that ideologically belongs to an entire employee base is extremely challenging. A McKinsey study found that only 42 percent of respondents felt corporate purpose drove impact in their organizations. Oftentimes 40-50% of employees are left out of the decision-making around purpose, with the top echelons of the organization and high performing talent determining what that purpose is for the whole. As a result, the voices who tend to be closer to the customers and communities the company aims to serve are often left out of the discussion, limiting the overall impact of corporate purpose.
Creating a purpose that resonates with an entire workforce and has impact beyond the organization demands more involvement from a diverse set of stakeholders – from the hiring stage, all the way throughout the lifecycle of a company’s employees. A more inclusive approach to corporate purpose presents a huge opportunity for companies to attract and retain talent from diverse backgrounds and lived experiences; improve diversity, equity and inclusion (DE&I) in their workforces; and drive real social impact for the future.
Expanding the reach of corporate purpose
A significant challenge is that many corporations apply a very narrow view to attracting and hiring talent. This limits the diversity of lived experiences and perspectives brought into the organization. For example, in the U.S., hiring often tends to focus on graduates from top Ivy League colleges.
Although racial diversity is improving in these schools, they’re not representative of the U.S. as a whole. Ivy League colleges have more students representing the top one percent of income distribution than the bottom 50 percent, according to a study by Opportunity Insights, a non-profit research center at Harvard. In addition, employers often list an internship as a prerequisite for entry-level roles. But more than 40 percent of internships at for-profit organizations in the U.S. remain unpaid, making them inaccessible for large swathes of talent.
Without broadening the hiring pool, effort to improve diversity in companies risks becoming a check-the-box exercise. Businesses need to ensure they’re hiring a range of people, including those who have proximity to the issues companies hope to address, or who have varied lived experiences, or who come from diverse socioeconomic backgrounds.
Improving inclusion within and between teams is also essential to ensure that, once hired, employees from across different functions have the opportunity to contribute to corporate purpose. Only 28 percent of employees reported feeling fully connected to their company’s purpose in a PwC survey. Many workers feel disconnected from their company’s purpose and struggle to see how it relates to their day-to-day work as a customer service representative or financial advisor.
To further complicate the issue of inclusivity as it relates to establishing and embracing corporate purpose initiatives is the propensity for leaders to focus on gathering input from high-performing talent picked out for leadership tracks, while overlooking the role the rest of their workforce can play in contributing to corporate purpose. This leaves many workers feeling frustrated, excluded, and like the company has missed some critical opportunities to establish a purpose that is truly informed by those who are on the frontlines.
Democratizing corporate purpose
Issues such as climate change, racial justice and gender equity are important to a wide, intergenerational audience. In addition, the pandemic has shifted many people’s expectations of work. More than 60 percent of U.S. employees say the pandemic changed their priorities to place a higher value on health and well-being, workplace safety, and company purpose, than on compensation and career advancement.
Workers at every level of corporate hierarchies have innovative, bright ideas to bring to their work. What they need are the skills and tools to help them understand how to drive change within their particular role or functional area. This can mean helping them to apply some of their unique lived experiences to their work, but also better connecting employees across hierarchies, locations and generations through Employee Resource Groups or other mechanisms. What is clear is that everyone needs to be a part of the conversation, and it’s up to the organization to establish ways to ensure that happens. After all, it’s in their best interest; employees at companies who are clear about how they create societal value have been found to be more motivated, proud to work for their employer and satisfied.
Preparing the changemakers of the future
At Rutgers Institute for Corporate Social Innovation, one of our primary aims is to equip our students with the skills and tools to be changemakers in whatever kind of organization they land in – not just the startups and the NGOs. That’s because many of our students can’t afford to work for organizations that require years of unpaid internships and job instability. For this reason, students dream of working for large corporations that can offer them the security and opportunity that they haven’t previously had.
The idea of corporate purpose isn’t necessarily something our students have encountered before. But when we talk about it, I can see a lightbulb going off – this is how they can find decent work and have purpose in their careers. For graduates and workers from less privileged socioeconomic backgrounds, a more inclusive take on corporate purpose means there no longer has to be a trade-off between purpose and financial security. Corporate purpose therefore has a huge role to play in the future to level the playing field for workers and give everyone the chance to shape a purposeful career path.
Over the last four months, I’ve been exploring this and other ideas about corporate purpose in the future as part of the Future of Work project, led by Verizon and Xynteo. We’re a group of 46 thought leaders and practitioners from across Europe and the U.S. working together to formulate actionable recommendations for business leaders and policymakers to accelerate a positive future of work. One of my hopes is that, together with the businesses taking part, we can start work to expand corporate hiring programs and engage the whole workforce in corporate purpose.
It’s clear to me that corporate purpose and DE&I not only complement each other – they positively reinforce each other. The more we can broaden corporate purpose to make it more inclusive of the whole organization and ensure companies are reflective of the communities they serve, the better for the future of work, workers and society.
This is part two of a five part series on the Future of Work initiative