Executive purpose study in a changing business world
Just as the pandemic accelerated trends that were already underway in the media, it also accelerated trends in the business world. As the 2020 Porter Novelli Executive Purpose Study shows, in the last 50 years we have moved from a business model in which the sign of a successful company was one that regularly served up higher stock prices and shared dividends at any cost, to a stakeholder-centered approach to business, in which delivering value to all stakeholders, not just shareholders, is the new go-forward strategy. And COVID-19 only put this mandate into clearer focus.
Today there is a growing feeling among business leaders that companies must lead with Purpose. The benefits of this are numerous and go beyond heightened financial performance. Indeed, nearly all U.S. business executives surveyed in the study (99%) saw the reputational advantages of responsible business — and the majority noted employee recruitment and retention (95%), increased consumer trust (93%), increased customer loyalty (93%) and propensity to recommend (92%) as positive outcomes from leaning-in on Purpose.
If we had been told last year that the world would face a pandemic that would mean massive losses for many companies, we might have thought that business leaders would retreat from this strategy and return to focus on profitability. But this was not the case. In fact, 88% of business leaders believe now more than ever, companies must lead with Purpose. Moreover, 83% of executives feel the urgency for business to be a critical part of driving solutions for some of today’s most pressing issues — from COVID-19 and racial injustice to economic resurgence.
The pandemic not only helped accelerate trends already underway, but also exposed the enormous deficiencies and outstanding debts of our current democracies. In a context where injustices and inequalities have become more evident than ever, many business leaders do not want to look away and feel compelled to contribute to finding solutions to our deepest social problems. Today’s business leaders recognize their critical role in reshaping our future: 73% of business executives understand that they have more responsibility than ever before to address social justice issues.
The main issues these leaders feel they have a role in addressing are related to their everyday business and operations: they ranked sexual harassment (97%), employee health and safety (95%), racial equality (93%) and women’s rights (89%) as the top issues active in the news today that companies must address. What these percentages make clear is that we as business leaders are changing the way we assume our responsibilities and communicate our actions.
“The leading executives of today are once and for all looking beyond short term, shareholder-focused results and leaning into a stakeholder-centered approach to produce a successful, vibrant business community that results in a prism of benefits. A new course has been mapped for companies — and business leaders are ready to take the reins.” We, as global representatives of the media intelligence industry, also have the opportunity to contribute to a better world. So, let’s take the reins!
By Maria Laura Garcia, FIBEP President