IMD International

Leading corporations believe in corporate purpose, according to the IMD/Burson-Marsteller Power of Purpose study

September 2, 2013

IMD, one of the world's top business schools, and Burson-Marsteller, a leading global public relations and communications firm, today released the conclusions of an in-depth study into the importance that leading corporations attach to having and communicating a strong corporate purpose.

Entitled The Power of Purpose, the study builds on previous research and looks at the relevance of corporate purpose in the context of transparency, managing change and reputational recovery after a crisis. The study concludes that corporate purpose has become a beacon that guides and directs key business decisions, informing strategy and ensuring that everyone is aligned across growing global businesses. 

The study also showed that companies feel there is more danger today associated with a lack of transparency than too much, especially given social media. Transparency around purpose is also critical internally as it creates a culture that unites employees, instils shared values and provides motivation and inspiration.  

Corporate purpose tends to gain in importance at a time of organizational transformation. There were three scenarios where corporate purpose was identified as particularly relevant: following a change of leadership, following a merger, and for re-establishing and refreshing a brand. 

Purpose is also a key strategic tool for companies in a crisis, providing a story to tell and as a way of countering accusations that are perceived to be inaccurate. For corporate purpose to be effective, it should be in place before a crisis hits. 

"Business leaders are rapidly realizing that companies cannot do business on a failing planet – and that they are being held accountable. As the power of the global corporation is growing beyond national or regional boundaries it is clear that a purpose defined solely around profit is inadequately articulated since it does not reflect this vastly changing dynamic. However, it is essential that purpose is embedded in overall organizational strategy so that there isn't a disconnect between what companies say they do and what changes are really being made to how they operate," said Dr. Aileen Ionescu-Somers, Director of the CSL Learning Platform, a corporate membership driven learning initiative at IMD's Global Center for Sustainability Leadership which was launched at IMD in 2012.  

As Professor Francisco Szekely, IMD's Chair of Leadership and Sustainability and Director of the One Planet Leaders program, points out: "A clearly articulated purpose, based on an enlightened perspective on the contribution of the company to society, helps companies integrate sustainability across their business to drive value creation and benefit the planet."  

"First and foremost corporate purpose is a corporate strategy that drives business decisions. Communicating it is the next step," said Jeremy Galbraith, CEO, Burson-Marsteller Europe, Middle East & Africa. "This study shows that corporate purpose is becoming central to guiding business decisions. Communicating it clearly, internally and externally is one of the key strategic tools for companies seeking to build trust and reputation with stakeholders." 

"At Burson-Marsteller we believe that the most successful organizations are guided by a clear sense of purpose – a distinct and powerful world view that shapes their business, guides their actions and ultimately determines their reputation and success. This study shows that leading corporations believe in the power of purpose to weather whatever storms come their way, be that leadership change or reputational challenges. This is a big evolution and will shape how communications operate and communicate in the future," Galbraith concluded. 

To read the IMD/Burson-Marsteller Power of Purpose study click here.      

Methodology

Burson-Marsteller commissioned Penn Schoen and Berland (PSB), a leading research firm, to undertake independent, in-depth, qualitative, interviews of Communication Directors from 20 of the world's leading companies to obtain a snapshot of opinion from some of Europe's leading communications professionals. The interviews took place between April–June 2013. The research was informed by previous studies carried out by IMD business school in 2010 and 2011, with this year's study focusing particularly on topical themes of transparency, change and crisis recovery. The following companies participated in the research: Barclays, Bayer, Danone, Ford, GE, Heineken, Ikea, Johnson and Johnson, McDonald's, Novartis, Roche, SAP, Shell, Statoil, Telefonica, Trafigura, Unilever, Vale, Vodafone.



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