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KEEPING IT REAL
How authentic is your corporate purpose?
www.powerofpurpose.eu
2
Based in Switzerland, IMD is ranked first in open
executive programs worldwide (Financial Times,
2012 & 2013) and first in executive education outside
the US (Financial Times 2008-2013). With more
than 60 years’ experience, IMD takes a “real world,
real learning” approach to executive education
(www.imd.ch), applying an open, collaborative and
pioneering approach to everything that it does.
For this reason, IMD’s newly launched Global Center
for Corporate Sustainability (CSL) has a research
and learning platform with an active membership of
global companies and other partners such as NGOs,
international organisations and think-tanks
focusing on promoting innovation for sustainability.
The CSL Platform pursues a mission of contributing
to leadership in sustainable development by focusing
on mainstreaming social and environmental issues
in corporate strategies and providing knowledge-
sharing platforms to promote strategic innovation
and best practice in sustainability initiatives
(www.imd.ch/csl-learning-platform).
Cover image:
©Alexis Robin Original Artwork
Burson-Marsteller, established in 1953, is a leading
global public relations and communications firm.
It provides clients with strategic thinking and
program execution across a full range of public
relations, public affairs, reputation and crisis
management, advertising and digital strategies.
The firm’s seamless worldwide network consists
of 73 offices and 85 affiliate offices, together
operating in 110 countries across six continents.
Burson-Marsteller is a unit of WPP, the world’s
leading communications services network.
Our purpose is to help our clients discover,
define and deliver their corporate purpose.
For more information, please visit bm.com.
3Keeping it real
Six years after the financial crisis of 2008 shook
public confidence in corporations, corporate
reputation is showing signs of improvement – but
significant challenges remain. Less than a quarter of
the general public in the developed world say that
corporations were humbled by the financial crisis,
and even C-Suite business leaders overwhelmingly
agree with the view that corporations are not acting
more responsibly than before1
.
There are also real challenges for business leaders,
who are still mainly seen to be motivated by greed
and maximizing profits for their corporations and
themselves. This means that anything they say is
viewed with scepticism. So how do corporations
and their leaders overcome this mistrust and come
across as “authentic”, or real?
We have been working with IMD business school
since 2008 on corporate purpose. Our perspective is
that companies who are true to a raison d’etre which
goes beyond short-term financial considerations, and
where stakeholders understand not only what the
company does but also the core principles guiding its
work, have a competitive advantage. IMD research
shows that a strong and well communicated
corporate purpose can impact financial performance
by up to 17%2
. It also strengthens a company at times
of change and crisis, by providing a common vision
around which to rally its key stakeholders and
engage its employees.
This year’s study identifies the key drivers
of authentic corporate purpose and reveals
a questionnaire that companies can use to assess
themselves if they want to discover, define and
deliver their corporate purpose. With social media
conversations happening all the time across a variety
of platforms, by engaged consumers who are both
aware and concerned about the impact companies
have on society, a strongly articulated corporate
purpose helps protect the company’s brand values.
As one of the contributors to this study said
“While we are sleeping, someone else
is awake.”
However – only an authentic corporate purpose
will have a long-term positive impact on reputation.
An authentic corporate purpose guides business
decisions and is central to developing strategy.
It also plays a key role in guiding and motivating
employees. Communicating it internally and
externally is critical. But the purpose comes first –
it is not a communications tool.
As another contributor said: “Authentic corporate
purpose is one of the most important ways a
corporation in today’s world can communicate
in a world characterised by a barrage of ideas…
With the degree of information chaos, with
citizen journalists and content circulating on
digital media, if your purpose is not authentic,
you will be found out quickly.”
We live in a world where perceptions can be measured
and monitored and where managing reputation is a
key element of corporate strategy. This includes
managing and measuring corporate purpose. This
year’s report “Keeping it real” identifies for the first
time 12 key drivers of authentic corporate purpose,
and how an organisation can assess and measure
itself against those drivers. The result is a tool that
we believe will help corporate leaders and their teams
on the journey of developing, defining and delivering
a corporate purpose which is authentic for internal
and external stakeholders.
Of the 12 drivers, there are those that relate to
identity and those that relate to image. The best
conditions for an authentic corporate purpose occur
when identity and image are aligned. This means that
the way the organisation projects itself to its external
constituencies, including customers, regulators and
media, has to fit with the way it internally defines its
central and enduring mission.
And finally – as one of the contributors summed it
up – “It is all about leadership”. The report found
that leadership accounts for almost 50% of the
variance in perceptions of authenticity. Effective
leaders who are both convinced and convincing set
the corporate purpose agenda and ensure that an
organisation stays its course and embeds and lives
its purpose over the long-term.
As always we are grateful to the executives and
companies that agreed to participate in our
research and share richly of their own experiences.
They all agreed that “keeping it real” is essential to
communicating and building trust with audiences
today. I hope the resulting framework and tool will
help guide corporations as they begin or continue
their own journeys of corporate purpose.
Jeremy Galbraith
CEO Burson-Marsteller EMEA
Global Chief Strategy Officer
1. Burson-Marsteller Corporate Perception Indicator 2014 - Six years after the 2008 Financial Crisis, Burson-Marsteller and CNBC surveyed 25,000 individuals
in the general public and more than 1,800 corporate executives in 25 markets around the world.
2. MD/Burson-Marsteller Report The Power of Purpose, 2013
Over the last century, much has been written
about the corporate organisation’s “reason for
being” (or “raison d’être”). From early debates
about the fiduciary duties of the corporation to
more recent discussions regarding stakeholder
responsibilities, how an organisation’s leaders
position their company within a broader societal
context also reflects their own personal ideas
and beliefs.
The “corporate purpose” concept was first
developed by Chester Barnard, the original
management guru, in the 1930s and then
further refined by Jim Collins, Jerry Porras,
Richard Ellsworth and others in more recent
years. Over time, the term has come to be more
widely used – mostly by leading companies –
to express how an organisation sees its role in
society. However, as “corporate purpose” is
not yet a term utilized by all companies, a clear
definition is necessary. We therefore define
“corporate purpose” as follows:
Corporate purpose is a company’s core
"reason for being.” The organisation’s single
underlying objective unifies all stakeholders
and embodies its ultimate role in the broader
economic, societal and environmental context.
Corporate purpose is often communicated
through a company's mission or vision
statements, but it may also remain informal
and unarticulated. However, companies with
an implicit corporate purpose are missing out
on the true power of purpose which can unify
an organisation behind an identity and vision.
Since perception – built on awareness and
knowledge gained through experience, learning
and communication – is often reality, corporate
purpose messages must be carefully tuned to
indicators that demonstrate that the organisation
effectively ‘walks its talk’. Therefore, a truly
authentic corporate purpose is one where there
is full alignment between a company’s perceived
corporate purpose and the actual strategic
decisions and actions that are it takes. However,
if a firm’s perceived corporate purpose does
not match its actions, both internal and external
stakeholders will view corporate purpose with
mistrust and scepticism and perceive it as mere
“window dressing”. Clearly, this has knock-on
effects on the overall reputation of the firm,
leading to loss of brand value.
In the shadow of the recent and ongoing
financial crisis, public confidence in the
authenticity of any stated corporate purpose
that differs from the predominant profit-
maximising norm is increasingly met with
distrust. Therefore, we are compelled to
understand the drivers of authentic corporate
purpose better so that we can begin to heal
the rift between business and society.
The explicit objective of the study undertaken
at IMD was to uncover the drivers or “dimensions”
of an authentic corporate purpose. Based on
a quantitative survey of over 200+ executives
and in-depth qualitative interviews with 12
executives from organisations perceived as
having an authentic corporate purpose, a
number of findings were revealed as regards
embedding authenticity in corporate purpose
within the firm, and also anchoring it in
leadership across organisations. On the one
hand, the findings illustrate the challenges of
establishing an authentic corporate purpose in
organisations, and on the other hand, they
provide executives with a roadmap to achieving
an authentic corporate purpose for their firms.
Aileen Ionescu-Somers, PhD
Director, CSL Learning Platform, IMD Global
Center for Sustainability Leadership (CSL)
4 What is authentic
corporate purpose?
5
What makes corporate
purpose real?
Our most important premise for a “real” or
authentic corporate purpose is that it needs
to be central to the company strategy and not
simply a marketing or communications exercise
(IMD/Burson-Marsteller Report The Power
of Purpose, 2013).
What we have set out to do here is to dig deeper
into the drivers behind a truly authentic corporate
purpose. What key elements need to be present?
Do companies that are identified as having
authentic corporate purpose exhibit similar
characteristics? Could these be replicable for
other companies seeking to develop an authentic
corporate purpose for themselves?
The research unveils two types of dimension
behind corporate purpose: those involving the
definition of what the company stands for, i.e.
its identity; and those involving how the company
projects itself, i.e. its image.
With these dimensions defined, companies –
and indeed any organisation - can follow a path for
testing their potential for having a truly authentic
corporate purpose. Use of these dimensions for
measuring corporate purpose performance is
equally valid for those companies at the stage of
discovering or defining their identity as it is for
those who are some way down the corporate
purpose road and want to improve its delivery.
6
12 Key drivers
The Burson-Marsteller/IMD research identified
twelve key drivers of an authentic corporate
purpose, divided into those that relate to
identity and those relating to image. Within the
twelve core dimensions, the study grouped them
into a further four fundamental categories: leading,
stewarding, differentiating and delivering.
Our survey indicates that managers identified
awareness as the top dimension that organisations
need to have if they are to have a truly credible and
authentic corporate purpose. However, although
awareness is critical to authentic corporate purpose,
all twelve dimensions matter. Focusing on a handful
of dimensions is unlikely to overcome the scepticism
of internal and external stakeholders.
7
Identity and image
An organisation’s identity is about how an
organisation defines its central, distinctive
and enduring features.
Image is about how people outside the company,
notably customers, perceive the organisation.
Having an authentic image is also about being
distinct and recognized for your passion and
excellence, which can be attributed to a
company’s differentiation strategy.
The two broad concepts of identity and image
are a mirror reflection of each other: the
important insight for companies is that the best
conditions for an authentic corporate purpose
occur when identity and image are aligned.
The four dimensions grouped under the leading category (shown on the top right of the diagram) all
relate to how the company chooses to lead its interactions with its stakeholders. The concept here is
very much of an organisation pursuing external stakeholder dialogue in order to gauge societal interest
and to understand its impacts in an open way. It is striking that as many as four dimensions of an authentic
corporate purpose, including the study’s top rated dimension of awareness, combine to form the leading
category, indicating how important it is for authenticity that an organisation defines its identity through
a deliberately open and proactive process of external verification.
Balance means the company solicits and
objectively takes into account all relevant
information and points of view in its decision-
making, including views that challenge
deeply-held positions or which evoke its own
organisational limitations and shortcomings.
Several of the interviewees agreed stating that
“The holistic view is very important” and
that “it’s especially important to have this
holistic view of the company, society and
the environment it is acting in”.
A truly authentic company will be balanced by
not dismissing opposing views. There needs
to be space in the internal company strategy
discussion to consider whether a stakeholder
group taking a differing position critical of the
company is actually right. That NGO may be
saying something that your company does not
like to hear but is the NGO actually right?
For one interviewee “Internally, corporate
purpose creates a questioning process”.
This suggests that having a clear corporate
purpose can empower those with different views
in the company decision-making process.
This does not mean to say the company strategy
blows with the wind of stakeholder opinion.
Instead the purpose can act as an anchor.
As one interviewee stated, “Progressive
companies understand that you need to
embrace the chaos and this involves
standing behind purpose, really living up
to it and starting a dialogue”.
Leading
Balance
IDENTITY
To measure whether they are balanced,
companies should be asking themselves
questions such as whether they:
Solicit views that challenge its deeply held
positions;
Listen carefully to different points of view
before coming to a decision.
1
8 Identity and image
Awareness means that the company – through
direct interactions with its stakeholders – displays a
continual openness to acquire a deep understanding
of its own strengths and weaknesses, what drives
or motivates its actions and how it impacts society
and the environment and how it is perceived
by stakeholders.
With awareness the top scoring dimension in
IMD’s survey of corporate opinion leaders, all
that is incorporated in the term is critical for
authenticity. A company with its finger on the
pulse of stakeholder opinion is likely to be viewed
as authentic. Similar to a politician’s thirst for
opinion polling in the run up to an election,
companies need to pursue a never-ending quest
to understand stakeholder opinion. And this
means engaging with all relevant stakeholders.
As one corporate leader said, “We will listen
to anybody and meet with anybody”.
This can involve structured engagement with NGOs:
“Our sustainable sourcing advisory board
contains 10 external members from NGOs to
independent consultants. They come from their
own angles and also have criticism in how we
could do things even better”.
It can also mean structured dialogue through the
industry value chain: “You always try to really get
more industries around the table to work on
sustainable solutions in value chains”.
Part of awareness related to the company’s impacts
on stakeholders and the environment. Here the
directional purpose of the organisation needs to be
based on “the attitudes and true belief in what
the future looks like and what’s your role as
a company in society. So if you feel that a
company has a role to play in society and if
you know that you run a business with longevity
in mind then there is no other way than doing
it in a sustainable way, and you need to think
about how to do it better than today and
you need to keep challenging yourself.”
Awareness
To test how aware they are of their impact on
society and how they are perceived, companies
should be asking themselves questions such as:
Does the company seek feedback to improve
its interactions with stakeholders?
Does the company accurately describe
how stakeholders view its actions?
2
Transparency means the company promotes
trust by openly sharing information with its
stakeholders, demonstrating coherence between
what it commits to and it actually does, is honest
and truthful about its activities, admits mistakes
and does not pretend to be something it is not.
Corporations will be trusted if they are viewed
as having clearly defined values and their
behavior lives up to those values. The importance
of a strong set of values was underlined by one
of the respondents to the study: “The most
important thing is the expression of
the corporate purpose and its values”.
In times of low public trust in companies, it is
understandable that transparency scored strongly
with the corporate opinion leaders interviewed,
coming out as the third highest scoring dimension
demonstrating authenticity. If a company fails to
live up to its promises and does not demonstrate
coherence between “talk” and “walk”, it is unlikely
to be seen to be living up to its purpose.
Being open about the challenges that the company
faces means that it will have a greater chance to
be believed by its stakeholders. If all a company
communicates is the positive, there will be few who
believe that it is authentic to its purpose. As one
corporate interviewee commented, “You bring
out your dilemmas. You really talk about the
difficulties that you have; openness and
transparency and willingness to debate
the difficult issues”.
Transparency
So companies wanting to test how transparent
they are in living their corporate purpose
should be asking themselves whether they:
Tell the truth about their values, behaviours
and actions?
Admit mistakes when they are made?
3
The second group, the stewarding category - top left in the main diagram – brings together the three core
dimensions of corporate purpose that reflect how an organisation sees its role as a steward with responsibilities
in the broader environmental and social context.
Stewarding
IDENTITY
9Identity and image
Self-regulation means the company makes
decisions that are true to its stated corporate
purpose and that exhibit restraint with regard to
purely pursuing growth and profit ambitions based
on strong internal moral standards and values
that promote legal and ethical norms.
Our corporate interviewees confessed to tensions
between staying faithful to the longer term purpose
of the company while faced with shorter term
challenges. What is key is that the “Corporate
purpose has to relate to the essence of the
company” and also that the values of the
employees making the everyday decisions need to
reflect that purpose. This means that the right peo-
ple need to be brought on board: “If you’re the
smartest person in the world, and you don’t
have the right value set, you don’t get hired”.
With that in place “Authentic means that it
resonates with everyone in the company
and resonates with your own values and
beliefs, therefore executing that purpose
comes naturally”. In that way, decisions are
more likely to live up to the stated purpose.
Self-regulation
Companies looking to understand better
whether they are good at Self-Regulation
should ask themselves whether they:
Resist pressure to do things contrary to their
corporate purpose?
Act according to their corporate purpose
even if others criticize them for doing so?
4
Connectedness means the company is anchored
to a business context that aims to contribute to
societal wellbeing by protecting and improving the
environment and quality of life while respecting
societal values, norms and traditions.
With a political leadership vacuum and foundations
for business such as economic growth and societal
progress under challenge, corporations need
increasingly to communicate and play an active
role in society. It is not therefore surprising that
corporations often see their role in terms of its
contribution to society at large: “The clear
purpose is whatever we do should serve
society.” This implies that the corporation’s
purpose goes beyond profit and loss and exists
for a higher purpose: “I do believe that in
whatever industry you are in, there must be
an opportunity to articulate a much broader
purpose, or a much broader purpose,
than I think you see as of today in general”.
A company’s relationship with society can also
be seen the other way around in that it needs
permission from society or a societal acceptance
in order to do business: “We strive and we fight
for it and we want to be a solid contributor to
society. That is also part of it, this notion that
we are part of the whole, this should also be
reflected. We have to deserve our license
to operate, authentically”.
Connectedness5
Companies assessing their level of
connectedness need to ask themselves:
Does the organisation aim to protect
and improve the quality of the local
environment in which it operates?
Does the organisation respect the quality
of life, values, norms and traditions of the
local communities which it serves?
10 Identity and image
Long-term orientation means the company plans
for the long term by focusing on sustainable goals,
understands the interdependence of current and
future benefits and maintains long-term relationships.
Companies that plan for the long term understand
the interdependence of current and future benefits
and maintain long-term relationships are likely to
be able to be guided by a broader purpose.
“You aim for the longer-term not for the next few
years” was a typical view of our corporate interviewees
in general and also for many specifically in terms of
resource management: “We are really looking into
resource availability in the long-term”.
And it was a widely held view that “A corporate
purpose (itself) cannot be short-lived”.
Rather, “A company’s purpose needs to be
built over the long-term in order to be really
part of the decision-making process, for people
to really believe in rather than to put it down
to greenwashing”.
Long-term orientation6
To test their long-term orientation this,
companies can ask themselves:
Does the company give priority to
maintaining a long-term relationship with
its stakeholders?
Does the company have a specific
long-term focus?
Embeddedness means the company’s choices and
actions are partly generated by the actions and
expected behavior of other actors; thus, it remains
close to its stakeholders who enable it to remain
connected to the world around it.
Co-creation with stakeholders, whereby some of the
company’s actions are influenced by external actors,
is likely to result in deep long-term engagement and
authentic behavior. Think of some of the resource
sustainability platforms which brought companies
and NGOs together - many continue today with
strong momentum. This is recognition that no
company is an island. As one of our interviewees
stated “You always try to really get more
industries around the table to work on
sustainable solutions in value chains and then
your impacts can be much, much bigger”.
Embeddedness7
Companies who want to test the dimension
of embeddedness should ask themselves
questions such as:
Does the company remain close to
its stakeholders?
Does the company have a sense of
connectedness with society?
The first group of dimensions under Image are linked to differentiating - the firm’s ability to be seen as
unique and distinct from other firms in the marketplace. Projecting a specific corporate purpose can be one
effective way for a company to differentiate itself compared to its competitors with many of its audiences,
both internal in terms of employees and recruitment and external ranging from communities to investors.
Differentiating
IMAGE
Reputation is put forward as a differentiating
dimension in that it means the company can gauge
how outsiders are judging it, has a good reputation in
the community, among customers and in the indus-
try as a whole, is actively involved in the community
and is known as a good place to work.
An effective corporate purpose can help
drive recruitment: “What attracts talent is
the belief that the organisation is working
on a broader cause and is trying
to effect positive change in various
aspects of the world”.
Reputation8
11Identity and image
Companies wanting to test their reputation should
ask questions such as whether they are:
Actively involved in the community;
Attract attention because they are known
as a good place to work.
Passion means the company has a sense of purpose
that inspires a particular sense of passion that
people like, find important and in which they invest
time and energy. The company appears highly
motivated to excel in everything it does.
Corporate purpose can help create a focal point
for an enhanced energy around the organisation:
“I found that by establishing corporate purpose,
we drew people together and there is a ‘rallying
cry’ moment where it all clicks into place.
You know instantly whether it is right.”
Making the corporate purpose live, bringing it in
a visual way into the everyday work “contributes
to the passion behind what people in
the business do”.
Passion9
Companies wanting to test whether their purpose
inspires a sense of passion about the company
should ask if the company:
Appears highly motivated to excel in every-
thing it does;
Is a compassionate organisation.
Originality is the third and final dimension for a
differentiating corporate purpose. It means the
company has a unique corporate purpose that
stands out because it is fresh, creative, original and
different to that of other companies in the same
industry, and it cannot be easily replicated.
By communicating an original corporate
purpose, “people understand”, one corporate
communications leader conveyed, “that this is our
unique point that we own in the industry”.
This can have a benefit from an internal stakeholder
point of view as well. From an internal perspective,
“if you’re able to clarify (your corporate
purpose) so the organisation can live it,
they understand that this is part of our
uniqueness”. In so doing, corporate purpose
becomes “an asset”.
Coming up with an original corporate purpose
involves taking a hard look at how your company
has a differentiated offer and culture.
“One thing I learned is to differentiate our
business from others. If you take the code of
conduct of the Fortune 500, it’s more or less
copy-paste, including the mission statements.
The art is to break it down to your business and
if you can deliver to these promises.”
Originality10
And a reputation can disappear quickly due to
inauthentic corporate behaviour: “Inauthenticity
erodes trust. You have to build credibility.
It takes a long time to build credibility, but
just one error to wipe it out”.
Companies that want to test originality in their
corporate purpose should ask to what extent
they have a corporate purpose:
That is different from other companies;
That stands out from other companies in
the same industry.
12 Identity and image
The final pair of dimensions are focused on delivering – that is how external constituents perceive a firm’s
ability to maintain its commitments.
Delivering
IMAGE
Reliability means the company consistently
pursues its purpose over time, making promises
and delivering on them, no matter how challenging
the business context, while either meeting or
exceeding its stated objectives.
The challenge to be reliable with one’s corporate
purpose over time is considerable given the waves
of pressure and new challenges companies face.
This was summed up by one interviewee as follows:
“Making the numbers is the biggest barrier all
the time. I’ve heard stories since forever about
how difficult the market has been for the last 5
years and how this has changed what we can
do and how we can do it. But somehow it hasn't
interfered with this idea (of a corporate purpose)
because people understand that this is our unique
point that we own in the industry. And so they
understand that that’s not the right thing to let go.”
Reliability11
Companies wanting to test reliability in
delivering their corporate purpose should ask
to what extent:
They deliver on what they promise;
They make promises that are credible.
Consistency means the company honors its heritage,
actively creating connections with its origins, and also
creating an internal consistency and continuity.
It was remarkable how, almost without exception, the
corporate opinion leaders interviewed in the study made
reference, without prompting, to their company’s heritage
when tracing the history of their corporate purpose:
“Corporate purpose goes back to the founding
of the company”.
“The vision is not just from the management team
today, it goes at least 15 years back”.
“It is about the principles and the values that are
driving this company for 70 years”.
Much accent was stressed on these long-held visions
being “still alive across the board and across the
company”. Indeed one interviewee stated that today
“All employees ,know the (central guiding)
statement by our founder more than 50 years ago
on resource efficiency. He is no longer here to
dismiss us but we basically have been using that
statement in many ways”.
This means that there is an ongoing dynamic whereby
not only “It is important to document the corporate
purpose but also to institutionalize it within the
company… at all levels.”
Consistency12
Companies seeking to test consistency of
corporate purpose should ask whether they:
Have a clearly articulated corporate purpose
that they pursue;
Have a corporate purpose that is consistent
over time.
13
Highlights from our corporate opinion leader
interviews regarding leadership include:
“It’s all about leadership”.
“It’s leading by behavior and
by example”.
“The role of leadership is to ensure
that the company is walking the talk”.
“If you have the privilege on the top of
the company, to have leaders who live
the values and determine the strategy,
it’s much easier to follow a corporate
purpose”.
“Leadership is absolutely key.
The initiator and the challenger and
the need to keep challenging the
organisation to go an additional few
steps, or taking bigger steps to make
progress. If leadership let it go, then
the activities would go with it and it
wouldn’t happen. Leadership really
needs to lead by example.”
Leadership is critical
Strong and committed leadership is crucial
to authenticity.
Our study found that leadership accounts for almost
50% of the variance in perceptions of authenticity.
This is not surprising since leaders set both the
direction and overall objectives of the company.
Leaders also personify the company’s identity and
image through communications with both internal
and external stakeholders.
This supports the idea that corporate purpose must
be consistent with both corporate leadership and
action (i.e. both “walking the talk AND talking the
walk”). Leaders who are perceived to be effective,
dynamic and leading successful operations are much
more likely to be running organisations that have
an authentic corporate purpose.
However, in a complex and uncertain global
business context –as organisations grow in scale
and across territories – it is increasingly challenging
for leaders to ensure that an authentic corporate
purpose is maintained.
14
KEEPING IT REAL
How authentic is your corporate purpose?
Corporate purpose is an organisation’s single underlying objective which unifies all
stakeholders and embodies its ultimate role in the broader economic, societal and
environmental context.
Authenticity has both internal and external
components and an authentic corporate purpose
is both how the organisation sees itself as well
as how others see the organisation.
First empirical study
of authenticity in
corporate purpose
designed to produce
a roadmap for executives
by Burson-Marsteller/IMD.
Living an authentic corporate
purpose is challenging as
companies seek to
balance short-term
financial considerations
with their long-term
values and identity.
AWARENESS
This was the top dimension
identified as driving
authenticity – meaning
that a company has an
understanding of its own
strengths and weaknesses,
what drives or motives its
actions and how this affects
key stakeholders and
the environment.
PASSION &
EMBEDDEDNESS
Passion means the company has a
sense of purpose that people are
inspired by, find important and in
which they invest time and energy.
Embeddedness means there
is co-creation with stakeholders,
whereby some of the company’s
actions are influenced by external
actors, It is likely to result in deep
long-term engagement and
authentic behavior.
Leadership at all
levels needs to live
the purpose.
Having a well-communicated
corporate purpose is not enough.
It has to be real
and authentic.
12 KEY DRIVERS OF AUTHENTIC
CORPORATE PURPOSE
IDENTITY AND IMAGE
Authenticity of corporate purpose happens when there is alignment between a firm’s perceived and
stated corporate purpose and the actual strategic decisions and actions a firm takes.
1
50%
of the variance in
perceptions of authenticity
is driven by leadership.
1st
2 3&
15
Methodology
The explicit objective of the 2015
Burson-Marsteller/IMD study is to uncover
the drivers of an authentic corporate purpose.
The findings are based on an extensive literature
review, a quantitative survey of 200+ executives
and in-depth qualitative interviews with ten
executives from organisations perceived as
having an authentic corporate purpose.
Respondents of the qualitative survey
included the following industries:
Packaging, Technology, Food & Beverage,
Cement, Pharmaceutical, Automotive,
Energy & Environmental Affairs,
Chemicals and health
The Burson-Marsteller diagnostic tool
is designed to enable business leaders to
explore each of the authenticity dimensions in
a comprehensive and intuitive way. The end
result of this analysis will form the guidelines
to chart your company’s progress towards
an authentic corporate purpose.
For more information please contact:
Lawrie McLaren
Chairman, Corporate Purpose
Lawrie.mclaren@bm.com
Burson-Marsteller
diagnostic tool
 Keeping it real - How authentic is your Corporate Purpose?

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Keeping it real - How authentic is your Corporate Purpose?

  • 1. KEEPING IT REAL How authentic is your corporate purpose? www.powerofpurpose.eu
  • 2. 2 Based in Switzerland, IMD is ranked first in open executive programs worldwide (Financial Times, 2012 & 2013) and first in executive education outside the US (Financial Times 2008-2013). With more than 60 years’ experience, IMD takes a “real world, real learning” approach to executive education (www.imd.ch), applying an open, collaborative and pioneering approach to everything that it does. For this reason, IMD’s newly launched Global Center for Corporate Sustainability (CSL) has a research and learning platform with an active membership of global companies and other partners such as NGOs, international organisations and think-tanks focusing on promoting innovation for sustainability. The CSL Platform pursues a mission of contributing to leadership in sustainable development by focusing on mainstreaming social and environmental issues in corporate strategies and providing knowledge- sharing platforms to promote strategic innovation and best practice in sustainability initiatives (www.imd.ch/csl-learning-platform). Cover image: ©Alexis Robin Original Artwork Burson-Marsteller, established in 1953, is a leading global public relations and communications firm. It provides clients with strategic thinking and program execution across a full range of public relations, public affairs, reputation and crisis management, advertising and digital strategies. The firm’s seamless worldwide network consists of 73 offices and 85 affiliate offices, together operating in 110 countries across six continents. Burson-Marsteller is a unit of WPP, the world’s leading communications services network. Our purpose is to help our clients discover, define and deliver their corporate purpose. For more information, please visit bm.com.
  • 3. 3Keeping it real Six years after the financial crisis of 2008 shook public confidence in corporations, corporate reputation is showing signs of improvement – but significant challenges remain. Less than a quarter of the general public in the developed world say that corporations were humbled by the financial crisis, and even C-Suite business leaders overwhelmingly agree with the view that corporations are not acting more responsibly than before1 . There are also real challenges for business leaders, who are still mainly seen to be motivated by greed and maximizing profits for their corporations and themselves. This means that anything they say is viewed with scepticism. So how do corporations and their leaders overcome this mistrust and come across as “authentic”, or real? We have been working with IMD business school since 2008 on corporate purpose. Our perspective is that companies who are true to a raison d’etre which goes beyond short-term financial considerations, and where stakeholders understand not only what the company does but also the core principles guiding its work, have a competitive advantage. IMD research shows that a strong and well communicated corporate purpose can impact financial performance by up to 17%2 . It also strengthens a company at times of change and crisis, by providing a common vision around which to rally its key stakeholders and engage its employees. This year’s study identifies the key drivers of authentic corporate purpose and reveals a questionnaire that companies can use to assess themselves if they want to discover, define and deliver their corporate purpose. With social media conversations happening all the time across a variety of platforms, by engaged consumers who are both aware and concerned about the impact companies have on society, a strongly articulated corporate purpose helps protect the company’s brand values. As one of the contributors to this study said “While we are sleeping, someone else is awake.” However – only an authentic corporate purpose will have a long-term positive impact on reputation. An authentic corporate purpose guides business decisions and is central to developing strategy. It also plays a key role in guiding and motivating employees. Communicating it internally and externally is critical. But the purpose comes first – it is not a communications tool. As another contributor said: “Authentic corporate purpose is one of the most important ways a corporation in today’s world can communicate in a world characterised by a barrage of ideas… With the degree of information chaos, with citizen journalists and content circulating on digital media, if your purpose is not authentic, you will be found out quickly.” We live in a world where perceptions can be measured and monitored and where managing reputation is a key element of corporate strategy. This includes managing and measuring corporate purpose. This year’s report “Keeping it real” identifies for the first time 12 key drivers of authentic corporate purpose, and how an organisation can assess and measure itself against those drivers. The result is a tool that we believe will help corporate leaders and their teams on the journey of developing, defining and delivering a corporate purpose which is authentic for internal and external stakeholders. Of the 12 drivers, there are those that relate to identity and those that relate to image. The best conditions for an authentic corporate purpose occur when identity and image are aligned. This means that the way the organisation projects itself to its external constituencies, including customers, regulators and media, has to fit with the way it internally defines its central and enduring mission. And finally – as one of the contributors summed it up – “It is all about leadership”. The report found that leadership accounts for almost 50% of the variance in perceptions of authenticity. Effective leaders who are both convinced and convincing set the corporate purpose agenda and ensure that an organisation stays its course and embeds and lives its purpose over the long-term. As always we are grateful to the executives and companies that agreed to participate in our research and share richly of their own experiences. They all agreed that “keeping it real” is essential to communicating and building trust with audiences today. I hope the resulting framework and tool will help guide corporations as they begin or continue their own journeys of corporate purpose. Jeremy Galbraith CEO Burson-Marsteller EMEA Global Chief Strategy Officer 1. Burson-Marsteller Corporate Perception Indicator 2014 - Six years after the 2008 Financial Crisis, Burson-Marsteller and CNBC surveyed 25,000 individuals in the general public and more than 1,800 corporate executives in 25 markets around the world. 2. MD/Burson-Marsteller Report The Power of Purpose, 2013
  • 4. Over the last century, much has been written about the corporate organisation’s “reason for being” (or “raison d’être”). From early debates about the fiduciary duties of the corporation to more recent discussions regarding stakeholder responsibilities, how an organisation’s leaders position their company within a broader societal context also reflects their own personal ideas and beliefs. The “corporate purpose” concept was first developed by Chester Barnard, the original management guru, in the 1930s and then further refined by Jim Collins, Jerry Porras, Richard Ellsworth and others in more recent years. Over time, the term has come to be more widely used – mostly by leading companies – to express how an organisation sees its role in society. However, as “corporate purpose” is not yet a term utilized by all companies, a clear definition is necessary. We therefore define “corporate purpose” as follows: Corporate purpose is a company’s core "reason for being.” The organisation’s single underlying objective unifies all stakeholders and embodies its ultimate role in the broader economic, societal and environmental context. Corporate purpose is often communicated through a company's mission or vision statements, but it may also remain informal and unarticulated. However, companies with an implicit corporate purpose are missing out on the true power of purpose which can unify an organisation behind an identity and vision. Since perception – built on awareness and knowledge gained through experience, learning and communication – is often reality, corporate purpose messages must be carefully tuned to indicators that demonstrate that the organisation effectively ‘walks its talk’. Therefore, a truly authentic corporate purpose is one where there is full alignment between a company’s perceived corporate purpose and the actual strategic decisions and actions that are it takes. However, if a firm’s perceived corporate purpose does not match its actions, both internal and external stakeholders will view corporate purpose with mistrust and scepticism and perceive it as mere “window dressing”. Clearly, this has knock-on effects on the overall reputation of the firm, leading to loss of brand value. In the shadow of the recent and ongoing financial crisis, public confidence in the authenticity of any stated corporate purpose that differs from the predominant profit- maximising norm is increasingly met with distrust. Therefore, we are compelled to understand the drivers of authentic corporate purpose better so that we can begin to heal the rift between business and society. The explicit objective of the study undertaken at IMD was to uncover the drivers or “dimensions” of an authentic corporate purpose. Based on a quantitative survey of over 200+ executives and in-depth qualitative interviews with 12 executives from organisations perceived as having an authentic corporate purpose, a number of findings were revealed as regards embedding authenticity in corporate purpose within the firm, and also anchoring it in leadership across organisations. On the one hand, the findings illustrate the challenges of establishing an authentic corporate purpose in organisations, and on the other hand, they provide executives with a roadmap to achieving an authentic corporate purpose for their firms. Aileen Ionescu-Somers, PhD Director, CSL Learning Platform, IMD Global Center for Sustainability Leadership (CSL) 4 What is authentic corporate purpose?
  • 5. 5 What makes corporate purpose real? Our most important premise for a “real” or authentic corporate purpose is that it needs to be central to the company strategy and not simply a marketing or communications exercise (IMD/Burson-Marsteller Report The Power of Purpose, 2013). What we have set out to do here is to dig deeper into the drivers behind a truly authentic corporate purpose. What key elements need to be present? Do companies that are identified as having authentic corporate purpose exhibit similar characteristics? Could these be replicable for other companies seeking to develop an authentic corporate purpose for themselves? The research unveils two types of dimension behind corporate purpose: those involving the definition of what the company stands for, i.e. its identity; and those involving how the company projects itself, i.e. its image. With these dimensions defined, companies – and indeed any organisation - can follow a path for testing their potential for having a truly authentic corporate purpose. Use of these dimensions for measuring corporate purpose performance is equally valid for those companies at the stage of discovering or defining their identity as it is for those who are some way down the corporate purpose road and want to improve its delivery.
  • 6. 6 12 Key drivers The Burson-Marsteller/IMD research identified twelve key drivers of an authentic corporate purpose, divided into those that relate to identity and those relating to image. Within the twelve core dimensions, the study grouped them into a further four fundamental categories: leading, stewarding, differentiating and delivering. Our survey indicates that managers identified awareness as the top dimension that organisations need to have if they are to have a truly credible and authentic corporate purpose. However, although awareness is critical to authentic corporate purpose, all twelve dimensions matter. Focusing on a handful of dimensions is unlikely to overcome the scepticism of internal and external stakeholders.
  • 7. 7 Identity and image An organisation’s identity is about how an organisation defines its central, distinctive and enduring features. Image is about how people outside the company, notably customers, perceive the organisation. Having an authentic image is also about being distinct and recognized for your passion and excellence, which can be attributed to a company’s differentiation strategy. The two broad concepts of identity and image are a mirror reflection of each other: the important insight for companies is that the best conditions for an authentic corporate purpose occur when identity and image are aligned. The four dimensions grouped under the leading category (shown on the top right of the diagram) all relate to how the company chooses to lead its interactions with its stakeholders. The concept here is very much of an organisation pursuing external stakeholder dialogue in order to gauge societal interest and to understand its impacts in an open way. It is striking that as many as four dimensions of an authentic corporate purpose, including the study’s top rated dimension of awareness, combine to form the leading category, indicating how important it is for authenticity that an organisation defines its identity through a deliberately open and proactive process of external verification. Balance means the company solicits and objectively takes into account all relevant information and points of view in its decision- making, including views that challenge deeply-held positions or which evoke its own organisational limitations and shortcomings. Several of the interviewees agreed stating that “The holistic view is very important” and that “it’s especially important to have this holistic view of the company, society and the environment it is acting in”. A truly authentic company will be balanced by not dismissing opposing views. There needs to be space in the internal company strategy discussion to consider whether a stakeholder group taking a differing position critical of the company is actually right. That NGO may be saying something that your company does not like to hear but is the NGO actually right? For one interviewee “Internally, corporate purpose creates a questioning process”. This suggests that having a clear corporate purpose can empower those with different views in the company decision-making process. This does not mean to say the company strategy blows with the wind of stakeholder opinion. Instead the purpose can act as an anchor. As one interviewee stated, “Progressive companies understand that you need to embrace the chaos and this involves standing behind purpose, really living up to it and starting a dialogue”. Leading Balance IDENTITY To measure whether they are balanced, companies should be asking themselves questions such as whether they: Solicit views that challenge its deeply held positions; Listen carefully to different points of view before coming to a decision. 1
  • 8. 8 Identity and image Awareness means that the company – through direct interactions with its stakeholders – displays a continual openness to acquire a deep understanding of its own strengths and weaknesses, what drives or motivates its actions and how it impacts society and the environment and how it is perceived by stakeholders. With awareness the top scoring dimension in IMD’s survey of corporate opinion leaders, all that is incorporated in the term is critical for authenticity. A company with its finger on the pulse of stakeholder opinion is likely to be viewed as authentic. Similar to a politician’s thirst for opinion polling in the run up to an election, companies need to pursue a never-ending quest to understand stakeholder opinion. And this means engaging with all relevant stakeholders. As one corporate leader said, “We will listen to anybody and meet with anybody”. This can involve structured engagement with NGOs: “Our sustainable sourcing advisory board contains 10 external members from NGOs to independent consultants. They come from their own angles and also have criticism in how we could do things even better”. It can also mean structured dialogue through the industry value chain: “You always try to really get more industries around the table to work on sustainable solutions in value chains”. Part of awareness related to the company’s impacts on stakeholders and the environment. Here the directional purpose of the organisation needs to be based on “the attitudes and true belief in what the future looks like and what’s your role as a company in society. So if you feel that a company has a role to play in society and if you know that you run a business with longevity in mind then there is no other way than doing it in a sustainable way, and you need to think about how to do it better than today and you need to keep challenging yourself.” Awareness To test how aware they are of their impact on society and how they are perceived, companies should be asking themselves questions such as: Does the company seek feedback to improve its interactions with stakeholders? Does the company accurately describe how stakeholders view its actions? 2 Transparency means the company promotes trust by openly sharing information with its stakeholders, demonstrating coherence between what it commits to and it actually does, is honest and truthful about its activities, admits mistakes and does not pretend to be something it is not. Corporations will be trusted if they are viewed as having clearly defined values and their behavior lives up to those values. The importance of a strong set of values was underlined by one of the respondents to the study: “The most important thing is the expression of the corporate purpose and its values”. In times of low public trust in companies, it is understandable that transparency scored strongly with the corporate opinion leaders interviewed, coming out as the third highest scoring dimension demonstrating authenticity. If a company fails to live up to its promises and does not demonstrate coherence between “talk” and “walk”, it is unlikely to be seen to be living up to its purpose. Being open about the challenges that the company faces means that it will have a greater chance to be believed by its stakeholders. If all a company communicates is the positive, there will be few who believe that it is authentic to its purpose. As one corporate interviewee commented, “You bring out your dilemmas. You really talk about the difficulties that you have; openness and transparency and willingness to debate the difficult issues”. Transparency So companies wanting to test how transparent they are in living their corporate purpose should be asking themselves whether they: Tell the truth about their values, behaviours and actions? Admit mistakes when they are made? 3
  • 9. The second group, the stewarding category - top left in the main diagram – brings together the three core dimensions of corporate purpose that reflect how an organisation sees its role as a steward with responsibilities in the broader environmental and social context. Stewarding IDENTITY 9Identity and image Self-regulation means the company makes decisions that are true to its stated corporate purpose and that exhibit restraint with regard to purely pursuing growth and profit ambitions based on strong internal moral standards and values that promote legal and ethical norms. Our corporate interviewees confessed to tensions between staying faithful to the longer term purpose of the company while faced with shorter term challenges. What is key is that the “Corporate purpose has to relate to the essence of the company” and also that the values of the employees making the everyday decisions need to reflect that purpose. This means that the right peo- ple need to be brought on board: “If you’re the smartest person in the world, and you don’t have the right value set, you don’t get hired”. With that in place “Authentic means that it resonates with everyone in the company and resonates with your own values and beliefs, therefore executing that purpose comes naturally”. In that way, decisions are more likely to live up to the stated purpose. Self-regulation Companies looking to understand better whether they are good at Self-Regulation should ask themselves whether they: Resist pressure to do things contrary to their corporate purpose? Act according to their corporate purpose even if others criticize them for doing so? 4 Connectedness means the company is anchored to a business context that aims to contribute to societal wellbeing by protecting and improving the environment and quality of life while respecting societal values, norms and traditions. With a political leadership vacuum and foundations for business such as economic growth and societal progress under challenge, corporations need increasingly to communicate and play an active role in society. It is not therefore surprising that corporations often see their role in terms of its contribution to society at large: “The clear purpose is whatever we do should serve society.” This implies that the corporation’s purpose goes beyond profit and loss and exists for a higher purpose: “I do believe that in whatever industry you are in, there must be an opportunity to articulate a much broader purpose, or a much broader purpose, than I think you see as of today in general”. A company’s relationship with society can also be seen the other way around in that it needs permission from society or a societal acceptance in order to do business: “We strive and we fight for it and we want to be a solid contributor to society. That is also part of it, this notion that we are part of the whole, this should also be reflected. We have to deserve our license to operate, authentically”. Connectedness5 Companies assessing their level of connectedness need to ask themselves: Does the organisation aim to protect and improve the quality of the local environment in which it operates? Does the organisation respect the quality of life, values, norms and traditions of the local communities which it serves?
  • 10. 10 Identity and image Long-term orientation means the company plans for the long term by focusing on sustainable goals, understands the interdependence of current and future benefits and maintains long-term relationships. Companies that plan for the long term understand the interdependence of current and future benefits and maintain long-term relationships are likely to be able to be guided by a broader purpose. “You aim for the longer-term not for the next few years” was a typical view of our corporate interviewees in general and also for many specifically in terms of resource management: “We are really looking into resource availability in the long-term”. And it was a widely held view that “A corporate purpose (itself) cannot be short-lived”. Rather, “A company’s purpose needs to be built over the long-term in order to be really part of the decision-making process, for people to really believe in rather than to put it down to greenwashing”. Long-term orientation6 To test their long-term orientation this, companies can ask themselves: Does the company give priority to maintaining a long-term relationship with its stakeholders? Does the company have a specific long-term focus? Embeddedness means the company’s choices and actions are partly generated by the actions and expected behavior of other actors; thus, it remains close to its stakeholders who enable it to remain connected to the world around it. Co-creation with stakeholders, whereby some of the company’s actions are influenced by external actors, is likely to result in deep long-term engagement and authentic behavior. Think of some of the resource sustainability platforms which brought companies and NGOs together - many continue today with strong momentum. This is recognition that no company is an island. As one of our interviewees stated “You always try to really get more industries around the table to work on sustainable solutions in value chains and then your impacts can be much, much bigger”. Embeddedness7 Companies who want to test the dimension of embeddedness should ask themselves questions such as: Does the company remain close to its stakeholders? Does the company have a sense of connectedness with society? The first group of dimensions under Image are linked to differentiating - the firm’s ability to be seen as unique and distinct from other firms in the marketplace. Projecting a specific corporate purpose can be one effective way for a company to differentiate itself compared to its competitors with many of its audiences, both internal in terms of employees and recruitment and external ranging from communities to investors. Differentiating IMAGE Reputation is put forward as a differentiating dimension in that it means the company can gauge how outsiders are judging it, has a good reputation in the community, among customers and in the indus- try as a whole, is actively involved in the community and is known as a good place to work. An effective corporate purpose can help drive recruitment: “What attracts talent is the belief that the organisation is working on a broader cause and is trying to effect positive change in various aspects of the world”. Reputation8
  • 11. 11Identity and image Companies wanting to test their reputation should ask questions such as whether they are: Actively involved in the community; Attract attention because they are known as a good place to work. Passion means the company has a sense of purpose that inspires a particular sense of passion that people like, find important and in which they invest time and energy. The company appears highly motivated to excel in everything it does. Corporate purpose can help create a focal point for an enhanced energy around the organisation: “I found that by establishing corporate purpose, we drew people together and there is a ‘rallying cry’ moment where it all clicks into place. You know instantly whether it is right.” Making the corporate purpose live, bringing it in a visual way into the everyday work “contributes to the passion behind what people in the business do”. Passion9 Companies wanting to test whether their purpose inspires a sense of passion about the company should ask if the company: Appears highly motivated to excel in every- thing it does; Is a compassionate organisation. Originality is the third and final dimension for a differentiating corporate purpose. It means the company has a unique corporate purpose that stands out because it is fresh, creative, original and different to that of other companies in the same industry, and it cannot be easily replicated. By communicating an original corporate purpose, “people understand”, one corporate communications leader conveyed, “that this is our unique point that we own in the industry”. This can have a benefit from an internal stakeholder point of view as well. From an internal perspective, “if you’re able to clarify (your corporate purpose) so the organisation can live it, they understand that this is part of our uniqueness”. In so doing, corporate purpose becomes “an asset”. Coming up with an original corporate purpose involves taking a hard look at how your company has a differentiated offer and culture. “One thing I learned is to differentiate our business from others. If you take the code of conduct of the Fortune 500, it’s more or less copy-paste, including the mission statements. The art is to break it down to your business and if you can deliver to these promises.” Originality10 And a reputation can disappear quickly due to inauthentic corporate behaviour: “Inauthenticity erodes trust. You have to build credibility. It takes a long time to build credibility, but just one error to wipe it out”. Companies that want to test originality in their corporate purpose should ask to what extent they have a corporate purpose: That is different from other companies; That stands out from other companies in the same industry.
  • 12. 12 Identity and image The final pair of dimensions are focused on delivering – that is how external constituents perceive a firm’s ability to maintain its commitments. Delivering IMAGE Reliability means the company consistently pursues its purpose over time, making promises and delivering on them, no matter how challenging the business context, while either meeting or exceeding its stated objectives. The challenge to be reliable with one’s corporate purpose over time is considerable given the waves of pressure and new challenges companies face. This was summed up by one interviewee as follows: “Making the numbers is the biggest barrier all the time. I’ve heard stories since forever about how difficult the market has been for the last 5 years and how this has changed what we can do and how we can do it. But somehow it hasn't interfered with this idea (of a corporate purpose) because people understand that this is our unique point that we own in the industry. And so they understand that that’s not the right thing to let go.” Reliability11 Companies wanting to test reliability in delivering their corporate purpose should ask to what extent: They deliver on what they promise; They make promises that are credible. Consistency means the company honors its heritage, actively creating connections with its origins, and also creating an internal consistency and continuity. It was remarkable how, almost without exception, the corporate opinion leaders interviewed in the study made reference, without prompting, to their company’s heritage when tracing the history of their corporate purpose: “Corporate purpose goes back to the founding of the company”. “The vision is not just from the management team today, it goes at least 15 years back”. “It is about the principles and the values that are driving this company for 70 years”. Much accent was stressed on these long-held visions being “still alive across the board and across the company”. Indeed one interviewee stated that today “All employees ,know the (central guiding) statement by our founder more than 50 years ago on resource efficiency. He is no longer here to dismiss us but we basically have been using that statement in many ways”. This means that there is an ongoing dynamic whereby not only “It is important to document the corporate purpose but also to institutionalize it within the company… at all levels.” Consistency12 Companies seeking to test consistency of corporate purpose should ask whether they: Have a clearly articulated corporate purpose that they pursue; Have a corporate purpose that is consistent over time.
  • 13. 13 Highlights from our corporate opinion leader interviews regarding leadership include: “It’s all about leadership”. “It’s leading by behavior and by example”. “The role of leadership is to ensure that the company is walking the talk”. “If you have the privilege on the top of the company, to have leaders who live the values and determine the strategy, it’s much easier to follow a corporate purpose”. “Leadership is absolutely key. The initiator and the challenger and the need to keep challenging the organisation to go an additional few steps, or taking bigger steps to make progress. If leadership let it go, then the activities would go with it and it wouldn’t happen. Leadership really needs to lead by example.” Leadership is critical Strong and committed leadership is crucial to authenticity. Our study found that leadership accounts for almost 50% of the variance in perceptions of authenticity. This is not surprising since leaders set both the direction and overall objectives of the company. Leaders also personify the company’s identity and image through communications with both internal and external stakeholders. This supports the idea that corporate purpose must be consistent with both corporate leadership and action (i.e. both “walking the talk AND talking the walk”). Leaders who are perceived to be effective, dynamic and leading successful operations are much more likely to be running organisations that have an authentic corporate purpose. However, in a complex and uncertain global business context –as organisations grow in scale and across territories – it is increasingly challenging for leaders to ensure that an authentic corporate purpose is maintained.
  • 14. 14 KEEPING IT REAL How authentic is your corporate purpose? Corporate purpose is an organisation’s single underlying objective which unifies all stakeholders and embodies its ultimate role in the broader economic, societal and environmental context. Authenticity has both internal and external components and an authentic corporate purpose is both how the organisation sees itself as well as how others see the organisation. First empirical study of authenticity in corporate purpose designed to produce a roadmap for executives by Burson-Marsteller/IMD. Living an authentic corporate purpose is challenging as companies seek to balance short-term financial considerations with their long-term values and identity. AWARENESS This was the top dimension identified as driving authenticity – meaning that a company has an understanding of its own strengths and weaknesses, what drives or motives its actions and how this affects key stakeholders and the environment. PASSION & EMBEDDEDNESS Passion means the company has a sense of purpose that people are inspired by, find important and in which they invest time and energy. Embeddedness means there is co-creation with stakeholders, whereby some of the company’s actions are influenced by external actors, It is likely to result in deep long-term engagement and authentic behavior. Leadership at all levels needs to live the purpose. Having a well-communicated corporate purpose is not enough. It has to be real and authentic. 12 KEY DRIVERS OF AUTHENTIC CORPORATE PURPOSE IDENTITY AND IMAGE Authenticity of corporate purpose happens when there is alignment between a firm’s perceived and stated corporate purpose and the actual strategic decisions and actions a firm takes. 1 50% of the variance in perceptions of authenticity is driven by leadership. 1st 2 3&
  • 15. 15 Methodology The explicit objective of the 2015 Burson-Marsteller/IMD study is to uncover the drivers of an authentic corporate purpose. The findings are based on an extensive literature review, a quantitative survey of 200+ executives and in-depth qualitative interviews with ten executives from organisations perceived as having an authentic corporate purpose. Respondents of the qualitative survey included the following industries: Packaging, Technology, Food & Beverage, Cement, Pharmaceutical, Automotive, Energy & Environmental Affairs, Chemicals and health The Burson-Marsteller diagnostic tool is designed to enable business leaders to explore each of the authenticity dimensions in a comprehensive and intuitive way. The end result of this analysis will form the guidelines to chart your company’s progress towards an authentic corporate purpose. For more information please contact: Lawrie McLaren Chairman, Corporate Purpose Lawrie.mclaren@bm.com Burson-Marsteller diagnostic tool