- Corporate Culture
Why is it increasingly so important for companies to be clear about their culture, their strategy and above all their purpose – about who they are, how they run their business and the very core reason for their being – as well as about the role they play as an integral part of society?
Let me meander a little as I strut, skip and shuffle towards making a few points.
I’ve always been interested in the wider role of business. Perhaps for that reason, I have also always resented the notion that business is something different than what is now often known as “civil society”.
The first time I heard the expression it was as if someone had poured a bucket of cold water over me.
I was at the otherwise splendid inaugural ceremony of the UN Global Compact at the UN headquarters in New York, in 2000, representing ABB, which was one of the first companies to join the compact.
Alphabetic logic placed me next to the then Secretary General of Amnesty International.
After I said my piece about ABB’s commitment to the UNGC’s balanced approach, he leaned over and whispered, just loud enough for the microphone to pick it up, “nice word – but only words, of course.”
His lounge lizard ambush didn’t endear me to the label “civil society”.
I have since realized that it slowly took hold as the international NGOs – who see themselves as the true representatives of “civil society” – entered the global establishment around the Millennium.
So, just so we’re clear, the world apparently consists of three groupings – government, business and civil society.
Point number one: It’s a terrible, dumb and non-productive way to group the main societal actors.
If we place culture, strategy and purpose of business into that world view, we simply invite trench warfare across an expanse of wasted opportunity.
Instead, the way to see the role of business in society needs to come full circle. And there is good news – the wheel may be turning in the right direction.
What would be full circle? Close to a viewpoint that Adam Smith would have shared. Yes, that Adam Smith, the father of capitalist economics. He saw a clear need to balance the role of the company as an economic actor and its effect on the people touched by its activities.
To achieve this, Smith famously advocated that “the invisible hand” of unobservable market forces would create a natural equilibrium between the interests of business and society, serving as a way to keep greed checked and societies peaceful.
But Smith also warned: “No society can be flourishing and happy of which the far greater part of the members are poor and miserable.”
Point number two: Let’s instead start here. Let’s see how business can – and in many cases how business already does – help build a society in which people prosper and are happy.
It is an endless journey. Communicators are often the pathfinders. The quest: mold culture, strategy and process into a harmonious process purely aimed at expressing the authentic character of a company.
The trifecta of culture, strategy, purpose are linked for a reason. I believe that business leaderships run their companies, whether they know it or not, basically on these three sources of energy.
As Peter Drucker said, “Culture easts strategy for breakfast” – so culture comes first. It drives behavior and defines character.
Strategy is the second energy source – assuring you have a smart way of running your business, to differentiate, to be efficient, to create empowering structures and enabling strategies through which performance is assured.
And the third, and in many ways most important fuel is purpose. The reason why we exist. Why employees get up in the morning looking forward to work. Why customers buy and why authorities allow us to operate.
Point number three: Purpose is also the way to ensure, as Arthur W. Page said, that our business can meet his test:
“All business in a democratic society begins with public permission and exists by public approval.”
Page elaborated, in a speech on industrial statesmanship in 1939 (almost 80 years ago now), on what he meant:
On public permission: “The public permission takes the form of charters, licenses and legal authorizations of one kind or another.”
On public approval: “Public approval is generally represented by reasonable profits, reasonable freedom of action and a few kind words.”
On public disapproval: “A lack of public approval is expressed in a good many ways – laws, regulations, commission rulings, investigations, public hostility and most vital of all, by a lack of patronage.”
And any company that embarks on a journey with culture, strategy and purpose as its energy sources and guidance, will benefit from its outcome: an advanced understanding both of itself and of its role in society.
Point number four: So how do you make this happen? Are we talking “meaning of life” stuff or “cheese and crackers”? It’s both. At Shell, when we discussed how to become clearer about why we exist and our role in meeting the world’s energy challenge, I advocated that we should start by defining “our hill”.
In meetings with the Executive Committee and the Board of Directors, I said: “We have to decide which hill we’re on. And be aware that the story of Shell is being told, but not by us at the moment.”
BP at the time was on a green hill, and ExxonMobil on a performance hill. What was ours? How did it sit in the landscape? What is the view from there? And what do others see when they look at us?
Culture evolves over a long time – to decipher it and express it well and authentically is a PR task. Strategy is the leadership’s foremost duty, and we can help by making sure they think things through from a number of perspectives. But purpose, the true expression of why we exist, that’s the Holy Grail which embodies all the elements from brand through to values and positioning.
Final point: Find your hill. From there, on a clear day you’ll see your purpose.
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