This is the first real stress test for corporate purpose.
It’s tough times, not only physically but also mentally. Updates of the COVID-19 virus are emerging rapidly, and we are being fed new updates and developments on an hourly basis. The current rhetoric is chaos and panic in the Western world, Asia has calmed a little and China is on its way to recovery. Let’s hope it’s all over soon.
Anyhow, let’s take a moment to look at the corporate mechanisms in this global crisis. I feel, that for the first time in my lifetime business is trying to chip in and do its part. A moment like this is the essence of our economic system. After trillions of dollars have been shaved off corporate market capitalisation, absolutely no one cares about your business’ profitability at this point, let alone quarterly earnings. The concern is all about society at large. What can we do to make sure an economic downturn is affecting our employees and communities as little as possible? How can we make sure that unpaid leave, forced paid leave or taking on tasks outside of one’s scope are not interfering with people’s livelihoods and/or sanity? And, how can we make sure when business is picking up again, our people are motivated and instantly ready to go again? It all comes down to corporate purpose!
People will be more inclined making it work for both sides if they believe in your company’s higher purpose. That is your purpose literally, or your vision, mission and/or values. Here is an example of an employee of a global tech company: “Ok, I understand my job is such and such but I’m helping out with these other tasks as we’re on a hiring freeze, but I really believe in this company’s purpose of enabling economic growth through the power of technology. I want to work here long-term and build a career and keep enabling my community”.
Now is the time to show the world and your immediate stakeholders that it isn’t only about shareholder value creation and short-termism but creating the maximum value and sustainability for your company’s community of stakeholders. The organizational resilience that you’re able to create in times like these will set you up for long term loyalty and productivity, which will be pivotal once business picks up again.
Fact is: The top 10 percent of the most productive corporations are twice as productive as the bottom 10th percentile (Syverson, 2004). You might ask what does this have to do with purpose? Well, there are now numerous research papers that show that the main driver for productivity is purpose paired with clarity of a company’s strategic direction and priorities.
Granted, business with slim margins, high debt, and those who have been immediately hit hardest by the crisis (airlines, hotels, restaurants, etc.) will need more than their employee’s commitment. Hard cash that is, which will be the government’s job to support.
Not only are many corporations currently putting their money where their mouth is, but they will emerge as true heroes with great productivity, high employee retention and ultimately high overall organizational resilience. Those who are not aligning their actions to their purpose, or don’t have a purpose altogether, won’t.
Bring your people together through the power of purpose.