Purpose and performance

Is purpose a new way to sell the business case for corporate responsibility?

Yes and no.

A study by the PR firm Burson-Marsteller and the more credible business school IMD, has apparently found that:

“A strong, coherent and well-communicated corporate purpose can boost financial performance by up to 17% and build trust with stakeholders.”

You’ll have to take their word for it though, since the study does not appear to be available publicly. Surely a key error.

Using purpose is a good way to move away from discredited terms such as corporate social responsibility if your board is sceptical about CSR.

It provides a chance to take a more fundamental look at why your company is in business.

But the danger is that the immediate response will be: “Our purpose is to make money for shareholders”, and that’s the end of the discussion.

If your board is sceptical about CSR, will using the term “purpose”, help?

The answer to that depends on the terms senior executives will respond to.

My view is it’s worth a try. I’ve seen it work on at least one company chairman.

UPDATE 11/10/10. Here’s a link to the report, now provided by Burson-Marstellar.

Here’s a previous post on the topic, with a great video on purpose.

Some listening and reading:

Podcast interview with Nikos Mourkogiannis, author of a new book on corporate purpose and values
Podcast interview with Nikos Mourkogiannism, chairman of the board of Panthea Ltd.
(This is free to all)

Public purpose – Corporate history’s lesson for companies now
While there is much about the history of corporate legislation that remains murky, companies should revive the requirement for a stated public purpose, says Peter Kinder (Subscriber-only article but you can take a free trial by clicking on the link)

The purpose of the corporation
Mark Goyder delves once more into what companies are for
(Subscriber-only article but you can take a free trial by clicking on the link)

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