Laurie O’Donnell continues the discussion on today’s critical need to define a corporate sense of purpose in any talent strategy
In today’s changing world, CEOs are under more pressure to transform, adapt and align organisations to succeed or, increasingly, just to survive. With so many business-critical issues demanding attention, should they also take responsibility for the development and deployment of a corporate talent strategy?
The answer is they fully expect to.
In PwC’s 2016 Global CEO Survey, over 1,400 executives were interviewed from 83 countries and a wide range of sectors. Leading organisations in a changing world was cited as a key issue, as well as the speed of this change.
Determining future talent requirements and people strategies was reported as a business critical issue. Rapid changes in technology, and the rate of change, as well as global political events and economic shifts also featured high on the list.
Less expected was the issue of ‘corporate purpose’ – what a company stands for, what products it makes, how it treats the environment and its employees. More and more, CEOs are coming to realise that employees are looking to work for organisations and leaders that they admire, believe in or trust. (See our previous blog post on the importance of Corporate Purpose)
Many senior leaders profess a deep-rooted commitment to their people, but there is a danger if employees see and experience a disparity between such claims and what happens in practice—how employees are really treated. Here is where a company’s reputation will suffer real damage. This disconnect is bound to create repercussions in engagement and retention, and is the incubator for cynicism.
Walking the talk on talent strategy
How do leaders who make statements about leading with purpose demonstrate this value? Denise Morrison, CEO of the Campbell Soup Company since 2011, says that one of the first things she had to do was to add the value of courage to the core values of the company.
“I encouraged people to take bolder moves and bigger risks – all with the highest integrity,” she says. “It was a decisive move that created a very aspirational value for us.”
Employees had to be trained to make decisions more quickly, which was a challenge for many. Morrison also changed the management of talent from measuring activity to setting objectives and measuring an individual’s performance based upon their contribution to the organisation as a whole.
“‘Purpose’ isn’t selling more products and services – that’s a goal of every business. ‘Purpose’ is the compass that guides your business and serves as a filter to make decisions. It inspires employees to drive your company’s performance and it strengthens your connection with consumers and their values.”
—Denise Morrison, CEO, Campbell Soup Company
Performance with purpose
Indra Nooyi, CEO of Pepsico, has led an organisation of over 185,000 employees in 200 countries since 2006. When she was first appointed, she held town hall meetings with the employees. Few people said that their focus was their pay cheque – they wanted to build a life not just secure an income. They spoke about consumers being more conscious of health and wellness.
“‘Purpose’ is not about giving money away for social responsibility,” says Nooyi. “It’s about fundamentally changing how to make money in order to deliver performance – to help ensure that PepsiCo is a ‘good’ company where young people want to work.”
Exemplary leaders have differing styles, approaches and missions, but they all share the knowledge that the people strategy is inseparable from the business. When asked if she would accept lower profit margins to follow her values and “do the right thing”, Nooyi answered:
“Purpose does not hurt margins. ‘Purpose’ is how you drive transformation.”
She acknowledged that if the company did not tackle the environmental issues (especially with regards to water) then PepsiCo would have lost their licences in many countries. Recognising that there are consequences when changing a company culture, she agreed the process of change can hurt profitability in the short term.
“Transformations sometimes hit your margins or top line because things don’t always go in a straight line. But if you think in terms of the life span of the company, these are just small blips,” she says.
These messages of purpose stated by Nooyi and Morrison have set the direction of these companies. Their actions have given credibility to their message. The courageous changes that both have made address not only consumers’ concerns but also deliver a message to their global workforce, something that is particularly important in terms of future employees.
The future workforce
Millennials (born from 1980 to 1995), as well as Generation Z (those following millennials), make up a growing portion of the workforce. This demographic shift will see Millennials making up to 50 per cent of the workforce by 2020.
Their goals and motivations are very different from the previous generations. They are looking for tangible things like a comfortable lifestyle, but also the intangible – a chance to achieve something of value and a feeling of connection and purpose.
The world is changing and it is a deeply challenging time to lead. But it is this very challenge that has opened the door for CEOs who can articulate purpose and drive new opportunities.