Why 'corporate purpose' has new currency

Why 'corporate purpose' has new currency

KPMG recently interviewed the leaders of listed businesses, nominated for the 2015 UK Stock Market Awards, to discover how they're tackling today’s big issues for British business.

Director, Global Centre of Excellence & KPMG LLP

KPMG in the UK

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Why 'corporate purpose' has new currency

We also sought the views of our in-house experts throughout the year and compared their opinions with the business leaders. So to the big question, did the FTSE 500 representatives agree with the KPMG advisors?

One of the issues discussed related to the ability of companies to attract the best individuals. Focus groups among younger KPMG employees have already shown that corporate purpose has become more important to highly skilled white collar workers. Following on from this feedback, I proposed the theory that talented employees are thinking less about cash or career status in the longer term and focusing more on the nature of the company they’re affiliated with.

We asked our respondents whether they agreed with the statement: “Increasingly, top talent will migrate towards those organisations which can demonstrate a true purpose – not by mission statements, corporate values or growth targets – but a sense of why they exist.” 

Almost all our business leader respondents agreed. There was real positive reinforcement of this theory, with respondents increasingly aware of the battle for talent as the economic situation improves. The majority of respondents are conscious of the need to differentiate themselves from the rest by clarifying the purpose behind their company, as well as connecting with their communities. 

Several emphasised the importance of taking steps to actively engage with employees and link them to this purpose. One business leader said: “Companies have to live and walk their values and culture, not just print them on a mission statement as corporate propaganda.” Another pointed out: “Millennials are looking for this;  how they respond to ‘the cocktail party question’ about what they do concerns many people.” 

Perhaps the most important point to be taken from the comments was the need for authenticity. Anyone can pay lip service to a set of values. It could even stop becoming a point of differentiation after a while. However, if it is only lip service, I’d suggest that employees will soon find you out. 

Defining and living a real purpose can set individual organisations apart from the rest. Talent shortages look set to rise, with some sectors like engineering already struggling to fill vacancies. I’d suggest the need to define and live out a purpose is only going to increase with further public scrutiny of corporate behaviour.

More insights from the FTSE 500 representatives and our advisors on a range of subjects from cyber to technology and the possibility of a British exit from the EU are available in the full survey report.

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