In the U.S. today, the age of the “purpose-driven” company has taken root—and will continue to grow in the coming decade. Stakeholders, including top talent, increasingly are demanding companies have a purpose beyond making a profit—and the C-suite itself recognizes that a company’s future success and competitiveness will hinge on its commitment to helping solve society’s problems.
That is according to U.S. Fortune 1000 CEOs and other c-suite executives in the first-ever i3 (ignite, imagine, innovate) Index, a national survey commissioned by Covestro designed to examine timely social responsibility and sustainability issues facing Corporate America.
The Index found that many senior executives (51 percent) do believe there is inherent tension/conflict between a company being profit-driven and purpose-driven. However, most (69 percent) also say that the act of balancing profit and purpose is having a positive, transformational impact on business, with half or more reporting such impacts as they integrate a purpose-driven approach into various functions.
And, when it comes to a company’s social purpose, its people are also key. With Millennials driving the bus on purpose, the C-suite believes empowering their employees’ personal sense of purpose and giving them opportunities for more purpose work is a win-win that is good for both their business and the employees themselves.
“The research reveals a strength of opinion that confirms, in corporate America today, purpose is being driven by the workforce and other stakeholders. Companies are not only responding, but understanding that a company’s social values are a defining part of its brand and success,” said Jerry MacCleary, chairman and CEO of Covestro LLC, in a news release.
“The fact that many of the senior executives see a tension between being profit-driven and purpose-driven signals growing pains and illustrates how purpose can actually be the transformational ingredient that brings a business to the next level.”
Major findings include:
- Employees—both new hires (77 percent) and current employees (76 percent)—are the primary drivers of demand for purpose-driven companies; followed by customers (68 percent), “other stakeholders” (61 percent); regulators and policymakers (53 percent) and investors and shareholders (52 percent).
- An overwhelming 86 percent of CEOs/c-suite executives confirm that today’s top talent is more inclined to work for companies that have a demonstrated commitment to social issues compared to ones that don’t.
- Some three-quarters (73 percent) predict demand among stakeholders for purpose-driven companies will increase in the next decade.
- Four in five (80 percent) agree that a company’s future growth and success will hinge on a values-driven mission that balances profit and purpose; and, three-quarters (75 percent) believe these companies will have a competitive advantage over those that do not.
- Half or more respondents report that integrating a purpose-driven approach has transformed different aspects of their business, including Environment, Safety and Governance; Corporate Social Responsibility/Philanthropy; Communication and Reputation Management (71 percent, respectively); Human Resources (60 percent); Growth and Business Strategy (59 percent); Sales and Marketing (54 percent), Innovation, R&D, Products and Services; and, Shareholder and Investor Relations (53 percent, respectively).
- Some two-thirds (68 percent) say it is important for their companies to empower their employees’ personal sense of purpose and predict employee desire for purpose will increase over the next 10 years (64 percent), primarily due to Millennials and their mindset (33 percent).
“Today, purpose is more than just a buzzword. Companies have to deliver on the promise of making society better – they have to do it through their actions and by enabling their employees to realize their own personal need to be part of something greater than themselves,” said Rebecca Lucore, head of corporate social responsibility and sustainability at Covestro, in the release.
The survey, conducted by SSRS of Glen Mills, Pa., polled 100 senior executives from U.S.-based companies included in the Fortune 1000 list. Interviews with these executives were completed online and by telephone from October 26, 2017 to January 16, 2018. Industries represented range from retail, manufacturing and agriculture, to business and personal services, finance, insurance and real estate, among others. Based on the sample size, the overall margin of error at the 95 percent confidence level is +/- 9.8 percent.