Purpose has taken its place at the heart of a wide range of comms. But is it a short-lived trend or something that’s here to stay? And what does it mean for reporters?
We live in interesting times. Political uncertainties and a raft of unforeseen events have eroded trust and changed the landscape that companies, as well as governments, operate in. There’s a new mood among consumers and communities across the world. No longer is it enough for companies to just turn a profit – they also have to show how they make a positive contribution to individuals, society and the planet itself.
Purpose is a statement that defines a company’s place in the world, and comms and marketing teams have been quick to use it in many different ways. Now the FRC is recommending that annual reports should embrace it. Our own Fit for Purpose Index reveals that reporting teams are adopting purpose in increasing numbers, putting it into action across key areas of their reports including strategy and business model.
To us, this indicates that purpose is here to stay and will increasingly form the centrepiece of how companies operate and report in the 21st century. But the downside to the FRC recommendation is that companies could rush to ‘get a purpose’ without understanding the full implications of doing so. It’s hugely important to recognise that purpose isn’t a bolt-on or something you can impose. Instead, it has to spring from the very DNA of a company – it must be credible, relevant and have the full support of everybody in the organisation, top to bottom.
Remember the old anecdote about President John F. Kennedy visiting NASA? He introduced himself to a janitor who was mopping the floor and asked him what he did. “I’m helping put a man on the moon,” replied the janitor. That’s a brilliant example of purpose in action. But while some companies like Lloyds Banking Group and Vodafone have done a great job at identifying their purpose and focusing their whole organisations around it, others have not been so successful. Provident Financial Group, for example, has defined its purpose and reported it well – but failed abjectly when it came to living that purpose, losing around two-thirds of the company’s value.
So merely reporting on purpose is not enough. Leaders need to understand the implications of becoming purposeful and to fully embrace the changes this will bring. Getting purpose right must become absolutely essential to the leadership agenda.