FOREWORD
FOREWORD
Consequently, a company’s purpose, its “why,” is crucial, it is a key foundation stone to driving results.
A pivotal moment for purpose In today’s complex environment, our findings reveal how purpose-led leadership can guide organizations toward meaningful impact and long-term value.
PURPOSE IN NUMBERS 62 % of CEOs state that resilience and agility are their biggest challenges.
does rather than why it does it, are more common in the USA. Both mission and purpose are integral to a company’s identity, but while mission statements address the present, purpose statements drive a more enduring emotional connection that motivates. As indicated above, the purpose of an organization is key to motivating stakeholders, driving long- term value, and developing strategies and tactics. Strategies and tactics in turn shape market position, brand development, employee value propositions, innovations, and more. At this time of major geopolitical and macroeconomic challenges, the need for CEOs and the C-suite to bring meaning to their organizations through purpose is crucial. EMBEDDING PURPOSE However, as this report indicates, many organizations struggle to translate purpose from the leadership team to all organizational layers. There are many reasons for this from not having a purpose that resonates to more simply leaders not engaging in “constant gardening”—the regular act of discussing how the team's efforts support the company’s purpose. A company’s story, its “why,” is only relevant and motivating if it is regularly discussed. Without this, other, less productive discussions will fill the space and to stay in the metaphor grow like weeds. Therefore, the key for CEOs and all chief meaning makers is to move beyond purpose being mere words on a wall and bring the story alive in the organisation through talking about it. This latest CEO report highlights that while purpose is accepted within the broader business context, companies must further unlock the power of purpose and their organisational story to deliver long- term value through challenging times. The report offers strategies and case studies illustrating how leaders and their businesses can thrive by integrating purpose into their meaning-making. In conclusion, while leaders are essential, they are nothing without followers. Followers deliver outcomes, and they need purposeful stories to truly perform.
may prompt calls for new leadership, new meaning makers. Consequently, a company’s purpose, its “why,” is crucial, it is a key foundation stone to driving results, underscoring the importance of this latest CEO Purpose Report by Brandpie. PURPOSE IMPROVES PERFORMANCE Brandpie has been at the leading edge of research into organizational purpose and its impact on performance for many years. Their work shows that purpose is increasingly used by companies and correlates with superior financial outcomes. For example, a recent report on the FTSE350 revealed that 78% of companies have a purpose statement, and that these companies outperform those without one in two key ways: (1) they achieve superior Returns on Equity (ROE) and Returns on Assets (ROA), and (2) they excel in ESG (Environmental, Social, and Governance) metrics. Similarly, the report on the ASX100 found that 72% of companies have a purpose statement, and those with one outperform those without across ROE, ROA, and ESG metrics. These results highlight how companies with purpose statements are more efficiently using their assets and equity to realize returns and gain investor confidence through their ESG performance. The reports argue that these outcomes are achieved because individuals in the organisation understand the company’s “why”—its reason for being—thanks to the clarity provided by the chief meaning makers. While purpose statements are prevalent in companies on the FTSE and ASX, this is not the case in the USA. For instance, only 41% of companies in the S&P100 have a publicly stated purpose statement, and there is no clear correlation to superior outcomes. This lower prevalence of purpose in the USA persists despite the Business Roundtable’s 2019 statement that the purpose of an organisation should extend beyond maximizing shareholder returns to include serving shareholders, employees, suppliers, and communities. Instead, mission statements, which focus on what a company
7/10 CEOs understand the importance of purpose as a strategic driver of
business benefits. 24 %
O ne often overlooked aspect of CEOs and the C-suite is that regardless of their specific roles—whether they are chief executive, chief marketing, or chief finance officers—they are all chief meaning makers for their teams, the broader organization, and its stakeholders. In this regard, these leaders are crucial, though not the sole keepers of the organisation’s story. A story we typically call the company’s strategy, which is built from the base that is the company’s narrative framework (purpose, values, mission, and vision/ambition). Further, the chiefs’ belief in, and alignment with the story is continually tested and discussed. Every move and utterance by these leaders are scrutinized by their teams to determine if anything is changing or not and this is the fuel for organisational gossip and culture. This is where purpose comes in. Purpose matters because it reinforces and drives belief, which in turn drives behaviours and loyalties, resulting in outcomes. Outcomes that are measured by accountants become the organization’s results. In turn, results that exceed expectations reinforce the power of the chief meaning makers, while those that fall short
Nick Barter CEO & Founder Future Normal Professor in Strategy & Sustainability Griffith University
of CEOs believe that their front-line employees have fully embraced purpose. 74 % of CEOs agree that purpose can help activate their brand, a 42% increase on last year.
6 Brandpie CEO Report 2024 A pivotal moment for purpose
Brandpie CEO Report 2024 A pivotal moment for purpose 7
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