BM_IMD_REPORT-How-Authentic-is-your-Corporate-Purpose

One executive described the “double-edged sword” dimension in this way:
Authentic corporate purpose is one of the most important ways a corporation in today’s world
can communicate in a world characterized by a barrage of ideas. It helps people to understand
why a corporation exists and why people should care if it went away tomorrow. With the degree
of information chaos, citizen journalists and content circulating on digital media – if your
purpose is not authentic, you will be found out quickly.
Finally, by having a purpose and reliably delivering upon it, companies establish credibility and build
trust as a partner in strategic partnerships.
7.3 Integrating corporate purpose into decision-making
Corporate purpose is strongly integrated into the decision-making processes of the companies
interviewed at many levels – from the strategic to the operational. There are many examples of this.
At Tetra Pak, purpose translates into a strategic priority, with environmental excellence being one of
the company’s four strategic pillars. At Google, having a positive impact on society drove the
company to invest in the Google Food Innovation Lab, which looks at how Google can make a
positive contribution to the whole food system. At several companies, corporate purpose guides
investment decisions; proposals for new projects need to report on how they fulfil corporate
purpose. At BMW, documentation submitted to the board needs to include sustainability measures.
All of the projects selected for Holcim’s innovation fund are chosen based on how they can help
achieve the long-term sustainability agenda (core to the firm’s purpose). At Toyota, the mobility
project, which includes investment in fuel cell technology, is central to its long-term purpose of
leading the way to future holistic mobility solutions on a systemic level. At Unilever, carbon and
water footprint targets as well as sustainable sourcing targets are the direct result of objectives
established based on the organization’s corporate purpose. Roche has invested heavily in issues
related to diseases neglected in developing countries, an example being its Global Access Program to
dramatically lower the price of HIV viral load tests in low- and middle-income countries. IKEA helps
to set the global standard for forestry through the Forest Stewardship Council to ensure that forests
will be present in the longer term.
Most interviewees mentioned how corporate purpose is core to operational decision-making or
corporate culture. For example, at IKEA, corporate purpose drives employee behavior:
Enablers
Purpose is at the core of how employees think about what’s right and what’s wrong, how they
should behave inside this company in their day-to-day job. So it’s absolutely fundamental for
people to navigate in their daily lives and what it takes to be a good employee in the context of
an IKEA purpose and an IKEA core strategy.
Companies cited a variety of enabling factors to explain the degree to which corporate purpose is
embedded at the organizational level. Top-level indicators included long-term vision, private
ownership, focus and leadership. At Tetra Pak, private ownership provides the continuity required to
embed purpose. At BMW, the board, for example, has ensured that purpose has been translated
into supportive human resource policies. At Roche, family owners (including two board members)
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