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

- Does the organization openly share information with stakeholders?
- Does the organization pretend to be something that it is not?
Case story: BMW
In the premium segment of the automobile market, the BMW Group manufactures automobiles and
motorcycles and is based in Munich, Germany. The company sells BMW, Rolls-Royce and Mini cars,
as well as BMW Motorrad motorcycles. In 2012, Forbes announced the BMW Group as the most
reputable business in the world. Its 2013 revenues were € 76.058 billion and 110,351 employees.
The BMW Group is a global company that sells its products in more than 140 countries and
production facilities in 13 countries. Its mission statement is to be “the world’s leading provider of
premium products and premium services for individual mobility”. The BMW Group’s strong sense of
purpose has positive impacts both internally and externally. The impact of purpose on internal
stakeholders is that it fosters employee commitment and pride. The BMW Group’s sense of purpose
also allows it to have a more open dialogue with external stakeholders. It holds stakeholder
dialogues with different stakeholder groups, to discuss different topics in a world café-style format
to ensure that it hears very diverse views. The openness of the format ensures that stakeholders are
listened to and heard, which they appreciate. As described by a senior executive at the BMW Group:
We receive feedback which is very consistent across regions and is positive about our openness
and we are putting so much emphasis on listening. The authenticity allows this openness and
trust to develop step by step with our brand stakeholder base.
Integrating purpose into decision-making at the BMW Group
The BMW Group implemented Strategy Number ONE in 2007, to align the group with two targets: 1.
to be profitable and 2. to enhance long-term value in times of change. This strategy applied to the
technological, structural as well as cultural aspects of the BMW Group and helped all managers to
adopt a more holistic view when making decisions. In other words, the company’s decision-making
process integrated its purpose in a cascaded manner from the board level downwards. For example
– today - when presenting a new project to the board for approval, part of the documentation
required is an assessment of the sustainability impact as well as financial and human resource
implications. In this way, all projects are considered in the context of their broader context and
impact. “The company is placing the focus on whether employees are not only looking at their direct
task and responsibility, but also whether they take decisions based on the company context as a
whole.”
A key enabler of the BMW Group’s purpose is its people. Within the recruitment process, there is a
clear criterion that a future employee has to fit into - the BMW Group culture as already described.
The leadership component is also critical. Stability at the top-management level has allowed for
establishing continuity in the company’s ability to live its purpose over time. Six of the eight board
members have grown up and evolved their professional activities within the BMW company, and
around 46% of the shares are held by one family. In addition to providing continuity, stable
leadership allows the BMW Group to take a very long-term view, consciously making decisions that
underscore the company’s desire to lead iconic change. The tone is set at the top, with the board a
key champion of corporate purpose: “The board contributes a lot to setting the tone, leading by
example in terms of the kinds of behaviors they promote and the leaders they hire.”
35