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Having a strong purpose can unite a company during a crisis. The Covid pandemic has forced companies to ask the question “why do we exist”. This is what a company’s purpose statement is designed to address.
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Corporate purpose is closely linked to stakeholder capitalism. It can be triggered and shaped by a Company’s investors, employees, and/or customers. Purpose can also be triggered by an inflection point-type event. For example, the Covid pandemic has brought forward the communities where a Company operates as a key stakeholder for business. Covid has compelled people to look at whether and how organizations live up to what they stand for in terms of community support and development . Many organizations began to question their purpose and how is relates to what they’re now doing in response to the on-going Covid crisis.
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Purpose-driven companies are defined by their ability to instil a culture of purpose, by how purpose is governed and measured, by the role it plays in talent management, by how purpose impacts on strategy, and by their ability to handle conflicts with purpose being the chief guidepost.
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Effective CEOs and other senior leaders champion their company’s purpose, and strive to make purpose visible, promote actions not words, and actively tailor purpose-related communications to “make it real” for stakeholders.
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Purpose is also closely linked to the company’s talent, dictating or shaping who is recruited or developed. It influences how organizations engage talent and foster loyalty and retention.
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The importance of consistency with the company’s purpose is critical to strategic decision making. It should dictate what opportunities the company embraces and what opportunities it forgoes.
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