Contributor, Korn Ferry Institute
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The Purpose Reckoning Is Underway
Daniel Goleman is a senior consultant at Goleman Consulting Group, author of the best seller Emotional Intelligence, and host of the podcast First Person Plural: Emotional Intelligence and Beyond. He is a regular contributor to Korn Ferry.
A year ago, Fast Company predicted that 2022 would bring a “great reckoning” for corporate purpose. “There will be more global purpose initiatives,” predicted Shayna Samuels, co-founder and principal of Ripple Strategies, a communications agency that designs and deploys media campaigns that accelerate positive social change. “COVID-19 demonstrated we’re all in this together.”
While some would argue that there hasn't been nearly enough progress made on environmental, social, and governance (ESG) issues over the past twelve months, a reckoning is still underway. Purpose is a growing factor in how consumers, investors, and employees make decisions. Based on its survey of business establishments, the U.S. Bureau of Labor Statistics estimates that roughly 4 million workers, on average, quit their jobs each month in 2022. In a survey of close to 900 American workers by the career website Zety, 75% said “more meaningful work” is “what made the grass greener” in other organizations.
Whether companies call it sustainability, social responsibility, or stakeholder capitalism, it’s evident they are feeling the pressure—particularly from younger generations—to sharpen the focus on how they impact people and the planet. Since no two firms have the same approach to purpose, the question becomes: What defines a leader in this arena?
According to a new report from Korn Ferry—based on insight from board members and investors representing 100 companies across seven industries—there are six characteristics that define companies leading in ESG and sustainability. Though not every company has all six, these archetypes represent commonalities seen across those firms currently shining the brightest in their approach to doing good.
1. Weaver. These companies have embedded ESG across the entire organization so that it shows up in everything from strategy and operations to people practices and culture. The ‘weaver’ considers how sustainability and DE&I impact tangibles like supply-chain and product development—and intangibles like company identity and employee conversations.
2. Trailblazer. Many survey respondents pointed to early adopters—companies, like Patagonia, that began considering ESG well before their peers. Through decades of hard work, these companies have made their mark by forging ahead into unmapped areas—centering organizational purpose in ways that weren’t previously modeled.
3. Adventurer. Connected to the spirit of the trailblazer, these companies think outside the box and have a relentless focus on innovation. They are willing to stand out and be bold, regardless of pushback. They see opportunities to focus on ESG in places others may not have considered or thought possible.
4. Analyzer. These companies don’t just measure their progress for reporting's sake; they use metrics as a way of learning, staying accountable, and informing people of next steps. These are companies where purpose is more than a promise—it connects to a set of visible guardrails and outcomes. These are organizations where data informs action.
5. Communicator. By vocalizing their stance again and again, these companies burn their commitments into people’s brains, welcoming audiences to hold them accountable. They are willing to put a public stake in the ground with meaningful messaging.
6. Contender. These leading-edge organizations leverage purpose to their competitive advantage. From the resources they use to the very way they do business, they double down in a way that positions people and planet at the very foundation of their success.
Think of a company you admire for their approach to purpose and it’s likely you’ll see at least two or three of these archetypes represented. While these characteristics currently distinguish leaders in centering purpose and ESG, in the not-too-distant future they may provide a blueprint for just about any company wishing to survive.
This is a reckoning, after all. Given the growing pressures, companies around the world will have no choice but to grapple with their role in securing the future.
Co-written by Elizabeth Solomon