Is it Duel or Dual?
May 15, 2018
See the new issue of Briefings magazine, available at newsstands and online.
Gary Burnison is CEO of Korn Ferry.
In an "either/or world," the only real choice is "and."
This truth can get lost, though, as scrutiny goes to one side or the other. Companies today are in the spotlight increasingly for the contributions they make. Business leaders are being called upon to stand up and speak out on a variety of issues affecting society—to champion change beyond just the business landscape.
In his latest “Annual Letter to CEOs,” BlackRock’s Larry Fink wrote: “Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.” That’s very true, and companies that ignore purpose do so at their peril.
But there is another reality—one that also cannot be ignored. The hard fact remains that, in order to survive, companies must grow. At the end of the day, CEOs are judged on whether they deliver profits. A purpose-driven company that grows by only single digits will lose to a competitor consistently delivering double-digit growth.
What may look like dueling priorities—purpose vs. profitability—aren’t really mutually exclusive.
If anything, this pair is actually a “dual.” Even as leaders are urged to become more outward focused and purpose driven, profitability cannot suffer. And, as leaders deliver bottom-line growth, they cannot ignore that a growing number of stakeholders—investors, employees and activists—are scrutinizing their social responsibility.
Yes, purposes and the terminology to describe them come and go, like bell-bottoms and tie-dye. It used to be ecology—I can remember that one back in elementary school when Earth Day was launched. Over the years, the vocabulary changed—people now speak of carbon footprints and sustainability.
Corporate social responsibility (CSR) became its own movement, an incentive to “do good”—and the means to trumpet the positive. Socially responsible investment is a wave within that movement, to put money behind what’s deemed “positive” instead of what’s considered “negative.” For companies today, this may be the harshest spotlight of all.
I don’t want to be counted among the cynics, but I think back to a decade ago, in the depth of the worst financial economic crisis since the Depression. In the Great Recession, sustainability as a priority became a luxury few companies could afford when survival was on the table and people’s houses were being repossessed.
That isn’t to say sustainability and CSR don’t matter—on the contrary! But profitability can never stop being a priority. It isn’t “either/or,” it’s always “and.” CEOs who can balance and synchronize both parts will be the winners.
At the heart of that balance is an enduring fact: It’s always about people. They are the ones for whom movements and causes should matter most. Purpose-driven talent—and not just millennials—will judge their employers by the good they do in the world. And that starts “at home,” with work environments that are inclusive and fair, that allow people to be who they are and bring all of themselves to work.
People want to work for companies that engage and motivate them, just as companies need employees who are engaged and motivated. Here, too, is the balance of “and”—motivation and productivity. As Korn Ferry studies have found, firms that engage and enable their employees have 4.5 times more revenue growth than companies that don’t. Yet only a little more than half (59 percent) of global employees feel extrinsically motivated to work hard and do their best. The rest (more than 40 percent) feel that their employers’ incentives are inadequate to keep them motivated.
When it comes to intrinsic motivation, the numbers are somewhat more favorable: 70 percent are intrinsically driven to work hard and do well. But that still leaves 30 percent who are not engaged. That’s a wasted resource as incriminating as a belching smokestack or a polluted waterway.
Corporate leaders can’t be so focused on external perceptions of what they do in the world—their corporate giving and other CSR—that they neglect a truth that’s as old as time. People want to be loved. Being loved means being seen and appreciated. It means “you matter,” genuinely and sincerely.
Leaders who pull this all together will rise above the rest. They will be far more likely to endure through the ebbs and flows of trends and fads to achieve true sustainability—in their profit and in their purpose and in their people.