Todd Pruzan, HBR
Welcome to the HBR Video Quick Take. I’m Todd Pruzan, Editor-in-Chief for Research and Special Projects at Harvard Business Review.
As stakeholders increasingly expect companies to engage with societal issues, corporate purpose has become a strategic imperative that brings great benefits to all organizations.
But a new Deloitte report called “C-suite Insights: How Purpose Delivers Value in Every Function and for the Enterprise” reveals that while a wide range of companies recognize the value of a purpose, they often struggle to implement it, with “targeted” activities missing and leaders often walked away from the core business of the company.
John Mennel, a targeting leader in Deloitte Consulting’s Monitor Deloitte Practice, is one of the authors of the report. John, thank you so much for talking to us today.
John Mennel, Deloitte
Thank you, Todd.
Todd Pruzan, HBR
John, what is a goal and why should C-suite leaders care about it?
John Mennel, Deloitte
Big question. We define purpose as the reason for an organization’s existence and [the] has positive effects that its core activities deliver for all its stakeholders and for society. An organization’s purpose sets it apart and makes it more valuable in the long run.
And that is the main reason why all leaders should be concerned about it. And in addition to defining the overall goal, we advise clients to really focus on the systems, processes and incentives that allow it to consistently deliver on its goal every day, because that consistency of delivering on our promises is really key.
Todd Pruzan, HBR
Is there a particular C-suite leader who should be responsible for the goal?
John Mennel, Deloitte
Not really. Each member of the C-suite has an important and different role in defining and activating the goal. The CEO is of course critical and plays a role, both as champion and integrator, connecting purpose to a company’s strategy.
Many companies, including Deloitte, also have a Chief Purpose or Sustainability Officer who can help facilitate job-specific goals, enable collaboration and alignment to improve overall results. But really, every leader, from the CFO to the CIO, to the CMO, to the CHRO has their own role to play.
Todd Pruzan, HBR
What business value does the goal bring to a company?
John Mennel, Deloitte
That is interesting. Research shows that purpose drives value across a broad range of stakeholders, including everything from talent to operations, supply chain and brand to cost of capital and investments. And activating a target these days is part of being a well run business and appearing as well managed.
Our research, the recent Deloitte survey, indicates that talent is by far the biggest driver of value today, with 79% of the people we surveyed, C-suite executives, agreeing that the goal is to drive recruitment, engagement and support talent retention. And the business case for the goal can often only be made based on the talent game.
Todd Pruzan, HBR
OK, so how and to what extent do C-suite leaders hold themselves accountable to their target priorities?
John Mennel, Deloitte
There is a great opportunity to strengthen and improve accountability in that area. For example, our research shows that while the majority of C-suite leaders surveyed, 70% of the total, say the role is highly connected — influenced by their company’s goals — only about a third say their pay is linked to their performance against those target goals. So the truth is, there is still a long way to go when it comes to liability.
Todd Pruzan, HBR
What steps can C-suite leaders take to effectively demonstrate the goal?
John Mennel, Deloitte
We recommend five things to get started. The first is to articulate the why for the company. So how does your core business create value for your stakeholders and for society?
The second is embedding the goal in the organizational culture. So in the actual culture, in the org chart and in the processes and systems I talked about earlier.
The third is to establish the business case for each function and measure it against it with quantitative KPIs. The fourth is to link executive performance and pay to target outcomes.
And the fifth is to increase the goal or the sustainability function within the organization. And that is often done by creating a chief purpose or sustainability officer who reports to the CEO.
Todd Pruzan, HBR
Awesome. Well, John, this was a great conversation. Thank you so much for joining us today.
John Mennel, Deloitte
Thank you, Todd.
For more information about this conversation, click here.
This post Video Quick Take: John Mennel from Deloitte on how targeting delivers business value was original published at “https://hbr.org/sponsored/2022/03/video-quick-take-deloittes-john-mennel-on-how-purpose-delivers-corporate-value”
