With so many business-critical issues demanding CEOs’ attention, should they also be expected to take responsibility for the development and deployment of a corporate talent strategy? Laurie O’Donnell of Cornerstone Beijing, says that, actually, they expect it of themselves.
In PwC’s 2016 Global CEO Survey, over 1,400 executives were interviewed from 83 countries and a wide range of sectors. Leading organisations in a changing world was cited as a key challenge, as well as the speed of this change. Determining future talent requirements and people strategies was also reported as a business critical issue. Rapid changes in technology, and the rate of change, as well as global political events and economic shifts also featured high on the list.
Less expected was the issue of ‘corporate purpose’ – what a company stands for, what products it makes, and how it treats the environment and its employees. It is clear that CEOs have come to realise that employees are looking to work for organisations and leaders that they admire and/or believe in or trust.
Of course, many senior leaders profess to a deep-rooted commitment to their people, but there is a danger if employees see and experience a disparity between such claims and what happens in practice—how employees are really treated—that a company’s reputation will suffer irreparable damage. This disconnect is bound to create repercussions in engagement and retention, and is an incubator for cynicism.
Walking the talk
How do leaders who make statements about leading with purpose demonstrate this value?
Denise Morrison, CEO of the Campbell Soup Company, since 2011, says that one of the first things she had to do was to add the value of courage to the core values of the company. “I encouraged people to take bolder moves and bigger risks – all with the highest integrity.” A decisive move that, she says, created a “very aspirational value for us.”
Employees had to be trained to make decisions more quickly, which, based on who needed to be informed and how many people need to be involved, was a challenge for many. Morrison also changed the management of talent from measuring activity to setting objectives and measuring an individual’s performance based upon their contribution to the organisation as a whole.
“‘Purpose’ isn’t selling more products and services – that’s a goal of every business. ‘Purpose’ is the compass that guides your business and serves as a filter to make decisions. It inspires employees to drive your company’s performance and it strengthens your connection with consumers and their values.”
—Denise Morrison, CEO, Campbell Soup Company
Performance with purpose
Indra Nooyi, CEO of Pepsico, has led this organisation of over 185,000 employees in 200 countries since 2006. When she was first appointed, she held town hall meetings with the employees. Few people said that their focus was their pay cheque – they wanted to build a life not just secure an income. They spoke about consumers being more conscious of health and wellness.
“‘Purpose’ is not about giving money away for social responsibility. It’s about fundamentally changing how to make money in order to deliver performance – to help ensure that PepsiCo is a ‘good’ company where young people want to work.”
—Indra Nooyi, CEO, Pepsico
Exemplary leaders have differing styles, approaches and missions, but they all share the knowledge that the people strategy is inseparable from the business. It could be argued that the opinions of 185,000 people (the employee base of PepsiCo worldwide), is a window into what the wider public may be thinking. When asked if she would accept lower profit margins to follow her values and “do the right thing”, Nooyi answered that, “‘Purpose’ does not hurt margins. ‘Purpose’ is how you drive transformation.” She acknowledged that if the company had not tackled its environmental issues (especially with water) then PepsiCo would have lost their licences in many countries. Recognising that there are consequences when changing a company culture she agreed the process of change can hurt the profitability in the short term. “Transformations sometimes hit your margins or top line because things don’t always go in a straight line. But if you think in terms of the life span of the company, these are just small blips,” she says.
These messages of purpose stated by Nooyi and Morrison have set the direction of these companies. Their actions have given credibility to their message. The courageous changes that both have made to their respective company product lines address not only consumers’ concerns but also deliver a message to their global workforce, something that is particularly important in terms of future employees.
The future workforce
Millennials (born from 1980 to 1995), as well as Generation Z (those following millennials), make up a growing portion of the workforce. This demographic shift will see Millennials making up to 50 per cent of the workforce by 2020. Their goals and motivations are very different from the previous generations. They are looking for tangible things like a comfortable lifestyle, but also the intangible – a chance to achieve something of value and a feeling of connection and purpose.
The world is changing and it is a deeply challenging time to lead. But it is this very challenge that has opened the door for CEOs who can articulate purpose and drive new opportunities.
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