This disturbing declaration came from a 2017 study of millennials by Deloitte, a financial and risk management company. Deloitte has been surveying millennials for the past 6 years and this year they found more general anxiety about the future than ever before. The concerns expressed included terrorism, income inequality, crime and corruption and climate change. Interestingly, the participants regard businesses as a force for social impact, however, they believe that companies are falling short in applying their capabilities to alleviating society’s challenges. So where is the disconnect between what millennials believe corporations could contribute versus what they think they are doing to address these overwhelming social issues?
Last month Katrin Muff’s blog was related to this theme. She wrote about her frustration with companies that cannot see beyond their own short-term self-interest. Obviously, she is not alone with this grievance.
Over the past few years, the news has been filled with stories about companies that acted solely in their own self-interest with calamitous consequences. Consider the Volkswagen emissions scandal or BP’s Deepwater Horizon oil spill in the Gulf of Mexico. These companies flagrantly neglected all responsibility to the environment in pursuit of profits. And, thus, both companies suffered reputation and financial damage.
While most companies do not commit fraud as was the case with VW, many do operate as if their only reason for existing is to create as much wealth as possible for their shareholders. These companies describe themselves by the products they make and the profits they generate. Consequently, they are in danger of becoming irrelevant to customers, employees and investors, all of whom are becoming increasingly impatient with corporations that lack any social purpose.
On the other hand, many companies do take their responsibilities to society very seriously. Rosabeth Moss Kanter, a widely-recognized expert on organizations, says that an increasing number of successful companies emphasize purpose, values and long-term institution building. These purpose-driven companies believe that they are inherently connected to society at large, and thus have obligations as members of society beyond mere economic transactions. That is not to imply that financial success is unimportant to these companies. In fact, Kanter says that they embrace financial success partly if not wholly so that they can carry out their commitments to society.[1] And in fact evidence from a 2014 Deloitte study shows that companies focusing on a broader purpose are more likely than others to achieve success for the long-term. The confidence that stakeholders place in these purpose-driven companies tends to lead to investments and growth.
Most of us want to work for companies with a distinct purpose and clear values. A 2016 study of purpose in the workplace conducted conducted by the consulting arm of PWC, showed that a large percentage of all generations in the workforce, not just millennials, want to find purpose in their work. The study emphasized the following:
“A truly purpose-driven company must have purpose as its guidepost for decision-making—including the opportunities it decides to pursue and not pursue—to demonstrate commitment to responsible business leadership.”
Unilever, the company that Katrin cited in her blog last month, serves as a great example of a multinational corporation that lives its purpose every day. Their vision is as follows:
“Unilever has a simple but clear purpose – to make sustainable living commonplace. We believe this is the best long-term way for our business to grow.”
This purpose is embedded in all of Unilever’s decision-making including how they interact with their shareholders, as well as how they develop and package new products.
It is time for all companies to critically examine their roles in society. Certainly, at times our global challenges can seem overwhelming so it is no wonder that we will see alarming headlines about millennials’ pessimism! Nevertheless, we can’t become so discouraged that we are paralyzed. It is time for all companies to act with purpose.
Of course, the business community alone can’t fix everything. However, those of us in this community can and should contribute to finding solutions to our world’s challenges, which, at the same time, will help us make our businesses more profitable and sustainable. And those not working in the business community can and should hold us accountable for more than merely creating wealth for our shareholders.
[1] Kanter, R.M. (2015) How purpose-based companies master change for sustainability. In R. Henderson, R Gulati and M. Tushman (Eds.), Leading Sustainable Change (pp.11-139). Oxford, United Kingdom: Oxford University Press.
Author: Dr. Kathy Miller Perkins
Dr. Kathy Miller Perkins is a social psychologist and is the CEO and owner of Miller Consultants , a firm specializing in organizational development, executive coaching and change management. Her work involves helping companies create and sustain organizational cultures that are conducive to executing sustainable strategies. She has worked with companies such as Toyota, IBM, Kindred Health, Brown-Forman, Lexmark, Anthem, Ashland Chemical, the U.S. Military and BC Hydro.