For many of us, it’s a familiar process. You go through a crisis. You spend years soul-searching, wondering what went wrong and how you let things get to that point. You come to the uncomfortable conclusion that somewhere along the line, you violated your own principles.
But when you’re in charge of a public corporation, righting that wrong and renewing your sense of purpose can be a costly endeavor.
“We’ve seen a huge change since 2008,” Andrew White, an associate dean at the Saïd Business School at the University of Oxford, told The Huffington Post’s Jo Confino at the annual World Economic Forum in Davos, Switzerland, on Friday. “Many organizations are pondering, looking at, trying to understand what their purpose is, but… at many levels it can be in conflict with what they’re already doing.”
Take, for example, CVS Health. The pharmacy chain lost a $2 billion-a-year revenue stream when it banned tobacco products in late 2014. But the company, which already operates 9,500 locations in the United States, wanted to tap into the ballooning health care market. To do so credibly and earnestly, it had to make sacrifices.
CVS Health “thought hard about what its purpose was, which is health care, and thought there’s something wrong if a person goes to collect a prescription for medicine and buys cigarettes at the same time,” White said. “They took a $2 billion estimated hit on their revenue, but aligned their organization with purpose.”
Other industries could take heed. Food behemoths such as PepsiCo aren’t so credible as companies that care about “human sustainability” when they peddle soda filled with sugar and corn syrup to a country wracked with diabetes and obesity.
“There’s a challenge there,” White said. “I would call that a paradox. There are two truths, and it’s difficult to see how that is surmountable and how you work through that.”
Most people believe chief executives spend too much time focusing on short-term financial results and lobbying, and not enough time on creating jobs or figuring out how their companies can have a positive, lasting effect on society, according to the 2016 Edelman Trust Barometer, a massive global survey.
To address this, White laid out a formula by which companies can successfully align themselves with a real, genuine mission:
1. Figure out what the company stands for.
“First of all, it’s about understanding it.”
2. Put leaders in place who are driven by that purpose.
“It’s about brave leadership and individuals who are prepared to do things, certainly in the short term, which could be harmful to the corporate performance.”
3. Be patient.
“It’s about recognizing that a paradox takes time to resolve, so it’s not something that will be done in the short term.”
4. Find opportunity in lost revenue.
“When something is taken down, when we prune back a rosebush, it creates space for new growth. That’s where the innovation and growth agenda comes in.”
Read more: www.huffingtonpost.com