What CEOs across the globe think of purpose

The last year and a half was a pivotal moment in world history. The pandemic had a profound impact throughout the world, but in some countries it coincided with events that inspired louder calls for social justice, democratic reform and action on climate change. As businesses were forced to reimagine the future of work, they also had a unique opportunity to reflect on their reason to exist – their company purpose – and the impact they have on the world.

Purpose and ESG became top of mind and tip of the tongue for global business executives in analyst calls and press releases. It wasn’t just about the pandemic; it was about the relationship of business — and the responsibility of business — to the world we share.

In this new world, how and why you exist is more important than ever – to employees, customers and shareholders – as was evidenced in our annual CEO Purpose Report, which measured the perspectives of 705 CEOs based in China, France, Germany, India, the United Kingdom and the United States. For the first time, more than 25% of CEOS stated they are now purpose-driven and 59% said they are developing or about to start developing a purpose statement.

The purpose spectrum

At Brandpie, we create purpose-driven transformation because we know businesses that use purpose as a means to create long term value are proven to outperform their competition. To help clients on this journey, we created a spectrum that classifies the different ways purpose is used by companies and how it could best achieve their business goals. The spectrum extends from short-term, profit-driven organizations to purpose-driven ones, where purpose is increasingly central to decision making within and across the enterprise.

At the most simplistic, “profit drivers” are companies whose only purpose is making a profit and maximizing short-term shareholder value. A step up is the “cause marketer” who deploys purpose in marketing to build a stronger connection with customers. Next is the “talent advocate,” where purpose is primarily used workforce culture considerations – employee recruitment, engagement and retention. The next group is “responsible citizen” where purpose is utilized to maximize social impact and corporate activities like diversity and equality, supply chain partnerships, environmental footprint and the communities they serve. Finally we arrive at the “purpose leader” where purpose is the central organizing idea that drives value creation – driving all business decisions, executive behaviors, internal values and hiring, brand marketing, social impact and sustainability.

Global perspectives

One of the most interesting takeaways from this year’s CEO Purpose Report was how the importance and prevalence of purpose varied from one country to the next. For example, 45% of Indian CEOs and 42% of American CEOs said that their company has a purpose statement – compared to the global average of 27%. In addition, 70% of French CEOs who don’t have a purpose statement said they want one compared to the global average of 59%.

Why do Indian and American CEOs lead their peers in the UK, France, Germany and China by such a wide margin? And why are the French CEOs so much more interested in developing a purpose statement?

Perhaps it has to do with how CEOs from these countries are using purpose. When it comes to where they land on the purpose spectrum, some regional CEOs were more likely to use purpose in a particular way than the global average:

• Profit Driver – UK and Germany: +5 percentage points
• Cause Marketer – China: +6 percentage points
• Talent Advocate – India: +5 percentage points
• Responsible Citizen – France: +9 percentage points
• Purpose Champion – France: +7 percentage points

At first glance, we see that CEOs from France are much more likely to use purpose in a way that is central to the company – to shape internal culture, manage customer-facing brand communications, guide business decisions and direct the company impact on society and the environment. Indian CEOs are more likely to use purpose to be talent advocates, while China, the UK and Germany use purpose in more utilitarian, profit-driven ways.

What this means

It would be easy to correlate the data to cultural stereotypes, e.g. India’s massive talent pool, France’s liberal social values. While this could be true, the report clearly indicates that, despite operating in a global economy, the rate of adoption and the use of purpose does vary across national borders. CEOs will use whatever tools are at their disposal to attract talent, capital and profit — and wherever they are located, and whatever their aim, purpose is proving itself a good tool for the job.

If this year has taught us anything, it’s the importance of having a strong foundation. During the pandemic, company purpose provided both an anchor and a north star as 90% of CEOs with a purpose statement said that purpose has become increasingly important to the success of their business and has helped guide their companies through uncertain times.

This is not only a true testament to the power of purpose but a vision for how to navigate a future where employees, customers and shareholders are increasingly driven by a company’s commitment to the wellbeing of society and the environment.