Increasing company resilience is on the agenda of every board because of the recent turmoil caused by the pandemic. On thing the board can leverage to attain this objective is to transform its strategic plan around a statement of purpose. By articulating a clear purpose, anchored in measurable environmental, social, and governance (ESG) commitments and goals, companies can better deliver on societal expectations and governance can help achieve long term relevance for all stakeholders.
Two interesting articles by McKinsey to assist directors in the discussions around this topic. First, one that describes five steps for the board to help drive purpose: Build an authentic narrative; Own purpose in board practice; Set clear and measurable goals to deliver on purpose; Use the purpose lens in core board decisions; Evaluate management on purpose related achievements.
Second, a framework to help adopt purpose successfully, based on 5 pillars: Your portfolio strategy and how purpose influences your choice of product and services, People and culture that align with your core values; Processes and systems that embed and promote your purpose; Performance metrics that measure and reward achieving the right objectives; Position and communication that ring true to your stakeholders.
These concepts will help the board to implement the required changes to elevate the strategic agenda, but first and foremost, developing and adopting the company purpose statement must be an authentic strategic decision embedded in your business model, and not a branding exercises, otherwise it will fail.