Businesses are traditionally judged on economic success 鈥 their turnover, strategy and profits 鈥 but increasingly the public are looking to companies to take a lead on creating a better society, be it on climate change or racial equality.
One big brand that says it has put purpose at the heart of all it does is the NatWest Group 鈥 formerly RBS 鈥 with chief executive Alison Rose wanting to fully restore a reputation badly tarnished during the 2008 financial crash.
This month it organised a virtual round table with Business Live and some of its business customers to discuss the importance of purpose to an organisation.
Bruce Fletcher, chief risk officer, NatWest Group, said: 鈥淲hy even have a purpose?
鈥淵ou can have a strategy 鈥 there are plenty of companies out there who just have a strategy and that can work. You can have products and services and focus on making them better.
鈥淔or me when I think about purpose it comes down to that people expect more from banks and banks should expect more from themselves.
鈥淚s the role of a bank to make money off the back of their customers and deliver back to shareholders? I don鈥檛 think so and I think a lot of banks lost their way through the financial crisis with that.
鈥淚 think there is a much broader role and people expect more in terms of supporting their businesses, to help them thrive, helping individuals when they need help, and helping the economy.鈥
He added: 鈥淲hen I step back and reflect on 鈥榠f we鈥檙e not just here to make money, what is our role and how do we do it?鈥
"Then you come back to saying 鈥榦ur role is really if our customers thrive and our stakeholders thrive and we keep them all happy then I think that you create a strategy on the back of that, that gives you much more.
鈥淚f your strategy has meaning and your people have meaning then you all know what you鈥檙e focused on and it is a lens to make decisions through.鈥
He believes having that lens has shown through during the Covid crisis, with moves like payment holidays for mortgage holders.
Purposeful organisation
Rob Whittick, director for the office of the CEO, NatWest Group, said the bank engaged a company to work with them to develop what purpose meant and one statement particularly resonated with him.
It was: 鈥淚f you are in a purposeful organisation you will feel like a valued member of a winning team on a worthwhile mission.鈥
He said: 鈥淭hat appealed to me because I was keen on 鈥榟ow do we engage and attract talent?鈥 If we have good talent then we will have people who will look after our customers well and look after and contribute to society.
鈥淭he pandemic has given us an opportunity to prove we would be purpose led.鈥
He said this was shown by the quick rollout of government schemes and also turning their Edinburgh headquarters into a foodbank to serve the community.
Jessica Shipman, regional director Corporate and Commercial Wales and NatWest Cymru Board member, Co-Chair, says they have never felt better connected to their purpose.
Purpose at their very core
Catherine Evans, leading on Policy and Communications at Wales Co-operative Centre, said: 鈥淭he work we do is largely supporting social businesses and social businesses really have purpose at their very core.
鈥淭he whole point of being a social business or social enterprise is that 鈥榶es you鈥檙e a business, you make profit, but crucially your profit is there for a good cause, your there to have a beneficial impact on the environment or society.
"If you didn鈥檛 have that purpose, you wouldn鈥檛 be a social business.鈥
She says it makes a huge difference to customers and employees, with more loyalty and innovation.
Stephen Lucey, managing partner, Haines Watts chartered accountants, said they see this issue on the SME side.
He said: 鈥淲ith start-ups I think purpose might be initially there but not articulated and as businesses develop then the purpose gets developed.鈥
He added: 鈥淚 think when I start to think of purpose, when you distil it all down, the key purpose for us is to improve people鈥檚 lives, whether it is for clients or staff.鈥
Is it a selfish interest?
He asked NatWest how much of the purpose-driven agenda was 鈥渃ore鈥 and how much was 鈥淧R鈥 to improve reputation after the banking crisis.
Mr Whittick said: 鈥淚 think society is changing and I think you have to change, whether you see that cynically because have to change because society changes, but Alison certainly wanted to turn a page, she wanted to have purpose for the right reasons.
鈥淚 do genuinely believe, having worked closely with Alison for a few years, she wanted to make that change, wanted to make a contribution to society.鈥
Mr Fletcher said: 鈥淚s there an element of 鈥榙oes this help us? Is it a selfish interest鈥?
鈥淭here will be benefits. In my role in charge of risk management, if this company ever gets into financial trouble again I will be in a tough
spot, having a purpose, selfishly brings to me stronger relationships with customers, it helps us thinking long term to make sure we have
capital and liquidity through the ups and downs and selfishly helps the
firm survive.
"So the purpose will help us as a firm.鈥
But he said there were real roots to this and it was very genuine.
He said the test will come where purpose means potentially difficult decisions about customers they are working with 鈥 where that purpose, like for example on climate change, may clash with the client鈥檚 operations.
He said: 鈥淚t is easy to say at the beginning but it might be harder one, two, three years from now. You have to really show and prove you are living your purpose in the decisions that you make.鈥
Lee Sharma, CEO of digital firm Simply Do, said: 鈥淔rom my perspective I think purpose is absolutely everything 鈥 it鈥檚 the fuel that keeps you going when you鈥檙e working late at night.
鈥淚t is good to see when have large organisations committing to purpose but the old cynic asks, why? If that is really trusted and transparent I think it can only be a good thing.
鈥淚 always think organisations that are purpose-driven will also be more successful across the board, commercially they will deliver more impact and they will achieve whatever their purpose is.
鈥淲e have done some soul-searching on our own purpose.鈥
He said they had started out as a social enterprise and there had been some sneering at that with a belief it would be less innovative.
He said: 鈥淭here is no reason why a purpose driven social enterprise can鈥檛 be as innovative or more innovative than others by virtue of the fact聽 you are so committed to it because it is tied into your fabric and that you鈥檒l聽 get stuff done that nobody else will.鈥
He said on the NatWest move that the public will be cynical but that actions will be what convinces people.
