Businesses are traditionally judged on economic success – their turnover, strategy and profits – 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 – formerly RBS – 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: “Why even have a purpose?
“You can have a strategy – 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.
“For me when I think about purpose it comes down to that people expect more from banks and banks should expect more from themselves.
How NatWest is supporting BusinessLive
NatWest is the national partner of BusinessLive.
The banking group is teaming up with BusinessLive on a series of events throughout the year aimed at entrepreneurs and business leaders.
Alongside a wide range of banking services, NatWest offers businesses specialist sector knowledge in areas such as manufacturing and technology, as well as access to specialist entrepreneurial support.
“Is the role of a bank to make money off the back of their customers and deliver back to shareholders? I don’t think so and I think a lot of banks lost their way through the financial crisis with that.
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“I 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.”
He added: “When I step back and reflect on ‘if we’re not just here to make money, what is our role and how do we do it?’
"Then you come back to saying ‘our 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.
“If your strategy has meaning and your people have meaning then you all know what you’re focused on and it is a lens to make decisions through.”
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: “If you are in a purposeful organisation you will feel like a valued member of a winning team on a worthwhile mission.”
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He said: “That appealed to me because I was keen on ‘how do we engage and attract talent?’ If we have good talent then we will have people who will look after our customers well and look after and contribute to society.
“The pandemic has given us an opportunity to prove we would be purpose led.”
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: “The work we do is largely supporting social businesses and social businesses really have purpose at their very core.
“The whole point of being a social business or social enterprise is that ‘yes you’re 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’t have that purpose, you wouldn’t be a social business.”
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: “With start-ups I think purpose might be initially there but not articulated and as businesses develop then the purpose gets developed.”
He added: “I think when I start to think of purpose, when you distil it all down, the key purpose for us is to improve people’s lives, whether it is for clients or staff.”
Is it a selfish interest?
He asked NatWest how much of the purpose-driven agenda was “core” and how much was “PR” to improve reputation after the banking crisis.
Mr Whittick said: “I 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.
“I 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.”
Mr Fletcher said: “Is there an element of ‘does this help us? Is it a selfish interest’?
“There 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.”
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 – where that purpose, like for example on climate change, may clash with the client’s operations.
He said: “It 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.”
Lee Sharma, CEO of digital firm Simply Do, said: “From my perspective I think purpose is absolutely everything – it’s the fuel that keeps you going when you’re working late at night.
“It 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.
“I 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.
“We have done some soul-searching on our own purpose.”
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: “There is no reason why a purpose driven social enterprise can’t be as innovative or more innovative than others by virtue of the fact you are so committed to it because it is tied into your fabric and that you’ll get stuff done that nobody else will.”
He said on the NatWest move that the public will be cynical but that actions will be what convinces people.