The Davos sceptic would be surprised to learn that a morning meeting on “purpose” was at capacity. Indeed, there is a palpable interest at this year’s World Economic Forum Annual Meeting in how corporate leaders can do more for their employees, their stakeholders and their communities.
Celebrated Chobani CEO, Hamdi Ulukaya, did not mince words in his advice for the gathering of world leaders. “I grew up hating CEOs … and hating business … so when I started mine, I wanted to try not to be the person I hated.”
To do this, Ulukaya took a different approach to many corporate leaders when looking at employee compensation.
“How do we ensure that everyone gets a fair share?” Ulukaya asked, when discussing corporate profits, adding that, “this starts with your own town, your own city and your society.” This immigrant to America explained that he “needed to make everyone part of the success” of his company, and thus, “employees have 10% of the business.” He called for other CEOs to find a sense of urgency, to work to close the gap between rich and poor.
David Taylor, Chairman of Procter and Gamble, highlighted the “whole idea of touching and improving customers’ lives to create great value.” He explained that, “Once you have a purpose aligned with doing the right thing, then you can decide where you want to make a difference.”
One of the ways P&G works to create impact is by using their voice to make a difference in the world. Advertising is often not focused on the product, but the purpose – “to connect with customers on issues of global concern” – such as empowering women and girls [with their Keep Playing Like a Girl campaign for the Olympics].
For some companies, purpose is so engrained into the organization, it is now a tradition. So explained Natarajan Chandrasekaran, CEO of Tata, who highlighted their corporate support for trusts and charities, – which goes back over 100 years. This is combined with a business practice to “do good and do well” at the same time. For example, Tata runs a software development group in Saudi Arabia that employs 1,000 women – a project that has purpose, but importantly, “it’s profitable.”
For the CEO of EY, Mark Weinberger, these examples are illustrative of the need for business “to focus on something larger than their bottom line” – adding that companies, “need to look at the bigger picture and invest for the long run.”
For Weinberger, the long-term view includes employee satisfaction, giving purpose to one’s team, and focusing “less about what we do, and more about what we can do.” This is because, “there is a great relationship between profit and people in the company.”
“Purpose needs to be imbedded into the core of the business,” said Alix Zwane, CEO of Global Innovation Fund and a World Economic Forum Young Global Leader. This is because CSR is rarely impactful.
“Forget about CSR,” said Zwane, as it often “suffers from pilot-itis, never fails and never scales.” Rather, true purpose needs to be measured, so you can determine the societal value you are making.
Randall Lane, Editor, Forbes Magazine, explained that his magazine conducted a survey of Americans to see what makes a good company. When the results came back, “50% of the weight” came back as “how you treat your employees and how you pay your employees.”
As summarized by Ulukaya, America’s champion for hiring refugees, “What they are saying, is don’t just tick the box,” but “be authentic” and live the purpose that your company claims to have. Indeed, powerful words from the man who pays his employees a premium, and gives them 10% of his company.