Finding purpose rather than inventing it
“Talking Heads” as part of the Perikom Good Practice series.
Hasn’t purpose always been there? Does everyone still need to save the world? Where does Purpose fit into the catalogue of values? How does Purpose work in practice? There were enough questions for the event organised by Heads and Perikom on 25 April in the auditorium of the new building of the National Museum. Occupational psychologist Dr. Felix Frei, Dr. Barbara Wicki from Cembra Money Bank and Christoph Sieder from ABB were not at a loss for answers and provided some surprises with their views.
The industrial psychologist Dr. Felix Frei opened in plain language. With 11 theses, he criticised the “phrasemongering of the management guild”. In his opinion, the language of managers has reached a temporary low point. Managers are overwhelmed by digitalisation, he said, but it is not right for managers to admit uncertainty. So they look for security in a purpose that will make everything work. And the task of finding a purpose is then delegated to HR and communications. But they should not allow themselves to be misused for this purpose, because the solution lies in the hands of management. The core of this music is in the line, not in the formulations of the communications department and the missionary work of HR. Unfortunately, leadership is increasingly seen as something you can do rather than something you have to do. Everyone is supposed to work independently, on their own responsibility, so that the boss can have his peace. And when it suits you, you lead and micromanage. Managers should be encouraged to constantly fulfil their leadership role and create meaning. A purpose is valuable, but only if it builds on the past and does not give the impression that it is something completely new and unrelated to the company’s history. Purpose should be presented with a degree of humility and should not be set too high.
Dr. Barbara Wicki, Head of Organisational and Personnel Development at Cembra, asked the rhetorical question right at the beginning: A bank with a purpose? Rather not, she said. Consumer loans, credit cards and leasing are not going to save the world. And that is why Cembra does not want to ascribe a higher purpose to itself. But of course it has to make sense. The purpose is to make things as easy as possible for customers. And in order to make it easy for customers, employees must be offered the best development and design opportunities. If you give people a lot of freedom, they will innovate in the interests of the company. And if employees are valued, this will be passed on to customers. To this end, Cembra has been on a cultural journey since it replaced GE Money Bank in 2013. This is not a straight line, it is winding and probably never ending. However, a milestone has been reached: In 2019, Cembra was awarded the title of the fifth best Swiss employer by “Great Place to Work”. This award came as a surprise to Cembra, as internally there were still many points to work on as an employer. This spring, the company launched a new initiative to create something fundamental: a strong culture of trust that enables real team spirit. Her conclusion: It’s possible without a higher purpose, but it has to make a lot of sense and inspire ambition at all levels.
Christoph Sieder, Head of Global Corporate Communications at ABB, began his presentation by looking back to 2014, when management was tasked with launching a strategic repositioning as a technology group focused on digital industries. A survey of business enthusiasts aged 24 to 60 in Switzerland at the time showed that ABB was still very much associated with its past: 70 percent of respondents were convinced that ABB was in the business of power generation, and 60 percent saw ABB as a manufacturer of trains and locomotives – businesses that ABB had divested decades ago. Today, ABB is the third most valuable brand in Switzerland and the most valuable Swiss technology brand. The change has a lot to do with purpose. What is important for Sieder, however, is that he is no friend of Purpose’s communication. “I find this soul striptease that’s going on at the moment completely perverse and partly incomprehensible.” Purpose, he says, is the innermost thing a company has. To communicate this is negligent. That’s why you won’t find a statement of purpose anywhere within ABB. What you would find, however, is a communication that develops from this brand core. Sieder is convinced that an appropriate purpose, one that gets to the heart of the company’s “higher purpose”, increases stakeholder identification with the company. But if you try to use money to buy into issues that are relevant to society but no longer have anything to do with the company, you are taking a big risk. Anyone who sets out to be the saviour of the world will look untrustworthy. ABB has developed its purpose from within and discussed it with all its stakeholders. What this purpose is called is up to the participants. However, it did lead to the well-known positioning “Pioneering technology leader” and the communicated brand promise “Let’s write the future. Together.” To establish this positioning worldwide, ABB looked for a suitable platform and found it in Formula E. It stands for high-performance solutions for a future of intelligent, reliable and emission-free mobility and for the demands of the digital and networked world. ABB bet on this “start-up” Formula E because it stands for technology leadership, innovation and a certain boldness. “ABB Formula E” offers the opportunity to emotionalise the brand from its core. This is paying off. “Fortune magazine”, for example, recently ranked 40 companies with the potential to change the world, and ABB was number 8 on the list. That makes employees proud, creates loyalty and motivates them to recruit new talent for ABB. And compared to the previous year, ABB received twice as many unsolicited applications in the highly competitive target group of engineering students. Sieder’s conclusion: A purpose creates value, but only if it is lived holistically within the company. To achieve this, top management must lead by example and create a culture of leadership. And it is important to ensure that employees understand the purpose so that they can credibly communicate it to the outside world.
Closing of the evening
There’s no point in inventing a corporate purpose. It’s risky to think of yourself as having a higher purpose, because if you spout phrases and act like you’re saving the world, you make yourself vulnerable. It is much more a matter of recognising the true core of the business and making sure it is known. Companies should find their purpose, but not just project it one-to-one to the outside world. Rather, purpose should be understood as an internal compass – for management, for leadership and culture, and for employees.