Business is seen as unethical – how to use purpose to battle mistrust
Earlier this week I was talking to a friend who works at a large multinational. We discussed some of the production decisions they’re making for one of their very popular consumer products.
They will be building and selling millions of these globally. As he is battling for some of the production decisions to go his way, he told me how the extra investment of a couple hundred thousand euros stood in the way of making the sustainable choice for using renewable plastic.
One side effect of the global oil price collapse is that the cost of virgin (or new) plastic has plummeted as well. The resulting cost efficiency of using virgin plastic now seems to be the deciding factor in this big production decision.
Misalignment leads to mistrust
Admittedly, a short term focus on lower level needs of the Maslow pyramid (company survival, job security) seems like a sensible business choice in these uncertain times. But in this example the decision is based rather on old habits than a crisis-led consideration.
This is quite frustrating, especially as this particular company is currently working on a purposeful transformation. It shows just the type of misalignment that’s currently leading to a growing mistrust of the public in large organizations. Misalignment between top-level and mid-level management, between short-term and long-term shareholders, between company, society, and employees. It is why people feel that businesses say one thing and do the other.
The consequences are huge. Edelman’s latest trust barometer shows how capitalism is under fire, with 56% of respondents feeling that capitalism as it exists today does more harm than good in the world. In general, business is seen as unethical.
Now, It would be fair nor realistic to blame the full extend of these data on misalignment. But in this misalignment lies a huge opportunity for purposeful growth.
An opportunity for purposeful growth
In this case, high-level purpose ambitions and a purpose strategy have been established. But the success of mid-level managers is still measured by cost-effectiveness and profit margins. Their decisions are based not on unwillingness to make a positive impact, but on the KPI that will determine their continued enrollment.
Companies can be(come) a force for good. And luckily, most of today’s business leaders seem to have heard the message (you’ll find loads of articles on purpose driven businesses in our databases of 100+ articles on purpose). We’re actually enrolling sustainable and purpose strategies on a daily basis.
The opportunity here, is that some of your important stakeholders in this transformation have been on board for years. The example in this article confirms what we see on a daily basis. Employees want to contribute and make sustainable choices, they want to make the right decision! The only thing they need is a little nudge.
Transform intention into action
We need to bridge this purpose gap. Sacha Göddeke Mulder said it well: ‘I think it’s not necessary to always make the collective choice, to always act in the most sustainable way. We are free to make individual choices sometimes. One change I think we DO need to make, is that we need to always CONSIDER the sustainable option.’
Employees need to feel that they have the space to make a sustainable decision. They need to feel that they have a personal perspective to act sustainably and in line with their purpose. This is why purpose needs to be embedded in the core of an organisation, and it’s one of the reasons why GoodUp exists.
In collaboration with Great Place To Work, we wrote a full playbook on how to embed purpose in the core of a large organisation. It’s still available to download for free: purpose.goodup.com