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Purpose: A Lifeline To Survive In The New Reality

  • Jane Lawrie, Leadership | 

Dramatic change was already going to be a hallmark of the 2020s, but no one could have predicted that a global pandemic would have caused the economic and societal destruction we’ve witnessed these past months. It has forced leaders across the world to focus on why their company does what it does, according to our KPMG 2020 CEO Outlook. In this first study of its kind to measure CEOs’ priorities and concerns at the beginning of the pandemic and six months later, we can see that leaders at many of the world’s largest and most influential companies have begun to reconsider purpose as a key driver of success both today and in the future.

Businesses are being decisive, while leaning heavily on their purpose

After polling thousands of leaders in January and following up again several months later to see how perspectives have changed since COVID-19, the research found conclusive trends in how companies are renewing their sense of purpose to help guide decision-making:
 

  • 79% of CEOs feel a stronger emotional connection to their purpose since the crisis began.
  • 79% of CEOs have had to re-evaluate their organization’s purpose as a result of COVID-19.
  • 63% stated that the pandemic has shifted their focus towards the social component of ESG.

It’s no surprise that the pandemic has altered even the best business plan, but ultimately, after making sure their people are safe and accelerating their digital transformation, the c-suite has also refocused attention on their company’s purpose. Our 2020 CEO Outlook points to how CEOs are considering the needs of a wider group of stakeholders. As the world raises its expectations of businesses and their leaders to do the right thing – beyond the bottom line – more CEOs are taking personal responsibility to address societal challenges.

While the E in ESG continues to be business critical, organizations are turning their attention to the S of the ESG agenda. The increased pressure on society through the combination of a health crisis and resulting economic uncertainty is leading businesses to stretch beyond the old remit of corporate responsibility. Businesses are recognizing this goes deeper and needs to be embedded in its business model. Whether that is through supporting its own people in managing their wellbeing throughout lockdown and ongoing virtual working, or by taking action to support its supply chain, the results in this study suggest we will see an uptick in the role businesses will play in addressing fundamental societal issues.

Businesses can no longer afford to sit on the sidelines

Purpose-led business strategies are not new, but the pandemic has turned this into a business critical trend and the stakes are much higher now – today’s organizations will not likely remain passive agents for change in this new reality. This crisis has consumed the world on an unprecedented scale and many businesses that aren’t seen as part of the solution, or actively working towards it, will likely find themselves cast aside in its wake.

Health risk, climate change, income inequality, anti-Black racism and education, are just a few of the problems that must be dealt with on a grand scale. All have potential to disrupt markets and upend lives. It will need strong public-private partnerships to confront these challenges and it is clear that the business community takes its responsibility seriously. CEOs around the world could not be clearer in their view that purpose is a lifeline to guide decisions to ensure their businesses do good for shareholders, employees, stakeholders and society at large.

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