A View from the CEO World
Social purpose has become fully ingrained in business. A new 2016 report (this is their 19th) from PwC among 1,409 CEOs in 83 countries was unveiled at Davos and found that 76% of CEOs define business success by more than the bottom line, 69% link their company’s purpose to their constituents’ needs and not surprisingly, 66% are witnessing more threats today (probably from some of these newer constituents). They regard customers at the top of their list in terms of who they are creating value for but plenty of others considered important such as government/regulators, industry peers, employees, supply chain partners and investors.
“The single table conversation covered the need to put purpose as well as profit at the center of a company’s strategy; the importance of transparency in an age of social media; the value of engaged employees in spreading a company’s story; and the need to build customer trust one person at a time. The comments were off the record, so I can’t report them in detail. But I can say the thoughtful conversation left me feeling more hopeful about the future than anything I’ve heard from Iowa or New Hampshire in recent weeks. The focus of business leadership has changed in the last decade, and even if that’s out of necessity, it’s a good thing.”
Moving on, when asked about the areas where they are making “significant” changes to respond to this wider societal and stakeholder demand, the top three areas cited are technology, risk management and interestingly, “how we manage our brand, marketing and communications.” A large 92% of CEOs said they are working on doing a better job at marketing communications, with nearly half (48%) saying they are making significant changes in this area.
Due to my profession, I was impressed that PwC had an entire section on measuring and communicating success. As the report says, “…it makes sense that leaders want to make sure that their organisation is very clear on what they stand for, and their distinctive advantage. We think this is why purpose/values (59%) and business strategy (54%) are the top-two areas that CEOs want to better communicate” Engagement and transparency are key factors in how companies are being evaluated today on the softer side of the ledger. These are important criteria to new recruits and to keeping top talent. Companies can no longer hide the bad news and claim to be one thing externally and yet be entirely different internally. CEOs are wise to focus on insuring consistency in their communications and being transparent above all else.