During challenging times, companies with purpose are often better positioned to adapt and endure than peers without a purpose. Why? Purpose serves as a vision and lens for smart decision-making during both good times and bad. More than just a reason for existing, purpose can help leaders prioritize stakeholders, redirect resources, and more precisely respond during crises such as COVID-19.
Historically, what we today call purpose is based on the evolution of various linkages between companies and causes, from philanthropy and cause branding to corporate citizenship and CSR. COVID-19 is forcing the next iteration of purpose, one that falls in line with the emerging stakeholder capitalism movement. This is taking shape as “smart generosity”—the innovative application of a company’s resources (cash, personnel, operations, reinvented products/services) toward an urgent social issue, which puts the needs of stakeholders before short-term profits.
Think: Allstate returning $600 million in premiums back to customers who are driving less; Microsoft offering 12 weeks’ paid parental leave to any full-time employee juggling homeschool with work; or Dick’s Sporting Goods’ CEO and president forgoing their salaries for the year.
Given the unprecedented nature of this pandemic, these corporate actions were not planned for or forecasted. But many were guided by a core purpose, strong corporate values, and a commitment to do the right thing for all stakeholders—not just shareholders. In fact, “shareholders come last” in the pandemic, Mark Cuban said to Just Capital. We will only come back stronger if companies focus on supporting their employees and all the other stakeholders critical to their business growth.
Here’s how companies are putting their purpose to work through smart generosity:
1. They’re putting employees first
Employees are at the core of an authentic organizational purpose. Where, how, and why we work will be transformed by COVID-19 as companies realize the vital role that all levels of employees play in the overall health and success of their business. Companies are not only instituting enhanced or extended sick leave benefits and policies, but increasing pay for frontline workers (Campbell’s, CarMax, Corning, Nestlé), freezing layoffs (Danone, Yum Brands), providing spot bonuses or childcare support (Workday, PwC), and more.
2. They’re responding with creativity and innovation
Companies across sectors are creatively utilizing their products, services, and operational capabilities in response to the pandemic. Unilever took fast action to ease the financial instability for their most vulnerable small and medium-size suppliers by pledging early payments, technology companies are giving their services away for free or lending supercomputing power to researchers, and manufacturers are redirecting their capabilities and manpower to create medical devices. Apparel companies are directing their materials and personnel toward making nonmedical masks to help slow the spread of the disease, while others are halting normal production to manufacture PPE for healthcare professionals.
3. They’re collaborating with others
Despite mixed political messages from leaders around the world, companies, NGOs, and individuals are self-organizing to do the right thing. Companies are collaborating with their peers and with governmental and NGO entities to find creative solutions, from developing a vaccine to 3D-printing medical devices to opting for underutilized shipping lanes for faster delivery times. Lineage Logistics, a cold storage, food transport and processing company, joined supply chain and nonprofit partners to create the “Share a Meal” campaign. Through this, Lineage will provide 100 million meals to Americans in need, guided by their purpose “To Feed the World.” More than 110 live event companies in the U.S. have come together in a coalition, called Live for Life, that is lending construction capabilities, logistics expertise, raw material inventories, and labor to build temporary hospital rooms, testing centers, and emergency treatment rooms.
4. They’re evolving their own purpose
When society eventually begins to normalize, the concept of purpose will be forever changed. Employees, consumers, communities, and supply chain partners will expect even more of companies to provide a safety net to their needs: for healthcare, sick leave policies, rebalancing of work and family life, and support for their local communities. Companies will act more selflessly and based on deeply set values that continue to earn them a license to operate and to lead. Most of all, they’ll take what they learned from the pandemic and reprioritize what matters most.
Whether you’re a company evolving your purpose through the pandemic, or realizing the vital need for purpose, I hope you consider the following: Evaluate the new needs of all stakeholders, not just shareholders, to respond to the zeitgeist shift to a “stakeholder capitalism” model. Listen. Observe. Utilize all your resources, not just funds: people, products, services, operations, and partners. Evolve the empathetic actions taken during the pandemic to serve employees first, then customers, citizens, and communities. Embrace the humanity, interconnectedness, and kindness we have seen from so many throughout this pandemic and emulate those behaviors in your business culture, operations, and future community engagement.
Carol Cone, CEO of Carol Cone On Purpose, is one of the foremost experts in social purpose, having pioneered early social impact initiatives in the 1980s. She champions innovation in social purpose, continually working to accelerate its evolution for business and social impact with the power to change the world.
Kristin Kenney, Senior Associate at Carol Cone ON PURPOSE, has spent her career helping dozens of private and public sector companies bring their social impact to life. She firmly believes that business can and should profit with purpose.