Why the purpose of your business will be the backbone of the recovery

Authors of the article

This article is a special collaboration between Des enjeux et des hommes (E&H), Ellio and Management&RSE, and was part of the activity on purpose which took place at the Sustainability «Parcours» in the fall of 2020.

The PACTE law, promulgated in May 2019, enshrined purpose in French law, and allows companies to be recognized as companies with a mission in their statute. The health crisis we are experiencing today puts it on everyone’s agenda. In Quebec, this is an emerging subject, but very present.

We wanted to compare the Quebec and French approaches on the subject and their impact on organizations. On the French side, Agnès Rambaud-Paquin with the team at Des enjeux et des hommes (E&H), and her partner Martin Richer, founder of Management&RSE, have accumulated much experience on the subject in sectors as varied as agro-food, services, industry, real estate and distribution. They share their learnings on the subject. On the Canadian side, it is the Ellio Sustainable Strategies Consulting team that brings the complement of its experience, in Quebec in particular.

In France, with a brutal distinction of companies having a vital contribution to society and those with an ancillary contribution, the current crisis has questioned and should continue to question every organization on its role, and the means it equips itself to take part in collective issues.

The companies that found themselves without immediate utility and anxious to find one again, undertook exercises in self-reflection – examining their purpose and their legitimacy to work for the common good. Others sought, sometimes in vain, to find a way to help the collective and faced a void of meaning or means.

The consequences of this crisis, which we know are dramatic, are still difficult to assess. On the other hand, if there is one consequence that we can anticipate, it is that of having triggered a groundswell on the need to rethink the business world and the way it fits into the world. Indeed, it has provoked a quest for meaning that will lead to a collective rethinking of what makes women and men work together on a common project around a real societal utility.

“The contribution that the company wishes to make to the main social, societal, environmental and economic issues of its field of activity, by involving its key stakeholders, with a view to strengthening their collective capacity to achieve their ambitions for the common good. “

In a context where articles are multiplying on the need to ensure an ecological, equitable, safe recovery … the implementation of such an approach must be supported to help business leaders.

Convinced that the evolution of society will depend on the power of humans to lead change, Ellio and E&H have defined their purpose as being, respectively, (Ellio) ” develop the power of individuals to act, to help them transform their organizations towards more sustainable models, which bring value to society “and (E&H)” to promote the transition of organizations towards more sustainable models by providing actors with the keys to invent them with their ecosystem “.

What are we talking about?

Unlike France, there is no law in Quebec to encourage leaders to think about their purpose (or raison d’être). And this is probably preferable here for now. Only the B Corp certification frames and stimulates the notion of a private company with a mission. Apart from incorporated companies, two other legal statuses are available for business creators: cooperative or non-profit organization (including social economy enterprises).

In France, the content of the PACTE law and the nature of the process to be taken to express its purpose (raison d’être) or the “deliverables” to be produced, are still unclear. We often hear, for example, that companies are propelled by the purpose of their founders. Or that the process is superfluous since many of them have long lent themselves to the formulation of the corporate vision / mission / values triptych.

It should be stated at the outset that we are not talking about the same thing.

Thinking about its purpose does not mean questioning the company’s activity (Simon Sinek’s what), the service it provides to its customers, the place it intends to occupy in its market, or the particular way in which the company conducts business.

Thinking about corporate purpose comes down to questioning:
• the purpose of the company, beyond the interests of its shareholders
• the place of the company in its ecosystem
• the value it creates for its stakeholders
• its role as an actor of the common good beyond that of an economic actor
• its contribution today and tomorrow to the major challenges (the why, the purpose), given its power of innovation and intervention (which the world would be lacking if it did not exist).

To formulate its raison d’être is to revisit the very project of the company, in a context larger than itself of societal needs and planetary limits.

The teams of leaders and managers who have engaged in an unusual approach (introspection, taking a step back, foresight well beyond the time of their mandate), requiring a real reflection to find the right alignment and drive innovation. It is often an awareness of a more meaningful future.

Still few businesses in Quebec have managed to put their finger and words on their true purpose. Some have clear visions and missions, but the impact they have on society at large is rarely formalized. Our experiences in business show that thinking about the broader utility of the business is a topic very few leaders have questioned. However, the exercise often generates enthusiasm and has a strong mobilizing and creative effect. We also notice that not all the teams are ready to answer it and, often, a certain period of maturation is necessary for a business to pass from the classic vision to a genuine purpose.

To take its full effect, the raison d’être/purpose is intended to impact the entire company:

• Its strategic positioning and brand message
We therefore see more often a mission or a “about” than a purpose appear in the brand platform of companies, but these messages come closer to a purpose when the ambitions are very anchored in the values of the company. For example, Design by Judith Portier, one of our favorites of the Parcours Développement durable Montréal 2018, indicates that its mission is (among other things) is to “anchor the ephemeral in the sustainable to leave an unforgettable memory”. One can imagine the range of activities that can result from it.

Another example, BESIDE “seeks to build bridges between humans and nature, by developing immersive experiences and quality editorial content. We bring together ideas, knowledge, initiatives and fascinating stories, capable of propelling us, collectively, towards a more sustainable future ”.

ECOTIERRA is positioned as “a developer of sustainable agroforestry projects generating positive environmental, economic and social impacts. We are tackling one of the most pressing environmental issues of our time: deforestation caused by unsustainable land use. Work with small producers to use the land responsibly to accelerate the sustainable development of their communities, thus fighting against climate change and land degradation. ”

Its strategic orientations, its investment or disengagement choices:
Logically, these commitments will dictate the strategic choices of the company. However, one can imagine the complexity for an established company that was not created on these values, to make the shift and ensure consistency between the purpose and the activities. We observe a discrepancy between the corporate positioning, generally imagined in an executive room by a small group, and the operational choices. It is not uncommon for teams not only to not participate, but not even to be trained in how to apply this purpose in their trades. And when the question arises of turning down a customer because they are not aligned with our purpose, of paying extra cost to build a positive or WELL certified net head office, or to stop pressuring farmers to lower food prices, actions are often disconnected from corporate commitments. Decision-makers forget to take into account expenses over the entire life cycle of projects (the ROI is sometimes much greater when looking at a longer period, especially in energy transition or renovation) and neglect to take into account the extra financial benefits such as the mobilization effect, the retention of employees, the sympathy capital from the company’s social environment, its industry or its value chain, etc.

Reflection on the purpose is the prerequisite that leads to a profound transformation of the business model and practices, even if it is (still too) slow in light of the challenges facing humanity and our communities.

Some strategic choices seem aligned with a well-established purpose. Among the most illustrative French examples, the raison d’être of Veolia, which required months of reflection, responds to sustainable development goals, and irrigates all of its strategic plan and is expressed through 18 commitments made to stakeholders and 18 indicators that become the executive committee’s dashboard to manage the triple economic, social and environmental performance. These indicators are used to calculate a variable portion of the remuneration of senior group executives of up to 30%.

Another example in France, when Camif closes its e-commerce site on Black Friday, it is to be consistent with its intention to  Provide products and services for the home, designed for the benefit of ‘Man and the planet’ and ‘Mobilize its ecosystem …. to invent new models of consumption, production and organization.wpml_nbsp “. »

Closer to us, Mountain Equipment Coop uses organic cotton, certified Bluedesign eco-responsible materials, conducts research on microplastics, and repairs its products, etc. all because it wants to” a future where Canadians of all ages, and especially young people, participate in the outdoors more often and in ever-increasing numbers; that they have access to a diverse and proudly inspiring network of parks and protected areas, so that they feel closer to nature than ever before. The consumer cooperative wants MEC and its members to lead by example in encouraging other organizations and individuals to embark on the path of environmental, social and economic sustainability. In short, MEC wants to leave the world a better place than it found it ».

The team from Loco, the zero waste grocery, also a participant in the Parcours Développement durable Montréal 2018, aligns all its decisions with its ambition to “contribute to building an alternative, local and resilient food system by working in a short circuit with farmers and small businesses ”. This company is an entrepreneurial success and the initiator of a movement throughout Quebec. Many other examples are alive, especially in SMEs, which are often more agile in reviewing their strategy.

Its internal processes, its activities:
As part of our strategic Ellio support in Quebec (sometimes leading to Ecoresponsible or B Corp certifications), we can attest that structured plans allow commitments to percolate into internal processes and practices and that teams are asking for concrete commitments. Whether in procurement, one of the most promising vectors for making the company’s commitments to sustainable development a reality; partnership strategies with stakeholders, particularly community organizations; communication (and increasingly in brand platforms thanks to branding strategists who stand out for their convictions in this area); the use of shared governance and collective intelligence. Depending on the starting point of the company and its level of ambition, each variation is specific and meaningful.

We can clearly see here that adopting a superficial approach, which would avoid the complete diagnosis (of all activities), the sometimes difficult confrontation with stakeholders points of view and then the taking binding decisions, inevitably exposes people to the risk of “mission washing”. It is therefore preferable, if the company and in particular its managers, are not ready to initiate the process “in full mindfulness” or if the timing is not appropriate, that the project be postponed, to wait for the idea to come to pass.

The key involvement of management bodies

The level of mobilization of leaders appears to us today to be directly correlated with the capacity that the purpose will or will not have to become a driver of transformation. Their detachment could give employees the impression that the process is optional or only requires surface involvement on their part, when the opposite is expected.

Involving the administrators in the project is just as necessary, so much so that it is to them that the PACTE law in France gives the initiative to trigger reflection on the business purpose.

Yet, paradoxically, our colleagues in France find that many companies do not involve their board of directors until the end of the process, and some even forget it altogether. The case of SMEs is slightly different since many of them do not have a board, but for NPOs this commitment occurs more naturally. For example, at Communautique, board members are an integral part of the reflection activities. At EXO, the para-municipal entity that manages public transport in the Montreal metropolis, co-development meetings with both the board and management have taken place, to align the ambitions of the various leading groups in the organization.

Consultation, or even better, the engagement of external stakeholders

A number of companies do not plan to involve their external stakeholders, considering that the purpose is above all the expression of commitments that can only spring from a phase of internal introspection.

With regard to expressing the company’s purpose, its contribution to the challenges that affect external stakeholders (customers, residents, etc.), of which they are partners (suppliers), or spokespersons (NGOs, media , etc.), it seems essential to us to take their point of view into account at one point or another of the process and to identify collaborative approaches that could have a greater impact.

More distant stakeholders can provide a relevant mirror to internal stakeholders on rationale propositions and their concrete applications in operations.

It is useful to map the organisation’s (or project’s) stakeholder categories early in the process (e.g. once the purpose of a real estate developer has been identified, we will want to redo the exercise for each real estate project, to adapt it to its specific environment). One can then decide on the best engagement strategy (between simple communication towards the neighborhood and the creation of partnerships with urban farmers or community organizations in the real estate project, there are a multitude of relevant and creative mechanisms for more impact).

In fact, companies in the socio-ecological transition go much further than that: the company could decide to invite any stakeholder to be involved in its governance (on the Board of Directors or other decision-making body). This can go as far as future generations … The idea is to seek a diversity of points of view, which will not just have an interest of “good financial management” as in a classic board of directors.

An approach to be equipped

Formulating a raison d’être is a challenge that involves focusing on the question of the “why” of the business (its purpose). However, when everyone is focused on daily performance, it is easier to collect testimonials on what the company does (the “What?”) Or on how to do it (the operating mode, the “ How? ”) Than to obtain the type of answers sought.

Hence the need, in this quest for the precious “WHY”, to get out of business practice in order to gain an advantage point.

Many techniques are available to get people’s minds off the ground (visionning, appreciative inquiry, design thinking, etc.). Far from the gimmicky effect, mastering these techniques (phases of emergence and convergence) is key to optimizing the production of the groups involved.

We were able to experience the complementary and essential contributions of different approaches.

“archeology” phases which, by taking the company out of its reality (projecting itself into different eras for example, by drawing on past experiences or a projection into the future), make it possible to identify the essence of people’s aspirations regarding the role of the company in society, identify the common thread and the points of discontinuity.
foresight phases which, by looking into the future, make it possible to anticipate major trends, the development of issues relevant to the company and to imagine different development scenarios.
reflective phases on the major issues (SDGs or SD issues inspired by BNQ21000) to better understand the evolution of the ecosystem and to agree on the portrait of the organization’s situation.
phases of analysisof the value creation model of the company and the use of the triple business model (economic, social and environmental) to go into the details of the activities and the business model of the organization which will support future engagements.

The work on the raison d’être indeed requires a double alignment:
• On the one hand, between what the future promises (and which can quickly deviate from the wide “field of possibilities” and projections disconnected from reality) and taking into account the precious impetus of the founders, in what way it has dissolved or persisted, how the company has preserved it over time, or, on the contrary, changed it).
• On the other hand, between what major societal issues demand and what the company can offer through its ecosystem, given its business and its current contributions.

Written by several hands, first in Paris in spring 2020 and revisited in Montreal in fall 2020

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