If the COVID-19 crisis has demonstrated anything positive, it’s that organisations have the ability to shift their priorities within a very short timeframe. Numerous uplifting stories have emerged of communities and businesses coming together to preserve or adapt essential services, support charitable missions and tackle societal problems. This proves that even when financial metrics are significantly impacted, companies with meaningful, societal purpose can continue to create customer value.
As organisations begin to resume operations under a new normal, it is a compelling opportunity to re-evaluate business impact on the environment and society. In fact, more than 200 top UK firms and investors recently called for a green recovery plan, where efforts to support the economic recovery are aligned to the UK government’s commitment to tackle climate change.1 Developing a robust strategy for sustainability and resilience goes hand-in-hand with instilling a purpose-led culture.
”Developing a robust strategy for sustainability and resilience goes hand-in-hand with instilling a purpose-led culture.
Moreover, organisations with a mission to create societal value are likely to see a range of benefits beyond immediate returns: attracting top talent, building customer loyalty and staying ahead of competitors as the world trends towards a more sustainable future.
The economic pressures wrought by the coronavirus pandemic are undeniable, with many difficult trade-offs to consider alongside a long-term sustainability response. To create positive change while holding this equation in balance, we are seeing organisations develop best-practice responses in three key areas: strategy and purpose, people and portfolio, and culture and communications.
Strategy and purpose
The recent crisis has highlighted the importance of being a purpose-led organisation. A pre-COVID study by creative, advertising and communications agency Havas showed that 77% of customers prefer to buy from companies that share their values.2 Since the pandemic, values have shifted further and we have even higher expectations of companies to explain the role they play in society. It is now more critical than ever to make meaningful strategic decisions to build a unique and relevant future.
Actions for your organisation
- Harness the momentum in society for realising major change by making bold choices to support long-term value generation over short-term gain.
- Assert sustainability and resilience as core elements of your strategy; champion the vision and communicate progress along with traditional financial metrics. In the words of Larry Fink, CEO of Blackrock: “Climate change has become a defining factor in companies’ long-term prospects.”
- Leaders should adopt a ‘servant mindset’ in supporting their teams. Those that are being transparent with their strategy are the ones building loyalty and rallying a unified response.
People and portfolios
A rising tide lifts all boats, while a receding market can be unforgiving and exposing. This is especially true of organisations that have long deferred difficult cultural and structural change. The recent economic downturn triggered by the coronavirus means that careful consideration will need to be given to change investments in sustainability and how these align to an organisation’s strategy and purpose.
Actions for your organisation
- Ask challenging questions of your business performance under the current crisis to determine what to continue, what to do better and, more importantly, what to stop.
- New funding is scarce, so look at the opportunity cost of the impact of doing nothing while your competitors take action.
- Rather than trading off investments in sustainability with other initiatives, ask yourself: what contribution are all our change programmes making to our sustainable goals?
With fewer strategic priorities in the portfolio and a stronger focus on sustainability, top-performing change leaders need to be aligned to programmes with the highest environmental and societal impact. Driving these initiatives forward at pace, influencing and empowering others, will accelerate and reinforce the organisation’s new strategy and purpose.
Similarly, traditional approaches for attracting and retaining talent have been put to the test as people pause to reflect on personal goals, values and their careers. Companies with a social purpose already attract top talent, but in this life-changing period, more and more employees are profoundly questioning what really matters when it comes to work – what are we dedicating our time to?3
Culture and communications
Employers often underestimate how much their employees depend on them as a compass of moral trust. An Edelman survey shows that a greater percentage of people (63%) would believe their employer over government (58%) or media (51%).4
Actions for your organisation
- With disparate virtual working, now is the time to engage and reignite the corporate mission and bring your employees together to be part of this dialogue. Investing and embedding new tools will encourage the entire workforce to collaborate on developing new ways of working, ideation and strategic problem-solving – including sustainability.
- Leadership teams should look to entire organisations, not just the boardroom, to contribute to their sustainability promises, particularly given the high priority that Millennials and Generation Z place on sustainability issues.
Seize the opportunity
Companies that commit to sustainability goals during this phase of their COVID-19 response will reinforce purpose and mission and are likely to emerge from this period stronger, with more solid customer and supplier relationships, enhanced corporate reputations, and improved employee loyalty and productivity.
Leaders must seize this opportunity to move beyond symbolic or ad hoc efforts towards business recovery plans that are radically transformative – from re-evaluating core purpose and strategies, through to investment in sustainable business models, talent alignment and ways of working. If not now, then when?
The time is now for businesses to take action to show they are a key part of the solution and not just the problem. Gate One can help businesses to overcome the challenges and explore the opportunities being a sustainable business unlocks.