The Importance of Business Purpose in 2022

The challenges of the past two years have certainly highlighted the importance of purpose from a social standpoint as businesses have become more vocal and cause-driven than before. We have seen businesses take a stand on the issues their customers care about and that impact us all societally. Those who get it wrong or do so inauthentically have often fallen under the scrutiny of the court of public opinion, but those who get it right can reap major reputational and business reward. Research has found that 52% of purpose-driven companies experienced over 10% higher growth versus of non-purpose-driven companies (42%), benefitted from greater global expansion (66% versus 48%), launched more products (56% versus 33%) and had higher success in major transformation efforts (52% versus 16%).

With all that in mind, what role does business purpose play in 2022? As we begin the new fiscal year, how should leaders be thinking about and enacting purpose within their organisations in order to overcome these challenges, build stronger teams, and earn trust in the marketplace? Most importantly, how do you get it right?

Purpose Today

As a recap, your purpose is your ‘Why’ when following Simon Sinek’s Golden Circle Model. It is that highest level of fulfilment on Maslow’s Hierarchy of Needs after the basic requirements of sustenance, security, and socialisation are addressed. It is the principle at the heart of all of your business activities and the core reason for the organisation’s existence. On a more individualised level, purpose is the reason why you get out of bed every day. It is why you are in the role that you are in, doing the work that you have chosen to do. Purpose does and should underly every business activity, which is why it is essential that you have one.

Of course, every organisation exists with some money driven objective. It is the aim of organisations in the private sector to turn a profit, and even not-for-profit organisations typically have some sort of fundraising objective tied to whatever cause they support. While these financial goals are fundamental to the operations of the business, they cannot be the sole reason the organisation exists in 2022. Today’s customers will no longer accept it, and staff will no longer support it.

That’s because the past two year have accelerated a change that was slowly boiling under the surface. Being dealt so many societal and personal challenges all at once left us all a bit more empathetic of one another and more pensive about the bigger picture. We have experienced major shifts in the ways we live our lives and do business. Today’s customers want to do business with organisations they feel stand for something or share their values. In the wake of the ongoing ‘Great Resignation,’ staff want to feel like more than just a cog in a machine and want to know that they matter more than the bottom line. Identifying and living out a purpose is how the business and its leadership are able to make that happen. One of our previous blogs goes into more detail on how to identify purpose, how to enact it, and why it matters, all of which are still relevant today.

Our Advice

But as the new fiscal year begins, there are extra considerations that need to be made given our current social, economic, and geopolitical climate. Here are a few things we recommend leaders think about moving forward:

• Be clear about your purpose: If your business does not already have a clearly defined purpose, it’s time to get one. If you do have a purpose statement but it’s tied to profits in any way, it’s time to rethink it. Your purpose needs to be achievable, honest, and in line with what you do as an organisation. You aren’t trying to pull a rabbit out of your hat or make a purpose appear out of thin air. Odds are, you already have one hiding in plain sight. Why do you offer the services you offer or sell the products that you do? How does it benefit your customers or the world around you? The answers to those questions will likely highlight your core purpose, but once that is solidified it is okay to add on. You may choose to align your purpose with some of the macro issues in society. For example, you may decide that your business needs to play a role in helping combat climate change and work that into your purpose via changes in your supply chain or daily practices. You may be disturbed by any talent inequalities in your industry and decide to strive towards fairness, working equality into your purpose via your hiring practices or the makeup of your board. So long as you understand that your business stands for something bigger and you operate from that place, you are on the right track.
• Authenticity matters: That said, whatever you choose to champion needs to be something you are willing to and capable of enacting. Today’s customers are savvy, and they are willing to do their research. If you are publicly championing diversity and equality yet your HR figures don’t reflect that, your customers will see right through you and the reputational blowback will be damaging. Once you define what your purpose is, you then need to live it out. Do not say your organisation is dedicated to making the world a greener place if you aren’t doing anything to improve its environmental impact. You cannot call yourself a people-centric organisation if your staff are unhappy and feel mistreated. It all goes back to the idea of ‘walking the talk’ from our previous blog, which now feels more relevant than ever. Say what you mean and mean what you say. In the digital age, businesses and their leadership are under constant scrutiny. Information spreads like wildfire and all it takes is one viral post to tank your customers’ trust and support. You need to ensure that whatever it is you claim to stand for is what you are living out day to day.
• Purpose and your people: But it isn’t just your customers who are invested in your organisation’s purpose. Your team are critically important for bringing it to life, all while having their own personal investment in the mission. The challenges of the past two years have made many professionals reprioritise what matters to them in their career, and the ways that businesses treated their people during this time had major impacts on their organisational success during this challenging period. Those who were more focused on their own profits while their staff contended will the damaging effects of the pandemic and struggled under the weight of higher costs of living are the businesses who were most likely to be hit hard by the Great Resignation. After living through so much loss and hardship, your people want to be treated like people instead of numbers. Your staff are not a means to an end; they are the heart and nervous system of your business and should be treated as such. Your people want to feel as though they are contributing to something bigger and that their work has meaning beyond just making money for those at the top. Purpose can provide that, especially once it becomes an integral part of the business and its operations. By providing that deeper sense of fulfilment and keeping your people front of mind, you may be able to more easily retain staff who are on the outs or attract new talent as the business grows and evolves. But you need to understand that the modern career is now about more than simply going to work, doing your due diligence for eight hours five days a week, and collecting a paycheque. Our careers are a major part of our lives and should provide some sense of fulfilment on both the micro and macro level.
• Tune in: As a leader, you need to think about purpose from both an organisational and a personal standpoint. You are responsible for helping the organisation define what it stands for, but also for diffusing that message throughout every level of the business. Part of that role is tuning in to what’s happening around you both inside and outside of the organisation. Is your messaging in line with what is happening in the world today? Are you addressing the types of issues that your people care about? What do your team’s individual purposes look like? What ties them to the organisation or motivates them to show up every day? Keeping your finger on the pulse and adapting accordingly can help you more easily transition your business through periods of challenge or change. Taking a stand is only half the battle. How you choose to behave every day after the fact is what will have the most impact.
• Take a human approach: To quote one of our consultants Lesley Lindberg, “Being human needs to come back into fashion.” Purpose is what humanises business and needs to be dealt with in a human way. If you are thinking about purpose as a means to an end or telling yourself that “I have to care about this thing so that the business can turn a profit,” then you are doomed before you even begin. The next chapter of business asks us to step outside of purely commercial thinking and embrace what it is that unites us as human beings. Every single one of us has needs, wants, desires, motivations, and challenges. Once we examine those more closely, it’s likely that we will find more similarities amongst ourselves than differences. The past two years have dealt all of us challenges to overcome, and while differences in opinion caused some societal divisions, we saw a rise in empathy and understanding. The pandemic levelled the playing field, and now that it is near its end we need to remember its lessons and continue to live them out. At the end of the day, we’re all just people. That understanding and mindset will be valuable as we continue to navigate the ongoing geopolitical, social, economic, technological and business challenges that continue to oppose us.

As we enter the 2022-23 financial year, purpose continues to be increasingly important to our business lives. However, given the ongoing and new challenges we face, purpose needs to be more than just pretty words shared on your company website or regurgitated in your comms. Know what you stand for and then actually work to live it out. If you do so authentically, you will have a much easier time navigating change, building trust and credibility, and keeping your people on your side.

It is hard to believe that we are only entering the third month of 2022 given how much has transpired in the executive job market since the start of the new year. We went from battling a dangerous new variant that set us back in our hard-earned progress to a total elimination of all remaining COVID-19 restrictions in the UK. Just as we were seeing a light at the end of the economic darkness caused by the pandemic, an unnecessary war in eastern Europe broke out, causing economic tremors that are likely to be felt worldwide.

As we exit winter, here are factors you need to consider about the executive job market as it stands as of Q1 March 2022.

Executive Job Market Snapshot

Our previous executive job market update was conducted right at the height of the Great Resignation, an employment movement which has seemingly continued into the new year. After a two month fall in the total number of vacancies during a period when businesses froze their hiring plans due to uncertainty from omicron, the total number of vacancies in the UK rose to a new record high of 1.3 million in January 2022. According to recent research from Benefex, 17% of UK workers are actively looking for a new job, 53% are open to new opportunities, and just 30% are committed to staying put for at least the next 12 months.

Even so, there appears to be recovery in the marketplace. According to the most recent Office of National Statistics (ONS) ‘Employment in the UK’ report, the UK employment rate was estimated at 75.5%, a slight increase from the previous three-month period but still lower than before the pandemic.  The unemployment rate also continues to fall, currently at around 4.1%. Many of the employment and economic figures we have been seeing month on month indicate that the market is rebounding, but we are still not where we were before the pandemic. One might assume that should we continue on the path we are on, it wouldn’t be unreasonable to expect a return to ‘normal’ levels by the end of 2022. While that may still be a possibility, certain trends in the market indicate that that recovery may not come as quickly as we had hoped it might.

Key Market Trends

Changing Roles for Compensation

People may feel that they are earning more on paper, but when considered alongside inflation and cost of living, wages are not growing at the rate they should be. Data from the ONS found the annual growth rate for average total pay, including bonuses, increased to 4.3%. The strongest growth was experienced by those in the finance, insurance, and property industries. In January of 2022, median monthly wages for payrolled workers increased by 6.3% compared to January 2021, and they were 10.3% higher than before the pandemic in February 2020. However, once inflation and cost of living are factored in, real pay fell on the year by 0.1% and wages excluding bonuses fell by 0.8%. We are likely to see this worsen as severity of the energy crisis deepens, the rise in National Insurance contributions takes effect, and the cost of living in the UK continues to increase. Prior to the events in Ukraine, inflation was expected to rise above 7% this year, but there is no telling what this figure could be come in the wake of this conflict.

If you are looking to alleviate some of the pressure from this financial squeeze, moving on to an external role may be your best option. Early in Q1, the Resolution Foundation think tank and the London School of Economics’ Centre for Economic Performance published a report that found that workers looking to achieve a pay rise this decade will need to change company in order to do so. If a pay rise is a priority of yours or a need to secure an improved financial trajectory, you will need to keep an open mind to making a change. That’s not to say that your existing organisation will be totally unwilling to promote you or compensate you further. You just might find that the grass is greener further afield.

Fierce Competition for Executive Roles

However, finding that new role might be a bit of a challenge. The Great Resignation has created a record number of vacancies in the market, but primarily in more junior roles. Executive roles are still rather hard to come by, with an increasing global pool of qualified candidates vying for the same spot. Executives are likely to find that the majority of jobs in the market do not match their skills or qualification and that when suitable roles that do become available, they go fast.

Executives should leverage and further extend into their networks to get a leg up on these openings, as many executive job market vacancies are never posted publicly.

Recent HBR research indicates that the leading indicator of career success is investing in and growing future relevant and aligned networks.

If your career transition goals involve entering a new territory, changing role, or switching industries, building your personal digital brand is crucial because more talent is sourced and found digitally.

So much of the modern executive job search is digital and having a notable online presence can be a great way to differentiate in a marketplace full of qualified executives with similar skillsets and experience. Not only that, establishing strong thought leadership can also help you get in front of the right people and expand your network to meet your objectives. This blog outlines how to accomplish this effectively. Navigating an executive job search is likely to continue to be a major challenge for executives, so setting yourself up to attract opportunities will be incredibly valuable during your transition period.

Shifting Priorities

But just because roles are scare, that does not mean you should settle for any opportunity that comes your way. If the Great Resignation and this pandemic period as a whole have taught us anything, it’s that the workforce is ready to command more from their working lives. 70% of respondents in the previously mentioned Benefex survey reported that their expectations have changed since the coronavirus, and three quarters said their experience at work is more important than it was a year ago. Nearly half admitted to raising their expectations when it comes to wellbeing, provision of high-quality digital tools, and the ‘where’ aspects of their workday. Benefits packages and adequate recognition for their work was also important for around 40% of UK workers.

With only 25% of workers rating their employee experience as excellent and only 36% of respondents reporting that they felt well looked after by their companies during the pandemic, it is likely that many will feel motivated to move on in pursuit of ‘more’ from their employers. Senior executives might especially experience this shift, feeling that they have reached a point in their career where they have earned the right to have more flexibility in their working lives.

Now that the remaining UK COVID-19 restrictions have ended, the time has come to put proposed new ways of working into practice permanently. Most organisations seem to be changing with the times and listening to their staff’s expressed desires by adopting hybrid or flexible ways of working, but a select few businesses are sticking to their guns and requiring staff to return to the office full time. In our previous market update, we advised anyone considering an executive job search to determine their stance on flexibility ahead of time. That advice is worth reiterating here, with some additional considerations. Businesses have had enough time to decide on a model and test it out, so by now many should know what the road ahead looks like for their teams and are unlikely to change their minds. Therefore, if flexibility is important to you in your next role, ensure you are looking at companies who are already demonstrating a willingness to offer that. The time for trial and error and toying with new models has come and gone, and businesses should know where they stand by now.

If their values don’t align with what you’re looking for, you might be better off holding out for an opportunity that meets your needs. As an executive, you have put in the hard work and the hours to reach the level you are at. But at the same time continue to develop and promote your value and your indispensability to your future employer to continue to succeed in your career.

The goal of an executive job search should always be to enrich your career in some way, whether it comes through higher compensation, increased stimulation, or better work life balance etc .

The marketplace has definitely shifted during the pandemic period to enable the UK workforce to become more comfortable with demanding more, and this is unlikely to revert any time soon. Know what your ‘must haves’ are and get a clear idea of what types of things would allow you to feel like you are progressing rather than remaining stagnant, and don’t settle.

Sought-After Skills

Given these trends, there are several skills that anyone undergoing an executive job search should focus on in order to successfully navigate the evolving world of work, differentiate themselves, and make maximum impact in their new role. Here are the capabilities our experts recommend you champion in the executive job market at this point in time:

• Adaptability: The ability to pivot remains a top skill for executives in the future of work. Things are changing swiftly and often. Demonstrating that you can change alongside of them, or even get ahead of them, will be immensely valuable to any organisation. Disruption has become a regular facet of working life, and the most competent and successful executives are those who do not get bogged down by change. An open mind, a willingness to listen, and a focus on continuous learning will be a major asset.
• Technological Savvy: As always, technological capabilities are of immense importance in an increasingly digital world. That’s not to say that everyone needs to learn to code or become an AI expert. For the executive, the focus should be on understanding the key technologies that are causing disruption and the role that they might play on one’s specific industry, organisation, and job function. We recently published a blog on what this might look like in various different senior roles.
• Soft Skills: This point has been made many times, but is worth reiterating once again in the context of the previous point. Part of developing a future-focused relationship with technology, especially AI, is understanding that the role of the human worker will inevitably change. The fact of the matter is that certain technologies can get the job done better and faster than we can, and therefore the attention will need shift towards filling the gaps these tools cannot reach. Many of these are what have been traditionally considered to be ‘soft skills’ such as creativity, communication, leadership, strategy, and so on. Your hard skills and experience are likely to get you into the running for the types of jobs you may be after, but being able to provide those extra capabilities will help better your chances at becoming the successful candidate.

The end of pandemic restrictions signals the official start of a new chapter in our professional lives, but many of the challenges we have seen in the executive job market these past two years are far from over and new ones are beginning to take shape. It is impossible to predict what shape the rest of the year may take, but there is no need to put career plans on hold. Executives in transition should continue to take the time to assess their capabilities, strengths, and skills to best position themselves in the marketplace and prepare for future success.

Organisations are beginning to put their plans and objectives into action.

From our conversations with our clients, it seems that Covid 19, inflation, talent scarcity, government funding support and policy uncertainties are creating increased challenges to boards.

As a result customer centricity is high up on the strategic agenda for many businesses in 2022.

And it makes sense.

After two challenging years of working to stay afloat, the time has come to build back better and enter the next era of business. Customers are central to the success of these efforts, but their habits and demands have changed along with the market these past few years. They are savvier, choosier, and more digitally-driven than ever before. In order to become truly customer centric, leaders need to tap into what it is that drives customers and influences them to return time and time again.

We asked our experts to share the top challenges they find our clients experiencing when aiming to become more customer centric, and to share their advice for overcoming these hurdles. Here’s what they had to say:

Top Challenges to Customer Centricity

• Learning to Unlearn: Many top executives got to where they are today through a long and successful career journey. The downside of that is that many reached their post years ago and settled in, sticking to what works. The practices may have historically helped to drive the business forward in challenging periods, but today’s market and customer is like nothing we have ever experienced before. We have never been this digital, this globalised, this actively communicative across various platforms and mediums, or this spoilt for choice with who we do business with. As a result, leaders may find that the practices they previously relied on to evolve their offering may no longer suffice and that they have to unlearn everything they thought they knew about the market, their role in it, and the customers they aim to serve. This can feel uncomfortable and unsettling for some, especially those who have adopted a sort of ‘If it isn’t broken, don’t fix it’ mentality throughout their tenure. There is no room for stubbornness or ego here. To change the organisation and its practices, its leadership team will need to go within and address the attitudes and actions that are holding them back.

• Listening In: The best way to learn what your customer wants is to listen to them, but the acts of ‘listening’ and gathering business intelligence have evolved alongside the rest of the market. There are so many different ways to do this and to do it constantly. Your customers are communicating with your sales and service teams, browsing your website, talking about you on social media, reviewing you online, having conversations with their peers, and so on. That generates a lot of potential insight, but also a lot of noise. The challenge then becomes sorting through that intelligence, finding trends, and prioritising. It can be hard to delineate between what you are hearing and what is actually important to your customers. There may be a temptation to want to fix everything all at once, but that is not always possible or practical. The challenge for leaders is to take a moment to assess what they are hearing,
• Making Sense of Customer Data: All these customer conversations and activities create vast amounts of valuable data for the organisation that helps to paint the picture of what the journey looks like and where it could be improved. Businesses have access to an immense amount of data, but often fail to use it properly. The challenge leaders face is ensuring they have access to the right information and are using it to their advantage. Advanced technologies such as Artificial Intelligence will be a big help here, but leaders need to get on board with these tools and develop an understanding of them. The pandemic helped push many laggards towards new tech, but most businesses are still in the exploratory phases of their digital transformation journey. Executives need to push past any remaining hesitations towards technology and get to grips with it and soon, otherwise a lot of potential and valuable insights will continue to be missed out on.
• Generating Buy-In: The previous challenges were concentrated primarily on the leadership team, but true customer centricity flows evenly throughout every area of the business. Yes, leaders may have to unlearn, tune in, and make sense of the market demands, but their staff are the ones putting these lessons into practice. If your own people don’t buy into your vision and what you are trying to accomplish, how do you expect your customers to buy in? Not only do leaders need to be able to access all this data and make sense of it, but they also need to be able to present it to their people in a way that tells a story and brings the customer journey to life in a narrative way. Every member of the team from the board to the interns need to be aligned with the vision. The story told to an organisation’s people is the story that will ultimately be told to its customers. There can be no crossed wires. The sales team shouldn’t be saying one thing while IT says another, marketing says something different, and customer service is on a different page entirely. Every department, whether it is directly customer-facing or not, should know what the customer story is and the role they each play in delivering it. Creating that level of alignment at scale can be a major challenge for leaders, especially if the business has historically been insular across departments.

Top Tips for Overcoming Challenges to Customer Centricity

Thankfully, all of these problems are possible to overcome.

At The Rialto Consultancy, we have worked with leadership teams over the last decade in order to help them unlearn what they know and get their people on board. Here are our experts’ top tips for achieving greater customer centricity moving forward:

• Embrace Radical Empathy: It’s time for being human to come back into fashion. The pandemic bonded us all through mutual struggle, and as a result we all became a bit more understanding of one another. The pandemic and its challenges may not be over, but even when it eventually does come to an end, we need to remember that we are all just people. We have feelings. We have challenges. Take the time to be a bit more forgiving and understanding, not just of your customer but of your people. Practice patience and work to see things from their perspectives. That way, you can avoid friction and work more collaboratively to tackle problems.
• Expect Imperfection: Part of being human is making mistakes, learning from them, and continuing to try. The most successful customer centric leaders are those who understand that things won’t always be perfect, and who are accepting of this. What’s important is becoming more fluid and adapting to what comes. With so many different touchpoints and conversations happening all at once, things will inevitably get overlooked or you might feel tempted to try to fix absolutely every complaint brought to your attention. That is not feasible, and leaders need to come to terms with the fact that they might not always have the answers. Instead, be more curious and more tactful about how you address problems and prioritise.
• Understand the Journey: Do you know what it is like to be your own customer? What does the journey look like? What steps and processes do your customers go through when doing business with you? What is it like to complete a purchase on your website, or file a complaint with your customer service team? Every member of your team, not just leadership, needs to know what the journey looks like firsthand. Recently in the US, news broke that food delivery service DoorDash would be requiring every single one of their employees across all departments, including their CEO, to deliver one order each month. The reactions to this were mixed, with some staff outraged that they would be made to do the ‘lowliest’ job of the organisation, while others praised the initiative’s empathetic benefits. Your organisation may not go to these lengths to create an understanding of the journey, but at the very least your entire team should know what your process looks like from the perspective of your customers. That way, you can identify problems from the inside in order to fix them, and ensure that the people interacting the closest to your customers understand exactly what they are experiencing.
• Engage More: In order to listen to and understand your customer, you need to interact with them. Often, executive leadership has very little direct contact with the customer and instead are fed by intel from those ‘on the ground’. Their understanding of their customer comes from reports and second-hand news. By increasing their own direct interaction with the customer, leaders can build that all-important empathy and understanding.
• Trust and Empower Your People: Even if you are more actively engaged with your customers, the majority of the interaction will still fall on your team. Leaders need to trust their staff and find a way to empower those closest to the customer to best advocate for them. This is much easier to achieve if there is alignment across the organisation and a consistent story being told.
• Advocate on behalf of Your Customer: Advocating for the customer shouldn’t only take place during direct interactions. The customer’s perspective needs to be represented in every conversation, always. Someone should be playing ‘devil’s advocate’ on behalf of your customer in every meeting, strategic conversation, presentation, and so on. Instead of focusing on what’s in it for the business, someone always needs to be asking what’s in it for the customer. The more people you have asking this question, the better. Not only that, but everyone should be able to answer it by the time the conversation is done. Weaving this practice and mindset into absolutely everything helps ensure that the customer is always put first. When the customer is properly catered to, everything else will fall into place.

Becoming customer centric cannot happen overnight. It will take time, patience, experimentation and innovation to get it right. However, the organisations that dedicate the effort to get it right will have an easier time navigating what comes next with greater agility the support of their customers.

Telefónica has launched Aura, an AI-powered digital assistant that it reckons will transform the way customers interact with the organisation

Customer service looks like being the next function to be impacted by artificial intelligence (AI). One of the boldest moves to date has been the appointment of five robots which the Dubai Water and Electric Authority’s believes can deliver “seven-star” customer service at its customer happiness centres.

Meanwhile, at this week’s Mobile World Congress event in Barcelona, Spanish telecoms giant, Telefónica, is launching Aura, an AI-powered digital assistant that it reckons will transform the way customers interact with the organisation and manage “their digital life” with the company.

Telefónica chairman José María Álvarez-Pallete López said the company is delivering on its promise of a year ago that artificial intelligence would form the basis of its relationship with clients. “Digitalisation is the core of our business and thanks to the deep internal transformation that we have undergone in the last eight years we have become a company of smart platforms.”

While it is too early to say if Aura will deliver on all of the company’s aims, its story is perhaps one of the best demonstrations of an effective digital transformation yet. Since 2012, the company has invested some 56 billion euros in the deployment of state-of-the-art infrastructure, integrated its IT systems and developed new digital products and services. Telefónica describes these platforms as building blocks that have enabled it to develop a fourth platform where the data is securely stored and infused with AI that will make the company more efficient and offer new services. This platform enables Aura to transform the way Telefónica will interact with customers.

This fourth platform empowers customers by giving them a personal data space which will soon allow Aura not only to offer a personalised experience for each user but also to show customers the data they generate and give them control over how it is used.

The other point to highlight about Aura is in terms of the wider digital landscape. Telefónica has enabled Aura to talk not just through its own channels (via a mobile application) but third-party ones such as Facebook Messenger and in future through Google Assistant and Microsoft Cortana. In short, and significantly, Aura can hang out in the same places as its customers. In Telefónica’s words, “Aura aspires to be where customers want to be”.

Digital transformation certainly doesn’t happen overnight and in this case it has taken eight years. Telefónica acknowledges that while this is a landmark moment on its digital journey it is not the endpoint and, indeed, Aura itself literally has lots to learn (it will grow day-by-day with new capabilities). But in terms of demonstrating the thought and effort that needs to go into a digital transformation programme, it is a remarkable story in itself and one that many leaders can learn from.