If you can’t measure it, you can’t manage it.1
With purpose becoming the new currency of this era, it needs to be actively measured and managed, like all core business activities. In articulating its purpose, a company needs to be able to answer two core questions: Is the purpose believable? How should the purpose be managed to deliver business results? It is important to understand that currently 70% of the general public will not give even the most reputable companies the benefit of the doubt.2 A company that states a purpose that is not believed to be legitimate will be left behind. It will not capture the long-term value that BlackRock CEO Laurence Fink spoke to in his letter to CEOs, which included a call to action on purpose:
The time has come for a new model of shareholder engagement—one that strengthens and deepens communication between shareholders and the companies that they own. I have written before that companies have been too focused on quarterly results; similarly, shareholder engagement has been too focused on annual meetings and proxy votes. If engagement is to be meaningful and productive—if we collectively are going to focus on benefitting shareholders instead of wasting time and money in proxy fights—then engagement needs to be a year-round conversation about improving long-term value.3
This forward-thinking message is powerful, but we need metrics to understand how purpose ...