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Preamble – why purpose?the multi stakeholder model. By looking afteryour people, your customers, your impact onsociety and your impact on the planet, worryingabout the impact you have on your community– when you take care of those things, theshareholder will be better rewarded as a result.Every single day of my working life I get facedwith a question which is rooted in a wrongparadigm: it is either ESG/sustainable business/purpose/responsible conduct or financialdelivery. And I couldn’t disagree more. It is notpurpose or profit. It’s purpose as a pathway tobetter profits.”“It is not purpose or profit. It’spurpose as a pathway to better profits.”Mohit Joshi, President of Infosys Ltd (whospeaks in a personal capacity) reinforcesthe point:“When you have those really difficult decisionsto make, if you have a purpose statementit gives you that frame – to know in whatdirection the result should be. There reallyisn’t a conflict. Around ten years ago we set uplarge wastewater recycling and solar plantsin all our campuses. We invested very heavilyin training. But we didn’t really see this as aconflict. Yes, some analysts and competitorssaid that building these campuses and investingin protecting the environment were wasteful,giant white elephants. But it allowed us to beaspirational as an employer and to presenta very positive picture to clients. Even beforegreen became fashionable (I hate to say it),clients were seeing what we were doing andwere very complimentary because it fitted inwith what they were trying to do. Now, it’sbecome critical, so I don’t think there’s anythingother than a very short-term conflict. In thelong run there is no conflict: nobody can arguethat doing the right thing should not drive yourbusiness. Purpose is the single most importantingredient to success.”8. The Purpose TapesKevin Ellis senior partner of PwC and JesStaley CEO of Barclays emphasise the roleof purpose in driving a strong culture. KevinEllis says:“You can invent what you like and recruit whoyou like but the only long-term advantage isthe strength of your culture. Purpose is a keyeffective building plank in that. Purpose, cultureand values fit well together. And that helps thecompany perform better, have better peopleand have better people better engaged. It is aunifying thing for everyone who works for us.”“It is a unifying thing for everyonewho works for us.”Jes Staley frames the argument in these terms:“If you embrace the notion of purpose youhave to believe that doing the right thingacross the board, or as much as you can, isclearly in the long-term interest of the firm.So, I don’t think purpose is sustainable if theleadership of a firm that wants to be driven bypurpose doesn’t see that purpose as ultimatelybeing the most viable pathway for the strengthof an institution. So, Barclays doesn’t makeanything. What we sell is judgement. The onlycapital of this bank is intellectual capital – thejudgement of the people in this bank usingtheir intellect to the benefit of our customers.We are a better institution than the one downthe street only if we have people who aresmart and show judgement. Purpose brings toyou people that have quality judgement – thesingle biggest asset of the bank. So that is howpurpose connects with the long-term successof the bank.”“Purpose brings to you people thathave quality judgement – the singlebiggest asset of the bank. So that ishow purpose connects with thelong-term success of the bank.”

Preamble – why purpose?Liv Garfield, CEO of Severn Trent,concurs on how purpose differentiates hercompany’s culture, but also highlights howit offers a compass to decision making.Severn Trent is necessarily a heavy userof energy through intensive pumping andcleaning of water, yet its purpose requiresit to be at the forefront of committing tocarbon neutrality. Last year its boardbacked the management in launching a 1.2 billion environmental investmentpackage to deliver carbon neutrality by2030, in particular enlisting wetlands and acommitment to biodiversity to achieve itstargets. Garfield takes up the story:“It was a massive commitment to the futureof the organisation – the second largestinvestment of its type ever made in the UK.It was complex. There are interweavingambitions on net zero, biodiversity, pollution,future capital contracting strategy, how youplay a future exit strategy on chemicals, usingwetlands and nature to serve you and so createa circular economy. There is no perfect answergiven the complexity: we had to scenario buildrather than give an answer. It needed braveryto take the plunge – purpose both helped setthe question and the answer. Our purposecommitted us to be an environmental leader,not just in our sector but across the piece.Equally the line that determined our financialpath was set by purpose.”In a very different industry, Susan Bright,Global Managing Partner for Diversity &Inclusion and Responsible Business of topinternational law firm Hogan Lovells saysexactly the same thing:“When you have those really difficult decisionsto make, if you have a purpose statement itgives you that frame – to know in what directionthe result should be.”“When you have those really difficultdecisions to make, if you have apurpose statement it gives you thatframe – to know in what direction theresult should be.”Sir Simon Stevens, CEO NHS England,believes the NHS’s clarity of purpose hasbeen vividly demonstrated over the Covidpandemic and now the task is to see thatresponse “bottled”.“Under the most extreme test the HealthService has ever faced, it has risen to thatremarkably. Necessity has driven changeand the questioning of accumulated waysof working in order to deliver care to a thirdof a million very severely ill hospitalisedcoronavirus patients successfully. The questionfor us is not: do we have a clear purpose?The question is how do we bottle and sustainthe extraordinary response we’ve seen to thepandemic for the next phase of the HealthService’s development?”“The question is how do we bottleand sustain the extraordinaryresponse we’ve seen to the pandemicfor the next phase of the HealthService’s development?”The necessity of deploying purpose to driveforward organisational energy is echoed inthe private sector. Anne Richards arguesthat purpose delivers essential clarity:“Unless you have clarity of purpose in anythingthat you do, you are a gate blowing in a breeze.So purpose starts with that clarity. If youcan’t articulate why you’re here and what itis that you’re trying to do very concisely, thenyou don’t know what you’re trying to do. Youdon’t get in a car and just drive off randomlybecause you’ve decided you want to go andThe Purposeful Company9.

Preamble – why purpose?visit anywhere. You go because you understandwhere it is you’re trying to go. It’s through itsclarity of purpose that a business can thenthink about how it generates a valuable profitfrom that.”She continues: “clarity of purpose leads you toidentify something which is of value to society(or a part of society) depending on what it isthat you’re trying to do – you then justifiablyreceive and retain profit. You don’t start with:we want to try and make some money – howis it we go about doing it? Rather it should andmust be: here is something of value which wecan create – a gap or a need that we can plugand from that legitimately then, you have theright to earn a profit on that activity; and that’sthe way round that it comes, I don’t want todiminish the importance of financial rewards.I think it spurs people and enterprises to greatingenuity and allows us to imagine new waysof doing things which are of immense benefit tosociety. My point is that profit is not the startingpoint. It’s an outcome.”“My point is that profit is not thestarting point. It’s an outcome.”Alison Rose, CEO of NatWest, sums up:“if you’re really serious about creating anorganisation that is going to create and havevalue over the long term, then you have tocreate a purpose driven organisation. Anorganisation for whom people are going towant to aspire to work because people wantmeaning in their lives and they have choiceswhere they want to work. An organisation withwhom customers choose to have a relationshipbecause they have multiple choices that theycan make. The footprint large organisationsleave is massive and you’ll be judged by thatfootprint; and if your impact is for good, then itwill create value. That is the case for purpose.”10. The Purpose Tapes“The footprint large organisations leaveis massive and you’ll be judged by thatfootprint; and if your impact is forgood, then it will create value. That isthe case for purpose.”But as a number of the CEOs acknowledged,while the purpose proposition is movingmainstream it is not yet fully established –facing challenges both theoretically and fromvarying business, financial and shareholderinterests who are compelled – or choose –to organise themselves wholly around thepursuit of profit. Even within purposefulcompanies, as we shall see, there is adifference of emphasis about the degreeto which there are short-term trade-offs.However, there is common agreement thatin the long run purpose and shareholdervalue are aligned. This is an ongoing debateand discussion.

Finding, doing, living purposeThere is an itch to depict business effortsat doing the right thing as a form of windowdressing. Commitments to purpose aresometimes portrayed as but a contemporaryrehash of corporate social responsibility,chairs and CEOs making pious commitmentsto community, publishing glossy brochuresand hoping that contributions to goodcauses – sometimes even blessed by royalty– will allow them to get on with the realbusiness: sweating assets, focusing on thenext quarter and engineering whateverdeal to please the City.As Liv Garfield says:“there are companies where purpose is a bit ofmarketing I see that sometimes.”But it was impossible to interview theseparticular men and women without beingimpressed by their commitment – and theirdemonstration that their belief in purposewas matched by deeds.Here is Jon Lewis, CEO of Capita.“We have undertaken a range of initiatives toshow that I was authentic and committed topurpose. We put employees on the Board.We signed up to the Fair Tax Mark, one of onlyI think eight or nine FTSEs that are currentlysigned up as of November. We signed up toJulian Richer’s Good Business Charter. Wecompletely realigned our charitable giving toalign with our purpose for the stakeholderswe serve. We put a lot of emphasis onteaching digital skills for the underprivilegedin society. We went from being the worst inthe eyes of the Federation of Small Businessin terms of prompt payment to being one ofthe best. I could go on the point I’m trying to make here is as soonas you commit to being purpose-led, you’vegot to send a message to all stakeholders thatyou’re deadly serious; and the most effectiveway of doing that is enacting deeds; and thatwe do and will continue to do. We’ve madedecisions around contracts we would not bidupon because we did not believe they werealigned with our purpose. Again, make yourcommitment to being purpose-led abundantlyapparent to all of your stakeholders”.“ as soon as you commit to beingpurpose-led, you’ve got to send amessage to all stakeholders that you’redeadly serious; and the most effectiveway of doing that is enacting deeds;and that we do and will continue to do.”Sir Simon Stevens identifies the NHS’spurpose as “high quality health for all, nowand for future generations”. It underpins“a shared sense of mission and commonendeavour”, but in parallel with purpose-ledprivate sector organisations it is also aNorth Star for strategic decision making,recently most conspicuously in the roll outof Britain’s vaccine programme, who wasprioritised and why:“Take a practical topical example of the Covidvaccination programme. As well as expandingvaccination rapidly, we’ve also been seeking todo it in a way that is equitable. That has meantstarting with the highest risk groups and beingquite precise about the phasing of the vaccineroll out and being deliberate in looking at thedifferential uptake by different communities– whether those were in deprived parts of thecountry or amongst some vaccination minoritycommunities. That commitment to equity as wellas to excellence is being played out through the25 million people who’ve been vaccinated in thelast 100 days or so. So yes, purpose is a NorthStar that guides what we’re seeking to do.”The Purposeful Company11.

Finding, doing, living purposeFederated Hermes is an investmentmanagement company, managing 80billion of assets and advising on as muchagain, whose purpose is “we help peopleretire better”. It may be a very differentorganisation to the NHS, but CEO SakerNusseibeh is no less committed to purpose.Like Capita’s Jon Lewis, he sees beingpurpose-led as both about what you do– and what you don’t do. Thus “to retirebetter” is not only to have a good incomein retirement, it is to live in a good society.The NHS incorporates its purpose in aconstitution. Federated Hermes captures itspurpose in a public pledge:Saker Nusseibeh:“Our pledge is not about making money. Ourpledge is about helping people retire better. Ourpledge is about being open with the regulator.Our pledge is about being inclusive. Our pledgeis about advocating for the environment. Ourpledge is about treating everybody in a betterway. What that has meant in this period ofgrowth is we’ve created an environment wherepeople like to work.For our investors what that means is when youretire you do not want to live in a society whereglobal temperatures are 2 degrees or 3 degreeshigher than today or there are massive socialruptures, because that is not retirement – thatis living in a fortress. So, we should take thatinto account when we invest your money.”Hence the priorities the firm attachesto investing in companies committedto sustainability and the totality ofenvironmental, societal and governancegoals (ESG). But alongside the positiveactions, the pledge is also a guide to whatHermes will not do; “we will not hire peoplewho may be technically excellent but who don’tbelieve in the values that we believe in. In 200912. The Purpose TapesI inherited a commodities business which wasincredibly profitable for us. But we weren’tengaging and advocating with the companies –we were simply buying futures in commoditiesand making money for the sake of makingmoney. So we said we don’t want to do this.We can go and play in Vegas – it’s more fun!So there are things we don’t do. And there arepeople we don’t hire. There are businesses wedon’t enter.”“So there are things we don’t do. Andthere are people we don’t hire. Thereare businesses we don’t enter.”Some of the companies – like Unilever orPwC – have had an organising purpose formore than a century and know its value.Others have determined on adoptingpurpose only recently. John Pettigrew,the incoming CEO of the NationalGrid, decided to take the leap with sometrepidation. How would an organisation ofhard-headed engineers react to discussionsabout purpose and values? Very well, itturned out:“To be honest, I started this exercise witha sense of trepidation – standing up in atown hall with a couple of hundred scepticalengineers asking what is it that drives you; tellme what your purpose is – your connection tothe organisation. They’ve seen every managercome and go; they’re going to challenge mythinking. But I was delighted. We just struck anerve about the pride that they have in whatthey do. And then articulating it in a way theycan be proud of.It was a process. The short cut is that the wordswe came up with were: ‘to bring energy to life’.Beyond that, we also looked at what valuesare important to the organisation. We had theclassic ones of integrity, trust, honesty – thegood things that most corporates have. But

Finding, doing, living purposethey didn’t really resonate with me personally –not because they’re bad words, but because Iwanted something that was more specific towhat I and the organisation stood for. So againanother process which evolved to a few, verysimple values: do the right thing, find a betterway and make it happen.So that led to our Responsible Business Charter– an articulation of what we believe a purposeled responsible business stands for and thuswhat we stand for. The intent was to set out ourambition, our commitments and then to reporton them so we could be held to account. Whatgets measured is what gets done. And we’lltake it from there if you like. It’s what we thinkpurpose means to us.”“What gets measured is what getsdone. And we’ll take it from there ifyou like. It’s what we think purposemeans to us.”John Pettigrew brings to life a dimension ofbusiness, again emphasised in different waysby all the interviewees, that should not needto be said: the precondition for effectiveprofitable business is people, their feelings,motivations and relationships. It could be noother way.The purpose of IFM – an Australian basedasset management group – is “to protect andgrow the retirement savings of working people”.It is a purpose that reflects IFM’s ownershipby 26 Australian pension funds who operateon an “all-profits-to-members” or mutualbasis. IFM also invests on behalf of anothernearly 500 pension funds from aroundthe world. Citing people in the company’spurpose statement, says CEO David Neal,grounds the culture – it makes it moreegalitarian, more long term, more team andsocially oriented and even impacts on howpeople are paid.“We have grown to be one of the largestinfrastructure managers in the world and thatscale allows us to have influence as owners orpart owners of the utilities, roads, airports,seaports and other assets in which we invest. Soif you want to protect and grow the retirementsavings of working people then the focus ofyour investment approach has to be on the longterm. Our shareholder pension funds reinforcethe message that IFM does not exist to simplygather as many assets as possible by launchingnew funds. We’re all working people, so it’s aleveller: you’re not working here enriching anelite or a rich shareholder. You’re focused on amass benefit to society.We have talented staff, who perhaps couldmake more money elsewhere in the investmentworld, but they are here because they believein what IFM does. I don’t want to make ussound like saints wandering around. These areseriously hardnosed investment professionals,making at times quite aggressive investmentdecisions but they need to be fair and just, inline with our long-term purpose. Our ownersand investors insist on this investment culture:staff are motivated and driven by our culture towork over a different long-time horizon, and soweigh things differently in their decisions.”“These are seriously hardnosedinvestment professionals, makingat times quite aggressiveinvestment decisions but theyneed to be fair and just, in linewith our long-term purpose.”Alan Jope comments that William Leverwho founded Lever Brothers back in the1880s (one of the companies that mergedto form Unilever) then defined the firm’smission, “to make cleanliness commonplaceand lessen the load for women”.The Purposeful Company13.

Finding, doing, living purposeSo at that time he was an advocate of publichealth. Now, with “the forceful advocacy”of his predecessor Paul Polman, thenineteenth century concern to promotepublic health has transmuted into thecommitment “to making sustainable livingc

The Purpose Tapes Purpose driven leaders in their own words The Purpose Tapes are interviews (conducted between November 2020 and March 2021) with fourteen organisational leaders who have a stated commitment to purpose. Here are their purpose statements: Barclays, CEO, Jes Staley “We dep