DISCUSSION 1 in 4 British managers would take a pay cut for purpose-led job

by Michael Wise _______26th April 2018
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Our new report says purposeful leadership is critical to staff engagement & commercial resilience in age of uncertainty and short-termism

The purpose-pay cheque debate has been reignited this week, with new research revealing that more than a quarter of managers (27%) in British companies would likely accept a salary cut to work for a company that has a clear purpose beyond profit.

A signal to employers looking to attract and retain talent in a changeable and competitive commercial landscape, the YouGov survey1, commissioned by leading food and drink company Danone UK, highlights the importance of having a defined company purpose that marries commercial success with social progress. A third (32%) would actually consider leaving their job if a greater purpose was unclear, while more than half (53%) would if their company’s values and purpose didn’t align with their own.

The findings support a new report by not-for-profit think tank Tomorrow’s Company and Danone UK, that explores the importance of having a purpose beyond profit in helping companies to prosper in the face of workplace challenges created by an uncertain world.  The Courage of their Convictions2 is built from interviews with senior leaders from within some of the UK’s biggest purpose-driven brands, including Danone, John Lewis, Mars, Philips, Tata Consultancy Services and Unilever.

Echoing the report conclusions, the YouGov survey suggests that managers who focus on salary over purpose could be overlooking other important non-monetary factors of job satisfaction that derive from being part of a purposeful-led business culture. The statistics show purpose-led company staff are more positive, more engaged and have greater career confidence – key findings when employee engagement levels are causing consternation at consistently low levels3.

 

Companies that are… Purpose-led Non-purpose-led
I say more positive than negative things about my company… 81% 40%
I feel engaged and committed to my work 89% 59%
Which factors do you think negatively affect employee engagement at your company?

·         Stress caused by managerial pressure on short-term results…

·         The disappearance of traditional career paths and promotions…

·         Stress caused by a poor work-life balance…

 

 

24%

29%

41%

 

 

44%

43%

55%

 

A potential challenge for businesses is that only 55% of the managers in the survey believed it was their role to embed a purpose beyond profit mind-set more widely across the organisation.

Liz Ellis, HR Director at Danone UK & Ireland, comments: “At Danone we have long believed in the power of purpose to benefit both companies and employees alike.  For organisations it helps build reputation, staff engagement, resilience to market changes and, consequently, greater commercial success; while employees can enjoy greater job satisfaction and longer-term career development. It’s win-win.

“In our experience, if an organisation fits their values and gives them a sense of purpose, people will naturally contribute both within their role and the wider business.  The on-going task for companies like ours is two-fold: to make our purpose clear and relevant to all, and to empower people to make a difference. 

Mark Goyder, founder of Tomorrow’s Company and the report’s author, adds: “We have just seen Facebook run into major difficulty because it has shown that its main motivation has been profit, growth, and share price rather than serving customers and society. In this report you will find companies, both young and old, which are adapting to society’s needs and prospering because they have a purpose beyond profit.

Norman Pickavance, the CEO of Tomorrow’s Company added: “We know that some people consider a focus on purpose beyond profit an unaffordable luxury in today’s transactional world. But it is time to re-assess what we mean by progress and the contribution that companies make to our prosperity. In Tomorrow’s Company we have started to explore these questions and the stories told in this report are a powerful signpost of the changes we can expect and hope to see in the way business operates.”


The Courage of their Convictions
report can be read in full here. Key assertions include:

The report identifies five key stages that the organisations studied go through as they build from a strong purpose to a more agile and enduring organisation (please see diagram below). It concludes with an agenda for action for others who would like to follow in their footsteps. It is very important that while companies work through these five steps, they enable and welcome public scrutiny of how aligned their stated purpose is with their actual performance. To be a genuinely purpose-led business, you must practice what you preach; there can be no gap between what you say and what you do.

Liz Ellis concludes: “Embedding purpose into your company is a journey; an ongoing process that builds and evolves over time, and that requires continual commitment and nurturing. At Danone we are a certain way along our purpose path, and other companies are at different stages. What’s important is that there is ongoing review, understanding and engagement with both the process and the values and goals behind it.”

– ENDS –

 

Endorsements for The Courage of their Convictions:

“This is practical and timely report, drawing together a range of inspiring stories from both established and new companies. It shows how purpose can be transformative when it truly serves society, and is authentic, practical and inspiring. It also usefully points to the crucial need not to think about purpose in isolation, but to link it to how the business thinks about people, and the underlying evidence about human motivation. It is the quality of human relationships which purpose helps enable which are at the heart of enduring success. With so many different and inspiring stories it may not be so easy to distil the “foundational thinking” from which to build. This is why Blueprint has made available a Framework to guide  Decision Making and  Five  Principles of a purpose driven  Business

Charles Wookey, Blueprint for Better Business

“This report brings out the inspiring and enlightening ways in which so many businesses are thinking about purpose and embedding it into everything they do. It also shows the impact that this has on commercial outcomes as well as people and cultural outcomes. It is clear that purpose is as vital to the internal prosperity of an organisation as it is to external brand and reputation, and therefore the organisation’s longer-term sustainability and success.”

Peter Cheese, Chief Executive, CIPD

“Establishing and cleaving to a north star of purpose is fundamental to long term value creation in any business. Alongside the powerful evidence we’ve assembled at the Purposeful Company Taskforce, now comes these powerful testimonies. We must all keep demonstrating what’s possible so we achieve critical mass and start to transform business culture.”

Clare Chapman and Will Hutton, co-chairs of the Purposeful Company Taskforce

 

Notes to editors

  1. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,001 below board level managers. Fieldwork was undertaken between 2nd – 8th January 2018.  The survey was carried out online.
  2. Gallup State of the Global Workforce 2018 report

 

About Danone UK & Ireland

Dedicated to bringing health through food to as many people as possible, Danone is a leading food company built on four business lines: Fresh Dairy Products, Early Life Nutrition, Waters and Medical Nutrition. Through its mission and dual commitment to business success and social progress, the company aims to build a healthier future, thanks to better health, better lives and a better world, for all its stakeholders. In the UK & Ireland this includes 1,900 employees as well as consumers, customers, suppliers, shareholders and all the communities with which the company engages. Danone spans seven sites in the UK & Ireland, generating sales of more than €1.3bn and touching the lives of more than 17.5 million UK & Irish consumers. Danone’s brand portfolio includes Activia, evian, Aptamil and Neocate.

Danone UK & Ireland is a part of Danone Ltd and is listed on Euronext Paris and on the OTCQX market via an ADR (American Depositary Receipt) program. Danone is a component stock of leading social responsibility indexes including the Dow Jones Sustainability Indexes, Vigeo, the Ethical Sustainability Index and the FTSE4Good Index. http://corporate.danone.co.uk/

 

About Tomorrow’s Company

Tomorrow’s Company is an independent non-profit think tank that exists to inspire and enable companies to be a force for good in society. It believes business can create more value for shareholders and society by adopting an approach that focuses on purpose, values, relationships and the long term. It succeeds in its goal by convening business leaders, investors, policymakers and civil society organisations to develop practical solutions to shared challenges. It was founded in 1996 following the RSA inquiry into the role of business in a changing world. www.tomorrowscompany.com

Twitter: @Tomorrows_co

Linkedin: https://www.linkedin.com/company-beta/1100238/

 

For all media enquiries, please contact:

 

Kirsty.mair@fhflondon.co.uk / 0208 618 2892 / 07711 462 880

Stephanie.croucher@fhflondon.co.uk / 0208 618 2807 / 07725 610 588

Claire@tomorrowscompany.com / 0207 839 4040 / 01276 476 025

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