By Philippe Delpech, Sonepar President
As I travel across the countries where our group operates, people tell me that we are living through unprecedented times. What strikes me most, is the sheer number of complex challenges.
We have a global economy very difficult to predict with unprecedented country deficit levels, high-interest rates for the first time in 20 years, historical energy challenges plus a climate crisis where it seems we are wasting our last chances to prevent dangerous levels of global warming, and – perhaps most striking of all – war in Europe, and Middle East with major economic consequences and levels of tension that have not been seen since the Cuban Missile Crisis. And all these are underlined in our minds every day as we face a deluge of instantaneous and partial information from television, news websites, and social media.
People and culture have changed too. The expectations of previous generations were to work steadily, gradually improving themselves to build a better quality of life for them and even more for their children. But people of later generations, who will soon form most of the world’s workforce, are less interested in these values and more in meaning.
For a company, defining its purpose is about being clear about why it exists, how it will harness its heritage to build a better future, and how its people can stand together to move forward together.
Put this search for meaning together with the vast societal challenges that people want to help address and a single word comes to mind: purpose. Now more than ever people want purpose: a reason to get up every morning and to feel they can contribute to causes bigger than themselves. Given that we spend about 90,000 hours of our lives at work, I am a strong believer that business has a significant role to play in creating purpose in its broadest sense. And if a business has a purpose that speaks to people, it can provide meaning to its employees and all other stakeholders. Purpose is increasingly being talked about too: an Ernst & Young and Saïd Business School study found that public conversation about purpose increased fivefold between 1995 and 2014. For a company, defining its purpose is about being clear about why it exists, how it will harness its heritage to build a better future, and how its people can stand together to move forward together. Companies that do not make this journey risk being left behind and falling out of step with increasingly demanding expectations.
At a business level, being clear about purpose results in a series of wins. Companies perform better, employees find more meaning in their work, and attracting the best talent becomes easier. In addition, stakeholders become more engaged, customers are more loyal, and innovation and transformational change are boosted. Looking beyond this, to society’s issues, there can be major benefits too: contributions to tackling climate change, better societal integration, and reductions in inequalities.
It is easy to talk about the benefits of having a corporate purpose, but it is harder to define one. Purposes can be cause, corporate competence, or company culture focused, but in my view, there is one golden rule: they must ring true. They must reflect what the company is, what it does, and what it has the potential to do.
There are plenty of examples of failure. Under pressure from shareholders, lobby groups, and society in general, to be seen to be addressing societal challenges, some companies give in to the temptation to present themselves as something they are not. Such cases not only fail to unlock the riches of a clear purpose, but they put the benefits mentioned above into reverse. Stakeholders can easily spot a non-aligned purpose and even interviewees can quickly detect a proposition that does not match the company’s public persona – an immediate blow to recruiting high-quality talent.
Above all, integrating the purpose in key decisions and each process is what will really make it concrete, sustainable and will ensure all associates & stakeholders will live it every day & everywhere.
Avoiding these kinds of errors means hard work and serious reflection. A well-defined purpose should bring employees, suppliers, and customers together around a single proposition and can be the company’s guiding theme for years and even decades. The results of this work can sometimes seem obvious to those close to the company, but they often reflect rigorous processes of discussion with shareholders, employees, suppliers, and customers.
But the work does not stop there. It is vital that a company’s “purpose document” is not left on a shelf to collect dust – the result of one more corporate exercise. Communication is essential and, in many ways, a classic exercise in change management. Above all, integrating the purpose in key decisions and each process is what will really make it concrete, sustainable and will ensure all associates & stakeholders will live it every day & everywhere. Communication and governance are key in the first phases, but in the long run, strategic & operational integration will make the difference.
As we move through this decade of uncertainty, then, it is my view that only companies with a clearly defined and concrete purpose will continue to thrive. The journey is worth it, and the benefits are huge.
Sonepar launched its Purpose in 2023. Owned by a family with a long-term focus, with a new generation emerging at shareholder and associate levels, operating at the core of global electrification – our Purpose rings true! Now, the challenge lies in deploying it across the Group, and addressing all our stakeholders. It's an exciting challenge for Sonepar. Stay tuned on March 18, 2024.