by NGOC ANH 10/09/2021, 03:10

Crisis as catalyst: Rethinking purpose and trust

Purpose and trust have always been intertwined in the culture of private companies, particularly at family-run businesses.

Even before the COVID-19 pandemic, companies around the world were engaged in a collective rethink about what drives business success beyond profit-making. Purpose and trust have always been intertwined in the culture of private companies, particularly at family-run businesses. But recent years have seen these organizations looking to formalize such considerations in their governance. In Deloitte Private’s Private company issues and opportunities report, this company highlighted how objectives around social impact were making their way into corporate mission statements and five-year plans.

Deloitte’s survey shows these already widespread efforts took on new meaning last year. Almost 70 percent of the respondents said purpose increased in importance for their organization as a direct result of the COVID-19 crisis, with Asia-Pacific leading the way. Highly resilient organizations were at the fore in this respect, with 84 percent of the executives saying they sharpened their focus on purpose, compared with just 49 percent of those from low-resilient organizations. Throughout the world, many of the companies spent 2020 concerned about the health and safety of their employees, a risk they continue to rate highly as they look ahead to the next three years.

Fundamentally, they understand this is a challenge that extends well beyond keeping their businesses running, as it involves issues of trust. Employees whose safety is prioritized trust their employers to continue to do right by them and put their needs first. Transparency is also critical: in a March global roundtable of organizations that hold the US Best Managed Companies distinction, executives highlighted the importance of frequent, open communications as a key ingredient in building trust with their employees, especially in times of uncertainty.

Of course, as Deloitte’s Future of Trust series captures, trust isn’t static, but it can be measured. Companies can take a variety of steps to understand how they are perceived by their various stakeholders. These include using diagnostic tools to quantify the current state of trust at their organizations, building stakeholder trust by using more advanced approaches for protecting data, and working to preserve trust across various domains spanning the functional scope of the company. These domains include areas such as customer experience, product quality, diversity, equity and inclusion programs and cyber risk among others.

Trust is also a central issue when it comes to the imprint companies leave on the world. The survey findings indicate that two-thirds of the respondents say their company remains focused on sustainability and carbon reductions despite the disruptions caused by COVID-19. And yet, there is still significant room for improvement, as a third of the respondents characterize environmental, social, and governance (ESG) issues as a low risk for the coming year and 14 percent saw no related risk at all. In its findings, Deloitte sees a direct correlation between respondents who see their organizations as not very resilient and those who aren’t that focused on sustainability and carbon reductions.