Taking others into account is easier said than done

This article was first published in a Dutch Human Resource magazine, Werf&.

Bold statements

The Washington Redskins change their iconic name, Bol.com – an online reseller – is one of the first to ban the sell of products depicting a controversial caricature of a dark colored man – black peter - and Knorr renames her Gypsy sauce. Big actions with impact that allow companies to make a solid statement. This phenomenon is not new, by the way. For example, a Dutch company called Buys did this 14 years ago when they renamed their “negro’s kiss”. Which was a brown chocolate biscuit.

The positive impact economy

A solid statement may not be new or unique, but it is undeniably a trend to make one. More and more companies are taking into account their impact on planet and society. This is the world of purpose and organizational positive impact,there is no escaping it anymore. Because a strong purpose proposition is a no-brainer. More turnover, higher return on equity and more successful projects. Simultaneously, a weak purpose proposition leads to a significantly weaker position. Both in the traditional sense such as lower sales and profits, and in a broad sense such as lower valuation and larger environmental footprint.

Stakeholders drive your success

What is the connecting link between purpose and business results? Stakeholders. Media, investors, suppliers, customers and employees increasingly choose companies that do good and turn away from companies that fail to do so. Their support determines your company’s ability to generate revenue and access capital, raw materials and talent.

This is not some distant “it doesn’t apply to me” trend. This is also about the organization you work for. In fact, as an HR manager, you have a key role to play. Because you can increase the chances that stakeholders see your company as part of the solution, not the social and environmental problem. But beware: opting for a strong purpose proposition means your company is in for some serious effort.

Organizational requirements

It requires your board, management and employees to broaden their lens and take into account context and needs of stakeholders. It is important to know and empathically value those. Think of the working conditions of cocoa farmers which made a Dutch chocolate bar producer - Tony Chocolonely - opt for as many slave-free ingredients as possible. Now they are market leader for chocolate bars in the Netherlands.

It also requires a horizon that really extends beyond the next quarterly report. So that the future impact of the organization can be taken into account. One example is Unilever, which announced on 2 September 2020 that it is investing €1 billion over the next 10 years to eliminate ingredients from fossil fuels.

Finally, it calls for a tailored approach. Your stakeholders don't want a "why not join the parade" purpose. They want your specific purpose. A purpose they can believe in. Connect to. Which is more than just a fancy narrative but also calls for consistency in the products and behavior of your organization.

Tailored behavior and skills

A further-reaching horizon, a more inclusive mindset, more tailored approach and more consistency. This requires different behavior and skills. Therefore it requires an adaptation of HR tools. For example, on 27 July 2020, BMW indicated that the bonus for senior management is linked to the extent to which the company realizes sustainability ambitions.

Your HR challenge is to ensure that the way you assess and reward, hire and retain, manage and develop your leaders and talent contributes to your organization's purpose proposition. Including the underlying policies, systems and processes. Because they are also expected to be positive impact proof. 

Next steps

A big task with several possible approaches. If critical thinking is limited in your organization, then that is a good starting point. For a broader horizon, inclusiveness, individuality and consistency, it is crucial that individuals question the status quo. To find better alternatives, weigh those alternatives and then dare to stand up. Which is often not default behavior. In many organizations culture, organizational design and peer pressure lead to herd behaviour. And that's devastating for positive impact.

Companies cannot succeed in societies that fail

Positive impact is the next normal. It's a fundamentally different approach to doing business that touches your organization right in its core. In the future, it's even the only way. 

It is up to the HR manager of the 21st century to be ready for that future by reframing and modernizing the way of doing business. Especially since our planet and society can use that help. That is in the best interest of your organization. In the words of Paul Polman, former CEO of Unilever, now a director at Imagine, "Companies cannot succeed in societies that fail".