What is the purpose of a company’s purpose? | with Hannah Grove and Jonathan Knowles

Sam, You're very welcome. It's episode 111, 111 of the shortest. I'm Johnny Campbell, your host for today's show and most of our shows. I'm also CEO and co founder of SocialT. And today's episode of the Shortlist is going to be dealing with a topic that I personally been very passionate about for many, many years and something that I've tried to sell or share with anyone who listen over the years, particularly in my earlier career in talent acquisition. But today I think it's important for all of us who work in any organization or work with any people in an organization, particularly those who are in leadership. And that is what is the purpose of a company's purpose? Yes, we're going to be talking about purpose on today's show and for those of you joining us live, listening live on LinkedIn or YouTube, we'd love to hear from you, join in the chat, the conversation. You can ask questions of our guests today or put in your own comments and we'd love you to contribute those listening to the podcast. We'll put any links that we share in the show notes and there are a couple of links I'm sure you'll want to check out in further detail. But let's get into the topic. Company purpose has become kind of a fashionable prop, so to speak, post pandemic organizations have realized that they need one, but there's a growing trend towards the inauthentic purpose. Cobbling together a purpose that lacks substance is akin to building a house on sand. The unstable foundation simply won't support the positive impact you think it will. So what should companies do? Well, we sought the advice of two experts on this topic that we respect massively and we were super impressed by. And they are Hannah Grove and Jonathan Knowles who are joining us today. Hannah is the non executive director of abrdm. Maybe it's Aberdeen. She'll tell me how I should be pronouncing it instead. And Jonathan is the founder of Type 2 Consulting and together they recently authored the incredible article what Is the Purpose of youf Purpose for Harvard Business Review, A link of which we'll share live. For those listening live and in the show notes, I encourage you to read that article, but we're gonna be chatting today to give you an idea of the sense of that article and to talk about the findings. And we'll talk about the importance of purpose, the confusion around the term, what organizations and leaders need to do to build an authentic purpose. And how is this linked back to talent acquisition Hannah and Jonathan, you're very welcome. Thanks both for joining us. I'm going to maybe ask Hannah to tell our listeners and our viewers a little about where we find you today, what your own background is, why this topic is purposeful for you and Jonathan might hand over to you after that to get your opinion.

Great, Jonny, thank you so much. And we're really delighted to be here with you today. So I am joining you from the wilds of New Hampshire. In fact, if you looked out the window, you might even see some bear and deer. In terms of my own background, I suppose the best way to describe is I'm a recovering chief marketing officer. I spent 23 years in financial services, primarily within a large publicly traded U.S. in fact global firm called State street, which is essentially an asset manager and asset servicer. And I retired during the pandemic and sought a non executive director career and delighted to be on the board of Aberdeen PLC as well as on the advisory board for Irrational Capital. And for me, purpose is something that, you know, you said it so well in your introduction. It's been a sort of light motif throughout my career, but particularly in B2B companies where I think there's been this sort of perception that you have to have this sort of rousing why. And for me it was really the connection to employee engagement and also a client and broader sort of stakeholder engagement that really sort of drove my interest. So that's been the sort of foundation for me to explore this further. CHARLES.

So if Hannah's a recovering cmo, I'm a recovering numberholic in the sense that my initial career was almost uniquely dealing with numbers. I started my career at the, at the bank of England, did an mba, went on to do value based management consulting which was a very heavy duty, Excel modeling, you know, allocation of capital. Before I had this Damascus Road experience that we weren't really creating value, we were capturing value for the companies. And I became obsessed with, well, how do humans perceive and receive value? Which led me onto a very enjoyable detour into brand consulting and design and creating new brands or rejuvenating old brands that have somehow become rather outdated. But I really wanted to get back into it seemed disconnected from the business and I really wanted to merge that idea of how do we make work meaningful for employees and customers whilst at the same time helping companies run themselves properly. And so I got back to my numbers and I tried to fuse the two sides together in the reason why the company is called type 2 is a reference to errors in Statistics, which is the idea that if you leave something out, you have a mistaken idea about how business works. And my belief was that we often, because we lack a language, we leave the human component out of business. And so for the last 15 years, I've been trying to advise companies about how to make their businesses more human and in so doing, make their businesses more sustainable. And as part of that, I had the huge honor of working with Hannah to see whether this was. This really did work. So that's, that's a bit about me.

In terms of that idea of bringing the UN I'm also going to share with her audience that Hannah used to rub shoulders with the likes of U2 and the Virgin Prunes in her punk rock days in the street Dublin City, where I'm broadcasting from today. But that might be the topic for another conversation, another podcast, a different day. What I particularly loved about the article that HBR published were the rich examples. And rather than being too academic, and it certainly came across as something that wasn't too academic, it was really grounded in reality or the amount of concrete examples, real companies, good and bad, to kind of illustrate the point on purpose. And I wanted to kind of open the conversation by discussing that word, first, purpose. Because I think for many of us, when we think of purposeful companies, we think of the likes of Tesla or any of, of Musk's kind of businesses, or we think of Patagonia or maybe Tom's Shoes, and we think of these organizations and it's quite obvious this kind of, you know, they're saving the world, saving the planet, or health care companies might have great purpose.

Hannah, you touched on it when you.

Said B2B companies perhaps struggle with that. Talk to me about the definition of purpose that you and your co authors defined in the article. Perhaps how it's a little bit different to that traditional save the world, or perhaps it's broader than that save the world purpose that many people might think of.

Yeah, I mean, I'm, I'm happy to kick off and then Jonathan, sort of hand over to you. I think for us it began with, as you said, Jonny, the sort of definition of purpose. Because I think it's become very conflated between that which we define as individuals, a purpose, our individual sort of whys, and how companies express purpose. And I think there's almost, and, you know, Jonathan and I have talked a great deal about this, this sort of anthropomorphization of, of companies as sort of human, living, breathing entities and needing to have a Y and I think the first thing for us in the work and in the article was to break down that there are in fact three different types of whys that might drive a purpose and that it doesn't always have to be this sort of North Star or sort of rousing why. And I think, you know, it's interesting, Johnny, I give Social talent great credit because I would say you have a very good and clearly defined why around. I think it's sort of great. People deserve to work for great companies and I think it's incredibly clear and it's inextricably linked to the strategy. And if I can sort of hand over to Jonathan to sort of parse that a little bit more in terms of those three types of wise and how we defined it.

Yeah. So as, as Hannah said, I, I think in some ways we, we owe a debt of gratitude to Simon Sinek in the sense that he elevated the, the idea of why. But in doing so he absolutely provided the wrong kind of framework because he, he defied your why in opposition to your how and your what. He said people don't care about your what. They don't care about your how, they just care about your why. So it's encouraged companies to feel that they have to define some world changing, highfalutin purpose that may only be tangentially related to their business. And I, I mean, I hate to pick on Hellman's because, you know, as a unilever company, they come from the very best place. But how a mayonnaise company can decide that its purpose is tackling food waste is the poster child for this kind of thinking that it's no, there's a nobility in making food taste good and that that is enough of a why. So we began from this idea that, that your why can actually come in three forms. There's, there's purpose as in function. So the purpose of a can opener is to open cans. It doesn't need a higher why. And so the purpose of certain companies is to do what they do and to make the very best product they can, whether it's mayonnaise or whether Mercedes talks about first move the world. And it's in inextricably linked with the what they do.