5 ways companies can transform to social purpose

Too many companies still understand their purpose — or fundamental reason for existence — as maximizing profits or shareholder wealth. How can they move beyond that narrow definition of purpose, towards defining how their businesses help address society’s challenges?

One of us (Coro) helped establish Canada’s United Way Social Purpose Institute. The organization helps companies create a pathway to business and societal success by articulating and scaling social purpose — not just financial purpose. The other of us (Sandra) has co-developed a five-part framework that provides a model for companies moving toward transformation.

In this article, we describe this framework and provide a case study of how Lafarge Eastern Canada has moved toward social purpose.

Shifting to social purpose requires a transformation process that is not easy to accomplish. In addition to defining a social purpose, those who lead such a transformation must change their paradigms or perspectives (view of the world), so that they can understand both the changed purpose and the reasons for it. Then, companies need to implement performance metrics that support the full transformation.

Purpose, paradigms, and performance metrics are three of five core dimensions of any system —including any organization — that need to change for that system to transform. In a paper titled Five Core Dimensions of Purposeful System Transformation, Sandra and co-author Steve Waddell argue that addressing these five core dimensions, the “5Ps,” can be a way to make a complex and difficult task more doable.

The graphic shows the 5Ps applied to social purpose.

The three Ps of purpose, paradigms (or perspectives), and performance metrics are the overarching framework that helps define a system and its relationship to stakeholders and the world. Then, these three collectively influence the other two Ps: practices (how work gets done) and power relations (how a company handles its stakeholder relationships).

Sound complicated? It’s actually about the fundamentals.

• A company defines its social purpose as the reason it exists.
• Leaders embed their purpose in their culture or paradigm.

• They pursue a business strategy designed to achieve the purpose
• The strategy gets turned into goals, targets, and performance metrics that fold into incentive systems and governance and management practices.
• The company collaborates with stakeholders on mutually beneficial purpose-driven goals, affecting their power relations.

Let’s see how one company uses these dimensions to change.

Lafarge Eastern Canada, a member of the Swiss-based Holcim Group, is the nation’s largest provider of sustainable construction materials, along with Lafarge Western Canada. Eastern Canada Leadership Team has worked with Coro at the United Way Social Purpose Institute (UWSPI) and pivoted towards a new purpose: ‘To build progress for people and the planet.’

As Lafarge recognizes there are negative environmental impacts in its industry sector, the company’s purpose positions it to invest in innovations to bring positive impacts to people and planet, where over time it can become a stronger force for good.

Indeed, at UWSPI we believe companies like Lafarge Eastern Canada that are driven by social purpose will gain competitive advantage, be able to navigate today’s turbulent business environment, and simultaneously contribute to a better world.

3. New paradigm to shape culture

Living its purpose for many companies first requires a shift in the paradigm — the perspectives and core assumptions that define the business and shape the internal culture. These are beliefs about how the world works in general and in the company specifically.

Social purpose companies, like Lafarge Eastern Canada, update their corporate values to instil purpose across the organization. To align its purpose to its corporate culture, Lafarge Eastern Canada refreshed its corporate values to include: passion (empowered and engaged to deliver excellence), collaboration (together we build the future), and grit (unwavering determination to succeed).

Lafarge plans to engage its workforce on these values and use them to guide performance management, reward performance, and attract talent. This engagement will foster the paradigm shift Lafarge seeks to inspire employees to execute on its purpose.

4. Changed power relations

This paradigm shift also means shifts in the power relations with external stakeholders like customers, suppliers, governments, and communities. As a social purpose company, Lafarge seeks to have collaborative, reciprocal, and mutually beneficial relationships with stakeholders around shared social purpose goals.

As with so much in sustainability, a single company cannot realize its social purpose on its own. Thus, a company’s orientation changes from managing its stakeholders to mobilizing them, creating a fundamental shift in power relations.

A case study: Lafarge has a goal of doubling Eastern Canada Recycled Aggregates (stone, sand and gravel) volumes by 2025. This means reusing demolition waste and returned concrete, avoiding the disposal of these materials in landfills and presenting a sustainable alternative to virgin materials or non-renewable resources.

To achieve that, the company’s Eastern Aggregates team has created an industry task force to work towards defining a set of regulations or even a certification system that will provide the minimum quality and consistency requirements for high-performing Recycled Aggregates. This team is collaborating with governments, universities, and industry groups such as Circular Economy Leadership Canada and Circular Innovation Council on education, toolkits, and pilot projects to remove barriers and scale solutions.

5. New operating practices

For a purpose to be effectively executed and its performance objectives realized, a company needs to transform its governance practices, including processes and policies. Boards and management need to refresh their governance and management policies to align them with the corporate purpose.

Lafarge Eastern Canada’s governance system includes its vision, mission, values, and corporate scorecard, all of which advance its social purpose. Its vision is to be the reference company for sustainable building solutions and its mission is to have the right people with the right skills and right motivation to accelerate growth, drive superior performance, expand solutions and products and lead in innovation and sustainability.

There is a global movement toward companies adopting an enduring societal reason for existing and acting.

Our goal is to help companies be successful in achieving their purpose and go beyond “purpose-washing.” To do that, they will need to deploy all five Ps of Purposeful System Transformation.