The Pacte law promulgated in May 2019 enshrined purpose in French law and enables companies to be recognized as mission companies in their statutes. The health crisis we're experiencing today is putting it on everyone's agenda. In Quebec, it's an emerging but very present topic.
We wanted to compare the Quebec and French approaches to the subject and their impact on organizations. On the French side, Agnès Rambaud-Paquin with the Des enjeux et des hommes team and her partner Martin Richer, founder of Management&RSE, have accumulated extensive experience on the subject, in sectors as varied as agri-food, services, industry, real estate and distribution. They share what they've learned on the subject. On the Canadian side, the team from Ellio, Conseil en stratégies durables, is bringing its complementary experience, particularly in Quebec.
In France, the current crisis has led to a sharp distinction being drawn between companies that make a vital contribution to society and those that make an incidental one. This has prompted, and should prompt, every organization to consider its role and the resources it needs to take part in collective challenges.
In the end, the companies that found themselves without an immediate purpose and anxious to find one, were faced with the urgent, improvised task of reflecting on their purpose and their legitimacy to work for the common good. Others have sought, sometimes in vain, to find a way to help the collective, and have been faced with a void of meaning or means.
The consequences of this crisis, which we know to be dramatic, are still difficult to assess. However, if there's one thing we can anticipate, it's that it has triggered a groundswell on the need to rethink the corporate world and the way it fits into the world; a quest for meaning that will lead us to collectively rethink what makes women and men work together on a common project around a real social utility.
"The contribution that the company wishes to make to the main social, societal, environmental and economic issues in its field of activity, by involving its key stakeholders, with a view to strengthening their collective ability to realize their ambitions for the common good."
In a context where articles are multiplying on the need to ensure an ecological, equitable and safe recovery... the implementation of such an approach must be supported to help managers.
Convinced that the evolution of society will depend on the power of human beings to lead change, Ellio and E&H have defined their purpose as being, respectively, to (Ellio) "develop the power of transformation of individuals, to help them lead their organizations towards sustainable models, which have a positive impact on society" and (E&H) "encourage the transition of organizations towards more sustainable models by providing players with the keys to inventing them with their ecosystem".
Unlike France, there is no law in Quebec to suggest that executives think about their purpose. And this is probably preferable here for the time being. Only the B Corp certification provides a framework and stimulus for the notion of private enterprise with a mission. Apart from incorporated companies, two legal statuses are available to business founders: the cooperative or the not-for-profit organization (including social economy enterprises).
In France, the content of the Pacte law, and the nature of the process to be undertaken to express its purpose or the "deliverables" to be produced, are still unclear. We often hear it said, for example, that companies all have their own purpose prevailing on the impetus of their founders. Or that the process is superfluous, since many companies have long since formulated their vision/mission/values triptych.
Reflecting on its purpose is not the same as asking about the company's activitý (Simon Sinek's what (1)), the service it provides to its clients, the place it intends to occupy in its market, or the particular way it conducts its business.
- the company's purpose, beyond the interests of its shareholders
- the company's place in its ecosystem
- its value creation for stakeholders
- its role as a player for the common good goes beyond that of an economic player
- its contribution today and tomorrow to major challenges (the why, the purpose), given its power to innovate and intervene (what the world would lack if it didn't exist).
Formulating its purpose means revisiting the company's own project, in a larger context of societal needs and planetary limits .
The teams of executives and managers who have taken part in this process have testified to an unusual approach (introspection, taking a step back, looking ahead well beyond their term of office), requiring real reflection to find the right alignment and drive innovation. It's often a realization of a more meaningful future.
Few companies in Quebec have yet succeeded in putting their finger and words on purpose. Some have clear visions and missions, but the impact they have on society at large is rarely formalized. Our corporate experiences show that thinking about the company's wider usefulness is a subject that very few managers have considered. However, the exercise often reveals an enthusiasm for answering this question, and has a significant mobilizing and creative effect. We also note that not all teams are ready to answer this question, and a certain period of maturation is often required to move from the classic vision to an assumed purpose .
We therefore more often see a mission or "about" than a purpose appear in companies' brand platforms, but these messages come closer to a purpose when these ambitions are very much rooted in the company's values. For example, Design by Judith Portier, one of our favorites from the Parcours développement durable Montréal 2018, states that its mission is (among other things) to "Anchor the ephemeral in the sustainable to leave a lasting memory". We can only imagine the range of activities that could result from this.
Another example is BESIDE, which "seeks to build bridges between people and nature, by developing immersive experiences and high-quality editorial content. We make ourselves the bearers of ideas, knowledge, initiatives and fascinating stories, capable of propelling us, collectively, towards a more sustainable future".
ECOTIERRA positions itself as "a developer of sustainable agroforestry projects generating positive environmental, economic and social impacts. We address one of the most pressing environmental issues of our time: deforestation caused by unsustainable land use. Working with small-scale producers to use land responsibly to accelerate the sustainable development of their communities, thereby combating climate change and land degradation."
Logically, these commitments will dictate the company's strategic choices. However, it's easy to imagine how complex it can be for an established company that wasn't founded on these values to make the shift and ensure consistency between purpose and operations. There is a discrepancy between corporate positioning, generally imagined in a boardroom by a small group, and operational choices. It's not uncommon for teams not only not to have participated, but not even to have been trained in how to apply this purpose to their businesses. And when the question arises of refusing a client because it is not aligned with our purpose, of paying extra to build a net positive or WELL-certified head office, or of stopping pressuring farmers to lower food prices, actions are often disconnected from corporate commitments. Decision-makers forget to take into account expenditure over the entire life-cycle of projects (ROI is sometimes much greater when looked at over a longer period, particularly in energy transition or renovation), and neglect to take into account extra-financial benefits such as employee mobilization and retention, the company's sympathy capital in its community, industry or value chain, and so on.
Reflection on purpose is the prerequisite for a profound transformation of our business model and practices, even if it is (still) too slow in view of the challenges facing humanity and our communities.
Some strategic choices seem to be aligned with a well-established purpose . Among the most illustrative French examples, Veolia's purpose , which required months of reflection, responds to the Sustainable Development Goals (2), and irrigates its entire Strategic Plan (3) and is expressed through 18 commitments made to stakeholders and 18 indicators that become the Executive Committee's dashboard for steering triple economic, social and environmental performance. These indicators are used to calculate a variable portion of the remuneration of the Group's senior managers, which can be as high as 30%.
Another example in France, when Camif closes its e-commerce site on Black Friday it is to be consistent with its intention to "Offer products and services for the home, designed to benefit mankind and the planet" and to "Mobilize its ecosystem .... to invent new models of consumption, production and organization."
The Loco zero-waste grocery team, also a participant in the Parcours développement durable Montréal 2018, aligns all its decisions with its ambition to "contribute to building an alternative, local and resilient food system by working in short circuits with farmers and small businesses". This company is an entrepreneurial success story, and the initiator of a movement throughout Quebec. Many other examples are alive and well, particularly in SMEs, which are often more nimble when it comes to reviewing their strategy.
As part of our Ellio strategic coaching in Quebec (sometimes leading to Ecoresponsible or B Corp certification), we can attest that structured plans enable commitments to percolate into internal processes and practices, and that teams are eager to see concrete results. Whether in procurement, one of the most promising vectors for turning corporate sustainability commitments into reality; partnership strategies with stakeholders, notably community organizations; communications (and increasingly in brand platforms, thanks to branding strategists who stand out for their convictions in this area); the use of shared governance and collective intelligence. Depending on the company's starting point and level of ambition, each approach is specific and meaningful.
This clearly shows that adopting a superficial approach, which avoids diagnosing all activities, confronting the sometimes difficult points of view of its stakeholders and then making binding decisions, inevitably exposes the company to the risk of "mission washing". If the company, and in particular its managers, are not ready to commit to the process "in good conscience", or if the timing is not right, it is preferable to postpone the project until the idea has gained ground.
In our view, the degree to which managers are mobilized today is directly correlated with whether or not purpose will become a driving force for transformation. Their detachment could give employees the impression that the approach is optional or requires only surface involvement on their part, when in fact the opposite is expected.
Involving directors in the project is just as necessary, so much so that the PACTE law in France gives them the initiative to initiate reflection on purpose.
Yet, paradoxically, our colleagues in France observe that many companies only involve their Boards at the end of the process, or even forget about them altogether. The case of SMEs is slightly different, since many do not have a Board of Directors, but for NPOs this involvement comes more naturally. At Communautique, for example, board members are an integral part of the think tank. At EXO, the paramunicipal entity that manages public transport in the Montreal metropolis, co-development meetings with the Board and management took place to align the ambitions of the organization's different management groups.
A number of companies do not plan to involve their external stakeholders, considering that purpose is first and foremost an expression of commitment that can only emerge from a phase of internal introspection.
When it comes to expressing the company's purpose and its contribution to the challenges facing external stakeholders (clients, local residents, etc.), of which they are partners (suppliers) or spokespersons (NGOs, media, etc.), we feel it is essential to take their point of view into account at some stage in the process, and to identify collaborative approaches that could have a greater impact.
Stakeholders further away from the company can offer a relevant mirror to internal stakeholders on purpose proposals and its concrete applications in operations.
It's useful to map the stakeholder categories of the specific organization or project early on in the process (e.g., once you've identified a real estate developer's purpose , you'll want to repeat the exercise for each real estate project, to adapt it to its specific environment). We can then decide on the best engagement strategy (between simple communication to the neighborhood and the creation of partnerships with urban farmers or community organizations in the real estate project, there are a multitude of relevant and creative mechanisms for greater impact).
In fact, social-ecological transition companies go much further than that: the company could decide to involve in its governance (on the Board of Directors or other decision-making body) any stakeholder on whom its activity has an impact. This can go as far as future generations... The idea is to seek out a diversity of viewpoints, which are not just interested in "sound financial management" as in a conventional Board of Directors.
Formulating a purpose is a challenge that involves focusing on the question of the company's "Why" (its purpose) (1). However, when everyone is focused on day-to-day performance, it's easier to gather testimonials on what the company does (the "What?") or how it does it (the "How?") than to get the kind of answers we're looking for.
Hence the need, in this quest for the precious "WHY", to take a step back from business practice to gain some perspective.
Numerous techniques are available to get minds off the ground (visioning, appreciative inquiry, design thinking...). Far from being a gimmick, mastering these techniques (in the emergence and convergence phases) is key to optimizing the output of the groups involved.
- archaeology" phases which, by taking the company out of its reality (projecting it into different eras, for example, based on past experiences or a projection into the future), enable us to identify the essence of people's aspirations regarding the company's role in society, identifying the common thread and points of discontinuitý.
- foresight phases which, by projecting into the future, enable us to anticipate major trends and the evolution of relevant issues for the company, and to imagine different development scenarios.
- reflexive phases on the major issues (ODD or SD issues inspired by BNQ21000) to better understand the evolution of the ecosystem and agree on the situation portrait of the organization.
- phases of analysis of the company's value-creation model and the use of the triple business model (economic, social and environmental) to go into detail about the organization's activities and business model that will support future commitments.
- On the one hand, between the promises of the future (which can quickly lead to a broad "field of possibilities" and projections that are disconnected from reality) and taking into account the precious impulse of the founders, how it has dissolved or endured, how the company has preserved it over time or, on the contrary, how it has mutated).
- On the other hand, between what society's major challenges demand and what the company can offer via its ecosystem, given its current business and contributions.
(1) Start With Why - How Great Leaders Inspire Everyone To Take Action - Sinek Simon - (2) https://www.un.org/sustainabledevelopment/fr/objectifs-de-developpement-durable/- (3) https://www.latribune.fr/entreprises-finance/transitions-ecologiques/ veolia-irrigue-sa-strategie-2020-2023-de-sa-raison-d-etre-840851. html
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