Firms lag behind their clients when it comes to purpose
For our people and our customers, it is no longer enough simply to be what we are: manufacturers, retailers, hauliers, builders, utilities, advisers or designers. Organisations need to have a transcendent purpose to align with their customers’ expectations and to attract and retain good people whose values match their own.
For decades, companies have sought to differentiate their offering in an ever increasingly competitive world. But these efforts have focused on emphasising the relative advantages of their products and services. Now, the imperative is to differentiate their ethos - their visceral identity - by articulating what they stand for and ensuring their deeds match their words.
Having led a number of professional service firms during my career I have seen added value generated for a business when it is clear about its purpose. More than this, I’ve seen the true value it generates for those it is there to serve.
As someone once said to me: “unless you stand for something, you stand for nothing.” A fine illustration of this is Arup: a multidisciplinary design, engineering, architecture, planning and advisory firm operating globally to enhance the built environment. It was founded on an ethos which sustains its culture and success 75 years after it was established by the visionary Sir Ove Arup. Its original purpose was to “shape a better world” and it remains that way today. Any visit to its web site is time well spent and it is an exemplar for other professional service firms.
Recent research undertaken by Bright Space Communications reveals those professional advisory businesses - specifically accountancy and legal practices - are behind the curve when articulating their purpose. We found that 26 (52%) of the UK’s top 50 accountancy firms and just 21 (42%) of the UK’s top 50 legal practices have a clearly defined higher purpose.
According to research by KPMG, however, 64% of these firms’ clients - the large UK corporates among their client bases - have a clearly stated transcendent purpose. Moreover, they aim to embed it in everything they do.
The gap between these two leading professions (average 47%) and the rest of industry (64%) is a not insignificant 17%. There needs to be more alignment between the interests of clients and their professional advisers. And soon. Large companies increasingly expect businesses within their supply chain, including professional service firms, to demonstrate the impact they’re seeking to make to the world across a range of metrics.
Whilst there is currently a tendency for companies to focus on the environment and societal sustainability, metrics can cover the full spectrum of ESG, CSR, ED&I and beyond. Purpose can be linked to any one of these themes or combination thereof.
Professional service firms lag behind their clients in this regard and to remain relevant they need to identify, communicate, embed, and act upon a clear purpose. But here’s the thing: according to KPMG, organisations which achieve this demonstrate higher rates of employee engagement and retention and superior rates of growth. Growth of at least 10%, notably more than those businesses which don’t recognise the importance of purpose.
It’s time we closed the gap as leaders in this sector. We need to truly understand the value we create to determine how we are able to grow - by attracting more customers (increased revenue), more people (great talent), and investors (capital). Consistently delivering on your purpose means delivering value that builds a great reputation. And that builds a great business.