Long gone are the days when concepts like purpose were dismissed in favor of a company’s bottom line. Organizations are starting to understand that purpose matters (and pays off). A new type of executive is at the forefront of that shift: The Chief Purpose Officer.
Wait, so there are CFOs, CMOs, COOs and now, CPOs? Yes, and even companies like PwC, which is part of the “Big Four” accounting firms in the world, are embracing the role in their C-suite.
“The pace of business change and the growth and consolidation of certain market sectors is causing an increasing disconnect between staff, objectives, and operating values. This role is an attempt to better orchestrate and synchronize organizational functions,” says Theodore Klein, a managing partner at Boston Strategy Group and seasoned executive management and HR consultant.
Klein has first-hand experience in the establishment of a CPO, and he says that the benefits of having one include higher productivity, enhanced trust, and fewer organizational, functional, and informational silos. Having a CPO also tends to increase employee engagement and motivation.
Here is what you need to know about this new type of executive – and what it means about today’s business landscape.
What are the responsibilities of a Chief Purpose Officer?
Purpose, by definition, is a driving force – a person or group’s “why” and North Star for making decisions.
As Klein puts it, a business organization is a group of people motivated by a leader’s vision to accomplish defined goals. The group is guided by shared values. Without a strong “why,” things can get confusing.
“As organizations grow and become more complicated, goals and values can become confused, forgotten, conflicted, and ambiguous. A Chief Purpose Officer role (whether full-time or part-time) is there to clarify, communicate, and help focus professional staff on the goals and values of the organization,” he says.
Traditionally, this role was partially fulfilled by existing management. Chief Purpose Officers are now stepping in in bigger numbers to address some of the complex challenges that have surfaced since the pandemic, from a decrease in employee engagement and productivity to evolving stakeholder expectations.
The needs that Chief Purpose Officers address
“Stakeholder expectations are changing … and companies have to change with them. Having a clear purpose helps our business leaders to make decisions that, candidly, may go against traditional bottom-line thinking but help companies authentically commit to their purpose work,” shared Fran Katsoudas, Chief People, Policy & Purpose Officer at Cisco, in a recent Deloitte report on the importance of purpose in the workplace.
Wondering what kind of expectations we’re talking about? First, there’s the fact that, as Deloitte reports, “companies are increasingly being called upon by the public, employees, policymakers, investors, and other stakeholders to play a key role in addressing societal issues.”
For example, when Kanye West made the headlines for antisemitic comments, people called upon Adidas to cut ties with the rapper.
Additionally, businesses now have to navigate uncertain conditions such as inflation and supply chain issues. Survival depends on providing long-term value and being adaptable. Focusing on purpose helps teams play the long game and stay resilient.
Speaking of long-term value, the majority of the C-suite leaders surveyed by Deloitte viewed talent as the greatest driver of value, with 79% agreeing that purpose supports talent recruitment, engagement, and retention.
Interestingly, most executives in the Deloitte report also said their company has a clear and defined purpose strategy that is integrated with the core business strategy. In other words, leaders already understand that purpose is needed to make an impact. But 22% of the same executives shared that their company does not make it a priority to collect and report on purpose-related data, which suggests that purpose may not be so well integrated in daily activities. Enter the Chief Purpose Officer.
The dos and don’ts of having a Chief Purpose Officer
There are a few things to keep in mind to successfully implement a CPO role, including the relationship between the CEO and CPO. “The Chief Purpose Officer and CEO must be in 100% alignment over the goals, objectives, and values of the organization,” says Klein.
He adds that a Chief Purpose Officer must be charismatic and influential and have sufficient authority and clout.
Finally, it’s important to realize that not every single organization needs a CPO. Purpose-related responsibilities are not new and can be spread out throughout different levels of management. CPOs are most useful in specific contexts.
“[Having a CPO is most useful in organizations undergoing significant transformation, operating in highly disruptive industries, or facing critical operating issues,” according to Klein.
Whether the idea of a Chief Purpose Officer is here to stay or not, one thing is for sure: The rise of the role highlights the emergence of new paradigms in the business world.
