‘We are facing uncertain times” is starting to become a trite thing to say, isn’t it? During the pandemic and beyond, advice has been circulating the internet on how businesses can navigate uncertainty. At Kin&Co, we have worked with a wide range of organisations throughout this period to ensure they can remain resilient in the wake of turbulence, and come out stronger than before. 

However, this work never stops. The uncertainty of the pandemic has been replaced with the repercussions of its fallout, and the world of work in particular has likely changed forever in myriad ways. Employee morale is lower than ever, and rapid technological advances are creating a huge amount of uncertainty regarding job security, workforce composition, and the skills required for future employment. That is not to mention tricky landscape-level issues for businesses including financial market volatility, geopolitical threats, climate change, AI and changes in consumer behaviour.

So, what’s the secret to staying resilient and emerging stronger from challenging times? In order to survive – let alone thrive – you must invest in two intangible assets: purpose and culture.

How strong purpose and culture helps you navigate adversity

The most resilient companies of the future will be those with a highly engaged workforce that can respond quickly to changing circumstances, innovate and maintain a positive mindset in the face of a complex landscape. 

If this doesn’t sound like your company right now, you have an opportunity on your hands.

In a normal economy, culture and purpose show a great ROI: companies in the top quartile of employee engagement are 21% more profitable, 17% more productive, and experience nearly 60% less turnover. 

In times of uncertainty, though, this is amplified: after the 2008 recession, those that prioritised culture and purpose not only survived, but outperformed their competitors threefold. This is particularly relevant today; despite the current cost of living crisis, over half (59%) of professionals in Europe say they wouldn’t work for a company that doesn’t share their values, and not even a pay rise would change their minds (55%). 

In fact, because crises widen the gap between top and bottom performers, about 30% of a company’s long-run relative total shareholder return is driven by how it performs during crises.

To find out how these companies excelled, Kin&Co looked at a number of periods of historical uncertainty to find out what worked and what didn’t. 

A key factor was employee engagement. In a report released by the UK government one year after the 2008 recession, evidence showed that organisations with highly engaged employees were able to achieve 43% more revenue, 12% better customer advocacy, 18% higher productivity and 4x times greater financial performance.

On the flipside, “underinvestment in people and culture” during the crisis was one of the top reasons for failure cited by leaders whose businesses collapsed. Fast forward to now, and across Europe today, just 14% of people feel engaged with their work – clearly, there is huge opportunity for improvement. 

Therefore, not only is investing in purpose and culture a surefire way to navigate turbulent economies, it builds customer loyalty, preserves your brand value and protects your organisation’s reputation. 97% of companies that deeply integrate a broader sense of purpose into their DNA report a good or great deal of incremental value from doing so. Further, they remain competitive and continue to generate value even in a less-than-ideal economic climate. In fact, purposeful brands outperform the stock market by 133%

Knowing When to Invest in Purpose and Culture

So we know the importance of purpose and culture for building a resilient organisation. But how do you recognise the signs that indicate you need to invest in them? Take a look at the boxout below for challenges you may be facing.

If you’re noticing any of the above, it may be time to invest. While determining the appropriate level of investment can be challenging, our research suggests that the return on investment for purpose and culture is significantly amplified during times of uncertainty, making them attractive assets for CEOs to prioritise.

So, what should you do now?

As a thought starter, we would recommend stepping back and having a think about the following questions:

What you could get out of investing in purpose or culture initiatives: 

You’ll hardly believe it, but Expedia Inc. lowered its cost-per-hire by 50%, landing below the national average, by investing in company culture initiatives. Nike, on the other hand, experienced a 33% share price increase after revising its purpose to focus on uniting the world through sport.

Recently, PureGym has cited the pandemic as key to making the business stronger and clarifying its purpose. Their CEO, Matthew Valentine, has said “Purpose has always been very important to us. But since the pandemic, culturally we are much stronger. As a brand we are much clearer now on the role we play… over the last two years we have transformed and grown in ways we never would have expected, across our business.”

As purpose and culture experts, we’ve seen companies reap the benefits of investing in purpose and culture. From behaviour change work with Coca-Cola, to getting purpose back on track with Grant Thornton, to refreshing employee values with NatWest, results include employees feeling galvanised, heard, and supported – while firms experience increased productivity and resilience.   

Organisations that possess the traits above dominate their industries, attract top talent, and cultivate a culture of innovation and happiness among their employees.

In these extraordinary times, organisations must recognise the power of purpose and culture as strategic investments in building resilience and outperforming competitors. Let’s emerge stronger. If you’d like to have a chat about how we might be able to advise, we’re one email away.