Corporate Purpose Should Guide Your Company’s Position On The War On Ukraine
The public outcry over the Russian invasion of Ukraine has compelled many companies to respond with bold statements. More than ever before, companies are speaking up and stepping up. Those companies that anchor their statement in their corporate purpose are acting more strategically.
Companies and their executives have called Russia’s actions “unlawful and horrific” (Accenture) and “senseless and unprovoked” (Bain), while being “deeply shocked and concerned” (Bayer) and “horrified, angered and saddened” (Microsoft). Words like support, community, concern, and solidarity are prevalent.
The Russian invasion has elicited corporate public statements like no other, even from companies without direct ties to Russia or Ukraine. It is quite clear that the war has deeply affected executives, employees, customers, and partnering companies. This widespread condemnation by corporations is a departure from other international political events. Before this war, most corporations often remained either neutral or silent in the face of military actions.
Your Purpose, Mission or Values Should Guide Your Position
Being part of this type of public discourse is inevitably divisive. No matter what is said, some constituencies will support the statement, others will oppose it. Faced with competing interests and ongoing geopolitical uncertainties, as I argued previously, it is important that companies lean on their purpose, mission, and values to guide their responses. They need to anchor on what the organization does and how it intends to do it.
My research team analyzed the corporate statements made by 50 companies in response to the war. Only 13 restated their purpose. Those that did anchored their statements of the war in Russia on their corporate purpose offered strategic positions.
The others tended to echo popular sentiments. They used values-based language, which risks backlash, as people might see their positions flip flopping from previous statements.
Three Corporate Responses to the War
For those companies that anchored their statements in purpose, we found three major actions, as described below.
Pause
Starbucks CEO Kevin Johnson was unequivocal in his response. He forcefully condemned Russia’s actions and temporarily shut down Starbucks’ operations across the country. The company also ensured that owners and staff at its franchises in Russia would be supported financially. Finally, he promised that his company would continue to respond in the spirit of its mission: “To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.”
Actions taken:
- Suspended all business activity in Russia, including shipment of products.
- Paused operations of 130 stores.
- Committed to supporting operators of those 130 franchises.
- Before suspending operations, committed to donating royalties from Russian franchises to humanitarian efforts in Ukraine.
- Donated $500,000 to World Central Kitchen and the Red Cross for humanitarian relief efforts for Ukraine via the Starbucks Foundation.
Leave
Global consulting firm KPMG opted to divest from Russia entirely, severing the Russian arm of its business. The public spokesperson said in a statement that the company had a responsibility to respond to the military attack, adding: “We are a purpose-led and values-driven organization that believes in doing the right thing.”
Actions taken:
- Removed operations in Russia and Belarus from KPMG network.
- Ended “working relationships” with approximately 4500 people.
- Committed to providing transitional support to those affected by the decision.
Stay
Pharmaceutical company Bayer condemned Russia’s actions as well, but sticking to its mission led the company to a different conclusion than Starbucks and KPMG. In an effort to promote “Health for all — Hunger for none,” CEO Werner Baumann committed Bayer to staying put in Russia, regardless of the geopolitical situation.
- Committed to continued operations in Russia, but will not pursue any new business opportunities and new capital investment projects for the time being.
- Committed to taking “appropriate measures” to protect 700 employees in Ukraine.
- Established a 3 Million Euro Disaster Relief Fund and donated money and health products to 27,000 Ukrainian patients.
How NBS Listened, Learned and Anchored on Purpose
Here’s an example of how one organization learned the power of building on purpose. In full disclosure, it’s an organization I founded 18 years ago, but handed over the reins to the remarkable Jury Gualandris in September 2021.
The Network for Business Sustainability (NBS) issued its first position statement ever on March 4, but it was not anchored in its purpose. They wrote that “Isolating and pressuring Russia is seen as the most effective way to end this conflict” and so NBS would “suspend ties with Russian institutions.” However, some of their 40,000+ network members reacted to the strong statement, questioning whether it was upholding its purpose to advance sustainability action through connection and shared learning.
NBS responded to this criticism by listening and learning. They hosted a webinar to hear from their communities. On March 21, they revised their position and anchored their position in their purpose to mobilize sustainability knowledge.
Their revised statement no longer talked about suspending ties, but their need to “speak up and to engage in reflection and positive action,” which was more consistent with their role as a mediator of knowledge.
More than ever before, corporations are being asked to speak up and step up on crises and divisive events. Navigating these issues is tough, but companies that anchor their positions in their purpose are more likely to provide consistent, strategically aligned messaging.
Originally published at https://www.forbes.com.
