Here is an excerpt from an article by Anupam Singhal and Ariel Gorelik for the MIT Sloan Management Review. To read the complete article, check out others, and obtain subscription information, please click here.
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The pandemic has created an atmosphere of great uncertainties and caused elevated levels of anxiety and stress, increasing the need for openness, guidance, and shared experiences, as well as compassionate leadership. In our new normal, purpose has taken priority over profit, challenging the fundamental ways in which businesses operate. The community at large is validating the purpose of an organization’s existence: Do its values align with those of its customers? How is it meeting the demands of the community and driving achievement in areas beyond financial performance?
The fixation with feature wars, product iterations, and chasing quarterly results in pursuit of public accolades is now diminishing. The focus today has shifted to organizations being more purpose-driven, valuing authenticity, and building deeper connections with customers. For many legacy brands, this newfound focus on purpose can be grueling, especially considering the recent emphasis on packing more and more features into products at a reduced cost. But people now prize personalized experiences over features.
With a growing demand for highly customized user experiences, associates across departments — from marketing and sales to support — must believe in the organization’s values and demonstrate it in every action. Everyone must constantly communicate to customers not just what we do but also what we stand for — whether it’s enabling innovation, promoting happiness, or being technologically relevant.
In earlier times, organizations often prioritized profitability and growth, focusing on top and bottom lines. However, as both our organizations have experienced, social solidarity has led to a significant shift in customers’ attitudes and perceptions. Today, they are looking for businesses whose practices align with their core beliefs. They are rightfully demanding a say in how organizations are run, and they are prepared to defect if the trust threshold isn’t met.
These developments require organizations to create, articulate, and exemplify purpose-driven strategies. Especially in the banking, financial services, and insurance sector, where customers have a multitude of options available, it’s crucial for organizations to evaluate what factors might compel customers to engage with them. Today, customers are not only choosing companies whose products meet their requirements but also whose values align with their own.
For that reason, organizations must now be all the more thoughtful and creative, finding ways to connect with customers and prioritize their needs. As we’ll discuss throughout this conversation: The customer must always be at the center of an organization’s purpose.
Ariel Gorelik: Most people would likely agree that the pandemic accelerated digital transformation. At the same time, it amplified the importance of purpose because digital brings transparency and exposure to the external world — social media is just one example. Digital means you can’t hide anymore.
Companies with clear purposes have the most resilience in the current volatile environment. They are more adept at dealing with uncertainties and tough competition. They come out ahead at a time when consumers express their disapproval based on considerations like purpose and values. A 2018 Cone/Porter Novelli study found that 78% of Americans believe companies should impact society positively, not just make money1. Two-thirds of respondents across age groups said they would switch from one product to a different one offered by a purpose-driven organization — a number that exceeds 90% for millennial respondents. Having a higher purpose doesn’t mean profits aren’t important; indeed, profits are a core tenet of our society. But now there is a clear understanding that aligning with customers, employees, partners, and community — the whole ecosystem — is a strong driver of profit today.
Anupam Singhal: For us at TCS, having a purpose-driven strategy has been part of how we have done business since our inception. Our parent organization, the Tata group, was founded more than 150 years ago. Even back then, when digital technology was not even a distant dream, our purpose and priority was giving back to the society and finding meaningful ways to enrich the lives of those around us. We are synonymous with trust, goodwill, and purpose today as well. Sixty-six percent of the equity share capital of Tata Sons, the principal investment holding company for the Tata companies, is dedicated to supporting our global philanthropic work. Since the onset of the pandemic, we have been helping local communities and responding to the crisis globally, contributing nearly $324 million toward relief and response efforts. And we’re committed to carrying on this legacy.
The well-being of our associates is another nonnegotiable commitment. As the pandemic crisis unfolded, with uncertainties causing widespread fear and anxiety, we wanted to help keep our associates safe. So we introduced multiple massive vaccination centers in India, not just for our employees but for their families as well.
On the sustainability front, we expect to be a carbon-neutral firm by 2030. We’re working toward this goal through activities ranging from adding more green buildings to leveraging our TCS Clever Energy solution to optimize energy consumption across our campuses. We want this world to be a better, safer place for our next generations.
Gorelik: Becoming purpose-driven has played out a bit differently in the insurance business. At AmTrust, we are in a small commercial segment serving Main Street America. We made a conscious decision to focus on this space. We are in business to write more premiums, but that is not our only purpose. We aim to help our customers avoid problems by providing education. They want us to tell them, “How can you help me prevent financial loss?” and “How can you help me become healthier?”
Today, nobody wants to just buy insurance. For example, every state has its own regulations for worker’s compensation insurance, but the coverage is typically much the same. The question becomes, “How do you differentiate yourself?” We found that you can’t really differentiate your firm based on rates or coverage. Instead, you need to demonstrate a strategy and a sense of purpose. We decided we were going to simplify the process of dealing with worker’s compensation, making it fast and easy instead of going into the typical long-winded underwriting process. We also help companies improve their safety practices to keep their workers healthy, helping them avoid pain and inconvenience.
The exact terms used to describe “purpose” aren’t that important. The word could be “mission,” “vision,” or “strategy.” Ideally, all of these concepts build off each other. You have a vision right off the bat, then you build your mission statement, and that translates to your strategy, which is underlaid by purpose.
At AmTrust, our vision and mission are to be a best-in-class global insurance and solution provider. That translates into our six core values: excellence, innovation, integrity, responsibility, inclusion, and teamwork. These core values create a framework that addresses our customers, our employees, our partners, our vendors, and our shareholders.
There are two layers to the AmTrust community. One layer is our clients. We call them our family. And the other is our employees, whom we call team members, and our independent agents. We regard both as family as well. In addition, we are always looking to contribute to the well-being of the communities where we operate.
For example, early in the COVID-19 pandemic lockdown, we knew our customers, who are small businesses — dry cleaners, restaurants, and pizza shops, for instance — were likely to be having major cash-flow problems as shutdowns vaporized their sales. So, in March 2020, we offered a moratorium on premium payments for a couple of months, until the end of May. We said, “Look, we don’t know what’s going to happen. We’ll give you time, and we’ll figure it out later.” Then we extended the moratorium to the end of July, when some money was beginning to flow with the government loans. That’s one way we said, “We see you as part of our family, and the right hand shouldn’t be cutting off the left hand.”
Singhal: At the core, our purpose is about improving the world. When the pandemic hit, some of our workforce was “on the bench” — that is, they were not active contributors in billable projects and therefore not generating revenue for the organization. Letting them go wasn’t even up for debate for us. We didn’t lay off anyone, not even our contractors. Our only priority for addressing this matter was: “What can we do to support them during this challenging time?” So we ensured that they received their paychecks on time; as a result, they were able to sustain themselves.
TCS also worked with customers who were critical to the pandemic response. For example, one of our clients is a medical equipment manufacturer. This company faced a tenfold increase in demand for ventilators and other life-support devices due to COVID-19. We proposed a solution to reduce the cycle time and meet the market demand by manufacturing additional devices each month. We transformed the manufacturing cycle into a lean process, leveraging TCS’ Machine First Delivery Model and integrating several manufacturing systems.
TCS helped other manufacturing clients improve workers’ well-being and prevent occupational hazards through the application of sensors, big data analytics, and AI. For example, nonintrusive IoT sensors were installed in workers’ headgear and gloves to monitor their movements, which were then benchmarked against an algorithm. This provided the organization’s leaders more visibility into operations design, helping them to understand the physical demands on workers and learn which movements and equipment could cause injuries on the job. After reviewing this data, we worked with doctors and occupational therapists to create enhanced best practices for safety on the production floor.
The moment CEOs put their whole focus on their customers’ success and well-being, instead of simply establishing a financial growth target, they become the customers’ true partners. That’s where a purpose-led strategy comes into play — when customers see that an insurance provider, or a bank, or any other type of provider is interested in their welfare and achievements and is making efforts to keep them safe.
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Here is a direct link to the complete article.
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