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By Franz Paasche
In the last decade, we’ve seen a dramatic shift in how companies define value. Increasingly companies are moving beyond a sole focus on creating profits for shareholders to a multi-stakeholder approach that creates and shares value for multiple stakeholders and society. Institutional investors, consumers and, importantly, employees all value brands that stand for something more than profit maximization. To expand into new markets, earn and retain customer loyalty, and attract top talent, business leaders are working to leverage their platforms and resources to deliver meaningful positive impact for each of their key stakeholders. In this new era of profit and purpose, adopting a multi-stakeholder approach and reorienting focus on creating meaningful value that includes and also expands beyond delivering short-term gains is becoming critical to a company’s license to operate, and its success.
This commitment needs to be lived consistently, inside and outside a company, and it needs to be approached with the same strategic prioritization and rigorous measurement that we deliver when reporting to our investors. To that end, CEOs are increasingly turning to Corporate Affairs and Communications leaders to help craft and articulate the company’s mission and values for key stakeholder audiences. As the role of corporations in society has evolved, so too has the role of the communications professional in advising our C-suite colleagues on ways to lead, inspire and engage through strategic internal and external communications, and ongoing stakeholder engagement.
During my tenure at PayPal, I’ve been conscious of how our function – and certainly how my own role leading the Corporate Affairs team – has changed over the years and will undoubtedly continue to evolve to serve our company in this new multi-stakeholder environment. It was my great pleasure to have recently co-hosted a roundtable discussion on this evolving role of the communications professional in partnership with PRovoke Media at our offices in New York City. As I reflect on my own experiences and the insights my communications peers shared in this conversation, there are two themes that I believe will continue to shape our profession in 2020 and the years ahead. (The roundtable discussion can be read here.)
Values-based decision-making
With two-thirds of American consumers willing to switch from a product they typically buy to a new product from a purpose-driven company, and values-driven enterprises outperforming profit-first competitors on the Street, the business case for purpose is clear. Forward-thinking leaders and companies have come to learn that creating positive social impact and generating strong business results do not stand in conflict with each other. In fact, when a company executes well against clearly defined mission, vision and values, you will find employees are more engaged and inspired in their work, and shareholders and customers are eager to accompany you on this journey of purpose and profit.
To be successful in this climate, leadership teams must set the tone from the top by embedding their companies’ purpose into core strategy and consistently making decisions in line with the mission. As communications professionals, it is our role to not only provide counsel on when and how to communicate these decisions, but also to demonstrate effectively to all stakeholders how these decisions and stances align to values.
As more companies move toward purpose-driven leadership, and the communications function’s remit evolves to include stakeholder engagement across the public, private and social sectors – I anticipate we’ll continue to see even more business leaders shift to corporate affairs structures similar to what we implemented at PayPal nearly five years ago. With external communications, employee engagement, reputation risk management, government relations, and social/environmental impact under the corporate affairs umbrella, our function is well-positioned to provide senior leadership with a clear line of site into how our companies’ decisions and actions are resonating with key constituencies. The value of this contribution is growing in today’s multi-stakeholder environment.
A multi-stakeholder perspective
In recent years, more and more companies have moved from a single stakeholder lens to prioritizing a full spectrum of constituents, often with an emphasis on employees. Nearly every participant in our roundtable discussion shared this observation.
The challenges and opportunities facing the world today require companies to consider impact and engagement across all primary stakeholder groups – in PayPal’s case these are employees, customers, regulators and shareholders. These audiences are looking to companies that have prioritized purpose as a business imperative, as well as leaders who are using their social capital and influence to address societal issues and make a difference.
As corporate storytellers, we have the opportunity and responsibility to bring to life how our companies and leaders are working to address society’s most pressing challenges for our constituents. It is also incumbent upon us to understand our stakeholders’ interests – we sit in a unique position to bring in these insights and help translate them in ways that help our companies deliver against these evolving expectations. And in a long-term capacity, we can help measure and share the progress we’re making on issues of importance to key stakeholders.
At PayPal, financial stability and wellness has increasingly become an important issue for our customers and it’s an area in which we’re committed to delivering positive impact as a company. Taking a multi-stakeholder approach to this issue, we recently realized we could go further on this vision by also ensuring we’re living it internally with our employees around the world. Most recently, we announced that as part of a comprehensive set of programs designed to help our employees build financial security, we will be making every full-time employee a shareholder of PayPal. In addition, we’re lowering the cost and enhancing our benefits, raising wages where needed, and offering financial planning tools for all employees.
Investing in our employees’ wellbeing and addressing their financial wellness needs is part of how we contribute to creating an engaged and motivated community. In doing so, we will better position our global workforce to serve our customers and, in turn, create value for our shareholders. We believe that companies who put their employees first will have a competitive advantage in recruitment and in the retention of a diverse and loyal employee body that will further inspire customer engagement.
Our profession must continue evolve to meet the changing needs of companies and institutions, and the stakeholders they serve. I am always grateful for the opportunity to engage in candid discussions with peers to share insights, best practices and thoughts on how we can continue to raise our game and make a difference. Many thanks to Lippe Taylor and the PRovoke Media team for co-hosting our roundtable conversation and providing a forum for this important dialogue.
Franz Paasche is SVP, Corporate Affairs and Communications at PayPal.
