Purpose is strategy

According to Grant F. Reid, CEO and president of Mars, “Performance without purpose is meaningless, and purpose without performance is not possible. It’s the magic combination.”

For Mars CFO Claus Aagaard, “Private ownership provides a great platform to live our purpose as we can do the right things and faster without the worry of the market reaction.”

These quotes are taken from the Mars website, where the company’s top-tier leaders explain how they live out The Five Principles, core tenets proposed more than 100 years ago by company founders that still guide its global operations today.

These five principles form the groundwork of all Mars decisions:

  • Quality of work
  • Responsibility to act now, as individuals and as a company
  • Mutuality of benefit to stakeholders
  • Efficiency in resource management
  • Financial freedom to make decisions, unencumbered by outside motivations

Until recently, Mars had never made these values known or explained their role in how the firm evaluates its performance. The leadership team opted for discretions since they understood them as intricately interwoven in the family’s history and perspective. But things have changed. As Mars Board Member Victoria B. Mars shares, “We can no longer operate as a family company that doesn’t take a stand.”

For this reason, in 2018, the family decided to present the Mars Compass, a benchmark that has helped them measure their progress for more than five generations, as well as a roadmap to guide their long-term strategy.

“As a family, we are passionate about having a positive impact on the world and believe the best way to do that is through our business. That’s why we reinvest more than 90% of profits back into Mars.

This enables us to have a positive impact on the planet, society and the communities in which we operate. Creating shared value is at the heart of our Mars Compass and our aspirations as a family business,” explains Ms. Mars.

Neither philanthropy nor CSR

Purpose is closely related to socioemotional heritage and is highly strategic in its focus, which is why it should not be confused with philanthropy or CSR. These practices are very commendable but not comparable, each with their own objectives, approach, resources and associated business areas.

The raison d’être of philanthropy resides in the generosity of business families and focuses on the needs of their communities. Often managed by a company foundation, philanthropic initiatives generally take the form of financial contributions or volunteering activities.

The role of CSR

Corporate social responsibility (CSR) highlights the company’s desire to act responsibly at every stage of the value chain by monitoring the social and environmental impact of its activities. To achieve this, specific budgets are usually allocated and managed by the sustainability or CSR department.

However, when we talk about purpose, we are talking about strategy. The main motivation behind this approach is long-term profitability. It doesn’t seek immediate results, but rather for a meaningful way of doing things that resonates for the entire organization.

As they say at Mars, “We face every day as an opportunity to define the world we want to live in tomorrow. We know our actions help us build a better world for generations to come.”

One thought on “Purpose is strategy

  1. Despite not being a strategy, purpose calls for a plan of action. Every strategic rationale we have encountered makes a critical contribution to the organization’s growth of purpose.

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