{"id":455,"date":"2022-03-16T08:06:13","date_gmt":"2022-03-16T07:06:13","guid":{"rendered":"https:\/\/blog.iese.edu\/family-business\/?p=455"},"modified":"2023-01-09T10:07:14","modified_gmt":"2023-01-09T09:07:14","slug":"purpose-is-strategy","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/family-business\/2022\/purpose-is-strategy\/","title":{"rendered":"Purpose is strategy"},"content":{"rendered":"<p>According to Grant F. Reid, CEO and president of Mars, <strong>\u201cPerformance without purpose is meaningless, and purpose without performance is not possible. It&#8217;s the magic combination.\u201d <\/strong><\/p>\n<p>For Mars <a href=\"https:\/\/www.mars.com\/about\/leadership\">CFO Claus Aagaard<\/a>, &#8220;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.\u201d<\/p>\n<p>These quotes are taken from the Mars website, where the company&#8217;s top-tier leaders explain how they live out <a href=\"https:\/\/www.mars.com\/about\/five-principles\">The Five Principles<\/a>, core tenets proposed more than 100 years ago by company founders that still guide its global operations today.<\/p>\n<p>These five principles form the groundwork of all Mars decisions:<\/p>\n<ul>\n<li><strong>Quality\u00a0of work<\/strong><\/li>\n<li><strong>Responsibility to act now<\/strong>, as individuals and as a company<\/li>\n<li><strong>Mutuality\u00a0of benefit<\/strong> to stakeholders<\/li>\n<li>Efficiency in <strong>resource management<\/strong><\/li>\n<li><strong>Financial freedom <\/strong>to make decisions, unencumbered by outside motivations<\/li>\n<\/ul>\n<p>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\u2019s history and perspective. But things have changed. As Mars Board Member Victoria B. Mars shares, <strong>\u201cWe can no longer operate as a family company that doesn&#8217;t take a stand.\u201d<\/strong><\/p>\n<p>For this reason, in 2018, the family decided to present the <a href=\"https:\/\/www.mars.com\/about\/mars-compass\">Mars Compass<\/a>, 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.<\/p>\n<p>\u201cAs 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\u2019s why <strong>we reinvest more than 90% of profits back into Mars. <\/strong><\/p>\n<p>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,\u201d explains Ms. Mars.<\/p>\n<h2><span style=\"color: #ff0000\"><strong>Neither philanthropy nor CSR<\/strong><\/span><\/h2>\n<p><strong>Purpose is closely related to socioemotional heritage and is highly strategic in its focus<\/strong>, 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.<\/p>\n<p>The raison d&#8217;\u00eatre 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.<\/p>\n<h2><span style=\"color: #ff0000\"><strong>The role of CSR<\/strong><\/span><\/h2>\n<p>Corporate social responsibility (CSR) highlights the company&#8217;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.<\/p>\n<p>However, <strong>when we talk about purpose, we are talking about strategy<\/strong>. The main motivation behind this approach is long-term profitability. It doesn\u2019t seek immediate results, but rather for a meaningful way of doing things that resonates for the entire organization.<\/p>\n<p>As they say at Mars, \u201cWe 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.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to Grant F. Reid, CEO and president of Mars, \u201cPerformance without purpose is meaningless, and purpose without performance is not possible. It&#8217;s the magic combination.\u201d For Mars CFO Claus Aagaard, &#8220;Private ownership provides a great platform to live our purpose as we can do the right things and faster without the worry of the [&hellip;]<\/p>\n","protected":false},"author":954,"featured_media":456,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[352],"tags":[473,27583,41520],"class_list":["post-455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-csr","tag-philanthropy","tag-purpose","megacategoria-mc-strategy"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 5.0.1.1 - aioseo.com -->\n\t<meta name=\"description\" content=\"When we talk about purpose, we are talking about strategy. 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