"Purpose" is the foreign word of the hour in the communications industry. This cloudy term is the subject of discussions about meaning and morality in what feels like half of the communications industry. Why is that? The "purpose" discussion is idle. A contribution to the discussion.
What is "Purpose"?
An English word meaning something like: Purpose, meaning, intention. It can't be quite precisely dialectized. The English term is remarkably diverse and fuzzy. This can also be explained by the Anglo-Saxon school of thought of utilitarianism. It says, extremely abbreviated: The "end use" (purpose) justifies the moral principles of ethics. Or proverbially: the end justifies the means.
In Germany, such an attitude makes people suspicious. In England, it is part of the cultural heritage. Bentham and other philosophers thought this way - at the time of Manchester capitalism, i.e. at the beginning of the 19th century. And that's how people seem to want to (should) think again now. Why?
What should "Purpose" be in corporate communications?
In a nutshell: more SENSE, stupid! A company must produce sense as soon as possible, otherwise it's over.
There is "a huge demand for meaning". There is a growing "realization that the pure pursuit of profit alone does not constitute a raison d'être" (says Roland Berger Unternehmensberatung). "Companies that... want to continue to exist must ... prove that they contribute to the positive development of society" (ibid.). Such companies are also demonstrably more successful economically because ... "Anyone who serves the good of the planet AND improves the existence of people is only too happy to support their success" (says so in a magazine for personnel managers).
So, dear companies: please save the planet immediately "from the core business" and make people happy. And no, unfortunately, the future economic success of a company can no longer be ensured with smaller coins.
So what is "Purpose" really?
Larry Fink is CEO of Blackrock, the largest investment company in the world. This is a company whose sole purpose is to maximize profits. "Shareholder value" in its purest form. Blackrock turns money into more money. Interest rates and profit margins in high-frequency trading take care of that. The company has assets of 6 BILLION dollars (no translation error) and it is described by the Economist as "the largest shadow bank in the world".
There are a lot of bots and algorithms working at Blackrock. And relatively few employees subject to social security and tax. Approximately 15,000 people generate annual revenues of nearly $15 billion. Profits are between 3 and 5 billion dollars per year and are currently taxed at an average effective tax rate of about 22%. That sounds like a lot, but in the tax rate ranking of the financial information service csimarket.com, it is only 970th. So the tax collection is quite well "optimized", other US financial institutions pay 40-50%. The Cayman Islands send their regards.
So this Larry Fink wrote a letter to every head of the 500 largest companies in the U.S. in time for the World Economic Forum in Davos. Quotes:
"As we enter 2019, commitment to a long-term approach is more important than ever....
Purpose is not the sole pursuit of profits but the animating force for achieving them.
Profits are in no way inconsistent with purpose - in fact, profits and purpose are inextricably linked."
Purpose, then, is a means of maximizing profits. "People, let's produce something useful and the profit will grow!" Apart from purely economic arguments, there is nothing to be said against this. And the media response was bombshell. Since then, communications consultants everywhere have been searching for "purpose," with more or less esoteric verbiage.
They leave the "long-term approach" out of it. Brand orientation? This was pursued by Porsche AG, for example, when it was still independent. It steadfastly refused to be listed on the stock exchange - because of the short-term (stupid) quarterly reports.
Exemplary "Purpose Statements
So the communications consultants get to work. And they also produce results, like these "Purpose Statements" here:
ING (Bank) "Empowering people to stay a step ahead in life and in business".
Kellog (Food) "Nourishing families so they can flourish and thrive."
IAG (Insurance): "To help people manage risk and recover from the hardship of unexpected loss".
Blackrock (Investment) "To help more and more people experience financial well-being".
Hot air, abstract, arbitrary, thin. Reads like it was written by a bad copywriter, a really bad one. You can tell because nothing of the empty formulas in business jargon sticks, absolutely NOTHING. Good copywriters write like that:
Coca Cola: "Enjoy
Never "Purpose Statements" - slogans are clearly better. But why so much moral hot air?
At the World Economic Forum in Davos, where the Larry Fink was also present, a young Dutchman made a memorable appearance, a historian named Rutger Bregman. In a panel discussion, he said the following:
"For me to be here for the first time is a pretty crazy experience. I mean, people here flew in on 1500 private jets to hear Sir Richard Attenborough talk about how we're ruining our planet.
I hear people here talking about participation and justice, about equality and transparency. But almost no one here is talking about the real issue: tax avoidance. No one is talking about making sure the rich pay their fair share. It feels like I'm at a firefighters' conference and no one is allowed to talk about water.
We're not talking rocket science here. We can talk endlessly about all these dull philanthropic clichés, we can invite Bono again, but, hey, we have to talk about taxes!
That's what it's all about: taxes, taxes, taxes. And all the rest is bullshit."
So is the "Purpose of Purpose" perhaps not only profit maximization, but also tax avoidance?
A small hint: taxes are used to finance services of general interest, social projects, ecological projects, all kinds of things that actually make the world a better place. However, this is done by the state and not in the private interest. So when will we see a "purpose hit list" of the biggest taxpayers?
A "purpose" discussion is idle. The tax discussion is by no means.
Update from 26.11. FAZ: "EU economy ministers could pass a resolution for more tax transparency this week".
The EU Commission had proposed the introduction of country-by-country reporting in April 2016 as a reaction to the Luxleaks affair. According to the proposal, companies operating in the EU with annual sales of more than 750 million euros would have to disclose how much profit they generate in the individual European countries and how much tax they pay there. In addition, they would have to disclose how much tax they pay outside the EU in total."
We can already see the result in front of us: Google (Purpose: "Don't be evil") officially makes a profit only in Ireland and gives a tax rate for it. In Germany and everywhere else in the EU they report "no profit", thus no taxes. Is that how it happens? In fact, to this day, they don't even report sales in Germany.