Why companies need a purpose

In a time of great economic, technological and geopolitical change, the role of a company has been changing radically. From being an entity committed to making decisions and putting in place initiatives to further the interest of its shareholders it should now also become an entity that creates links between its shareholders, workers, suppliers and local communities to understand and respond to the needs of all its stakeholders. 

This is a complex challenge. But as Larry Fink, CEO of Blackrock, says in his latest letter to the chief executives of the companies in which Blackrock invests, to prosper in the longer term each firm must produce not just profits but must demonstrate that it is making a positive contribution to society. Companies should bring benefit to all of their stakeholders – including shareholders, employees, customers and the local communities in which they operate. Without a sense of purpose, no company can reach its full potential. 

For this reason it is essential that there be a collective exercise to define our purpose, the reason why we exist, and the value added that we want to give the world and to state this explicitly both outside the company but particularly within the organization itself. 

Today more than ever, communicating the values of our businesses can engage and inspire our colleagues, generate loyalty in our suppliers and our customers and help us follow a path of sustainable growth in the long term.

Having a purpose therefore reveals the soul of the business, gives it its right place in the world, makes stakeholders understand that the objective of a business today can no longer be just the bottom line but must also be the pursuit of a more general interest.

Let us think now about Snam. We are not just an engineering company that builds and manages infrastructure for the gas sector. We are much more. With our work, we guarantee the stable and safe supply of sustainable energy, enabling millions of homes in Europe to have heating and lighting, we connect countries and communities, we create opportunities for development while respecting the environment, and we seek to be leaders in the energy transition towards a low-emission society. From all this our purpose “Energy to inspire the world” begins to take shape.

Having a purpose is a necessary condition but it is not enough. A serious commitment by management to respect this purpose and to put it into practice on a daily basis is also necessary both in smaller and larger actions. And it is the duty of the head of the business to demonstrate that these values guide our strategies, our investment decisions and our selection of people, and in general our decisions for the future, bringing into play transparency, emotions and personal involvement – everything needed to create a fair environment, one that can enable our colleagues to feel free to act for the best. 

Businesses that make their purpose an integral part of their company culture and of their strategies will be able to win the confidence of their people and of all their stakeholders, as well as being able to obtain economic results in the long term. This confidence is the key ingredient for being competitive in the market and particularly for being resilient and able to cope with the uncertainty of an environment that is constantly changing. By contrast, companies that sacrifice their values on the altar of short-term results will run the serious risk of jeopardizing their relationship with stakeholders, having demotivated personnel, not reaching their objectives and thus jeopardizing their own future.