Know your purpose
03 FEB 2020
Why does a company exist? Many people would probably say that a company’s main purpose is to run the business successfully. However, this answer is too short.
Why does a company exist? Many people would probably say that a company’s main purpose is to run the business successfully. However, this answer is too short. At Merck KGaA, Darmstadt, Germany, we not only want to operate profitably and serve the interests of our owners and shareholders. We also want to support our employees, society and the environment. I would even say that the one is not possible without the other.
Start with the “why”
Focusing on sales, profits and the share price is not enough to allow a company to remain successful over the course of decades. An overly narrow perspective, focused only on numbers and shareholder value, can even make it hard to see the essentials. The key question is what contribution a company makes towards a future worth living for all stakeholders. Or, to be more specific: What needs of society does a company meet with its products and services? What urgent problems does it solve? What motivates its employees to get up in the morning and go to work – apart from the fact that they are paid to do so?
Google, for example, aims to organize all the information in the world and make it universally accessible and helpful. This point of view – the “why” – takes into consideration not only the shareholders, but all the company’s relevant stakeholders and society as a whole.
Placing your products in the broader social context and being aware of what higher purpose your work serves is much more than just a marketing gimmick. Purpose has genuine economic meaning for companies. This is because, for some time now, the Western industrialized countries, in particular, have been seeing a shift in values in their societies. Increasingly, people want to know what is driving a company and what contribution it makes to the greater good. The coming generations will demand not only sound commercial performance from companies, but also sustainability, transparency and a focus on the common good.
Our contribution towards a smarter world
Within Electronics, we have a simple answer to the question of “why”: We want to advance digital living so that people can live longer, smarter and happier lives. Through our work, we pursue a greater social benefit. With our products, we drive what is currently the most radical and widespread trend in our society – digitalization. We do so by developing materials for technologies that significantly change the way we process, transmit and call up information.
Digital transformation has led to a genuine explosion in data. Whether smartphones, cars or industrial machinery – in an increasing number of areas, enormous quantities of digital information must be processed. This requires high-performance technologies. And this is where semiconductor and display materials from Electronics come into play. Today, these materials are in use in a wide and diverse range of areas that cover the entire cycle from generation to processing to visualization of data.
For example, our products are used for IoT applications, which generate large volumes of data via sensors. Our semiconductor chemicals are needed for the development of increasingly powerful microchips, which in turn enable processing-intensive applications such as AI. In data storage, our innovative materials enable, among other things, the production of increasingly smaller storage media. And our liquid crystals and OLED materials are needed for modern displays and virtual-reality glasses to ultimately visualize the data.
Even though our products are not readily visible, probably every one of you encounters technologies from EMD Electronics every day. We are the company behind other companies. With our products, we make industry and households smarter, the mobility of the future safer, and digital technologies more sustainable overall. This is what we understand as our contribution. Our purpose can also be summed up under the simple phrase “Advancing digital living”.
Do good and be rewarded for it
Making your contribution the focus of your operations is key to promoting employee satisfaction, attracting young talent, winning clients, investors and business partners, and preventing resistance in society and the political sphere. For example, for 28% of top talent, it is not material benefits that play the biggest role at work, but rather attractive and meaningful tasks. This was the finding of a study conducted by the global management consulting firm BCG.
In other words, companies that improve people’s lives and serve the good of the planet are more likely to be able to count on the support of their staff and of their relevant stakeholders. And companies that address relevant social challenges with their products will always meet demand from customers. So profit maximization on the one hand, and sustainable operations in the interest of the greater good on the other, are not contradictions – on the contrary. Every company should have an answer to the question of its “why”, and in this way create excitement among its employees for working to serve a greater purpose.