Welcome 👋🏻 👋🏽 👋🏿 back to The Intentional Organisation Newsletter. 

The War in Ukraine has triggered an unprecedented series of corporate actions, with many companies deciding to pull out of Russia and Belarus beyond requirements linked to recent sanctions. How does this all relate to Purpose and intentionality?

Made with ❤️ in Veneto, Italy 🇮🇹.

💌 Was this newsletter forwarded by a friend? Don’t hesitate to subscribe to ensure you receive it freely every week! 🙏

Already a month has passed since Russia initiated the invasion of Ukraine. As I have been busy working on the #HRForUkraine initiative, I have been struck by the amount of “corporate activism” that immediately started to show in streams of solidarity and direct actions unexpected.

We have seen several different actions overlapping:

In the US, this is underscored by a general tendency by the public to expect companies (and CEOs particularly) to take a stand on important policy issues. According to the 2022 Edelman Trust Barometer:

Some latecomers are also evaluating a robust reputational risk here, as the topic of the invasion of Russia did not go on the traditional division lines of western politics. Most companies have started to quickly think about the risks to their reputation were they to do nothing. With so many other companies pulling out, it likely seemed better to explain to shareholders and customers back home why they’re leaving than why they’re staying.

However, the question for me is how this links in with topics of Purpose and Intentionality that we have been discussing lately.

This quote is by Stacia Garr, co-founder of RedThread Research. This company in 2020 issued interesting research on Purpose that underscores the necessity for a company to “publicly share purpose-based actions to normalize them”.

Focusing on different stakeholders, in alignment with the Purpose and values of an organisation, is critical in moments of crisis such as the one we see now. But decisions are never easy or “black and white”, especially in situations like the one we face. Leaders have faced Moral Dilemmas every day since the war started, each one requiring intentional action.

Let’s see a few examples.

This is how McDonald’s CEO announced the closure of all McDonald’s in Russia, a choice impacting more than 62.000 workers. Not easy, also because a significant portion of the stores is not operated directly but through franchising agreements, which has brought additional complexities. Some restaurants still reported opening two weeks after the decision. The closure is also underlined for its significance because it was one of the first openings to western lifestyles and has triggered immediate reactions by Russia’s Duma.

Some companies have instead been taking a different decision, continuing to provide service to Russian customers, based still on assumptions linked to their Purpose and values. So it is the case of Cloudflare. Its CEO has written a long explanation.

Two different choices, yet both rooted in strong cultural roots. Both also have tremendous ripple effects on the companies’ ecosystem, another element to consider.

Which underlines the fact that there is rarely one and only “right thing to do”. No straightforward answer. And that’s the entire point of having a Purpose that is a compass for moral and ethical action. It shows a path but does not dictate choices outside of the relationship system with all of the stakeholders at play.

Companies in the food, agricultural, consumer goods, pharma sector are adopting differentiated solutions depending on their product lines. Most have suspended advertising and investments. Many companies have stopped operations in Russia but based instead on supply chain shortages than on the company’s “political” decision. I have been tracking over 450 companies with the #HRForUkraine database to underline the impact of these suspensions on more than 450,000 workers in Russia.

Many of the companies that have been less willing to take more robust measures, underlined this precisely in terms of their “duty of care” for the employees in the country.

Yet also here there is no single straightforward answer, and HR these days has to confront an environment where also taking fundamental decisions is difficult. Just to give you a glimpse of the complexity:

And these are just a few issues that are arising, all needing an answer in terms of intentional action.

This situation has exposed, however, also another interesting aspect. Many business models have not been adapted to choices companies have made in terms of values, purpose and corporate sustainability. Marks & Spencer is an extraordinarily interesting case in this respect. A company deeply rooted in British history, with an ambitious sustainability agenda. Yet, despite its initial announcements of support, the company has been unable to close the Marks & Spencer stores in Russia, because they operate through a franchise agreement with a Turkish company.

The same is happening for many hotel chains, such as Marriott, and Yum Brands Burger King is facing the same difficulty.

These are perfect examples of choices that created Organisational Debt with far-reaching effects. If you set a Purpose for your brand, you need to be able to enact that purpose in every place where that brand is hanging. Seems such a simple idea, yet often not easily practised.

This new situation is bringing a lot of learning of what worked well with globalisation, and what instead didn’t. Many corporations are paying important tolls for their past choices, but some are also rapidly adapting.

Yet, we should not forget that this learning is coming against the back of the worst humanitarian disasters of this century. A war intentionally initiated by an autocratic government, with an increasing amount of unintentional consequences.

Let’s continue to approach all these moral dilemmas we are facing, keeping in mind the most important value of it all: our humanity.

Cover Photo by SOULSANA on Unsplash

Source: Liz Fosslien Linkedin

Don’t hesitate to reach out, either by hitting “reply” to this newsletter directly or using my blog’s contact form.