A Lie Detector Test for Do-Good Companies

More of us want to work for companies that put causes up there with profits. How do you know if they are?

Published: Oct 18, 2018

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It's one of the hottest movements in the workplace right now: companies doing good in a variety of ways, from feeding the hungry to focusing on more diversity hires at all levels. And an increasing number of workers say they also want to get more out of work than a paycheck; more than half of millennials say their job decisions are influenced by whether a prospective employer engages in a cause.

But let's face it. It's easy to say you're going to protect the environment or add more women to the board, but it's hard to pull off in an age when investors are breathing down your neck for profits first. That creates the prospect of well-intentioned executives accepting the hype-and making a job change-to join a "purpose-driven" company that frankly isn't.

The solution? It will take a little homework, but we dug up some reliable measuring sticks and methods for deciphering the difference between "say-good" and "do-good."

There's a different between companies who "say good" and "do good."

Read transcripts. (Seriously.)

As we all know, publicly traded US companies have to announce their results every three months, and after such an announcement is made, executives often hold a Q&A session with investors and sometimes journalists. Turns out, nearly anyone can listen (or read a transcript) of these calls. As boring as they can be, they can offer a lot of insights into a company's intentions and culture. One obvious giveaway: Are the executives spending a lot of time talking about their profit estimates for the next quarter-and less on their overarching purpose? Are they mentioning their latest diversity program? "Management can signal a focus on long-term strategy in which financial value is derived from purpose," says George Serafeim, a professor at Harvard Business School.

Ignore HR-get the dish from potential co-workers.

Job recruiters have a script and stick to it. Other employees, however, can tell you about the firm's commitment to purpose. A simple question to ask a regular employee: What is the purpose of the company? If the employee's first answer is "to create products" or "to make money" then it isn't a purpose-driven firm.

Experts also suggest asking employees about their compensation-not a dollar figure per se, but what metrics are used to calculate bonuses. If metrics such as quarterly sales or profit numbers make up a huge proportion of potential bonus, it means that the company is rewarding behavior that may be detrimental to a firm's overarching purpose.

Study the top dog.

There's no greater sign of a company's commitment to purpose than its leaders. For years, one of the pinnacle examples of this has been Richard Branson, whose Virgin empire has funded entrepreneurial programs and environmental causes. Also, CEOs who make themselves available, through town hall meetings or forums like TED Talks, often show they have a personal belief system that goes beyond profits. As investment and advisory firm founder Karan Rai said in a recent article, the CEOs who have figured out what they believe in often use that as "the North Star that guides their organizations."

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