Rewiring a business around a new set of purpose-driven priorities is a huge undertaking. It can take several years and involve reassessing strategy, culture, innovation, and investment. Companies serious about purpose recognise that every decision either advances or detracts from the role they play in profitably solving problems for people and the planet.

In her latest podcast episode, Given CEO Becky Willan spoke with Peter Simpson, CEO of Anglian Water and founding member and co-Chair of the University of Cambridge’s Corporate Leaders Group (CLG), about what it takes for businesses to play a meaningful role in the transition to a climate-neutral, resource-efficient and socially inclusive economy. 

Listen to Purposing to get the insider's story on how Peter has led Anglian Water’s transformation into a truly purpose-driven business, including the move to enshrine their purpose in the fabric of their company constitution; their Articles of Association. These efforts have been widely recognised in the UK; they were named Responsible Business of the Year in 2017, voted ‘best place to work’ in the UK by Glassdoor in 2019, and earned the Queen’s Award for Sustainable Development in 2020.

Do you want to learn how to build a purpose-driven business from Given, the consultancy that’s helped some of the world's largest organisations become purposeful? Download the Insiders’ Guide to Purpose HERE.  

Links: 

BSI standard on purpose-LED business: 

https://www.bsigroup.com/en-GB/standards/bsi-knowledge/sustainability/purpose-and-esg-standards/ 

Responsible Business Tracker by Business in the Community: https://www.bitc.org.uk/the-responsible-business-tracker/

Apologies for the typos, this is an AI transcription

This week I'm joined by Peter Simpson, CEO of Anglian Water, a position he's held for almost 10 years. He's a huge advocate for purpose-driven business and is actively involved in pioneering work with businesses in the community and the University of Cambridge Institute for Sustainable Leadership. Through this conversation, you'll learn how to reorientate your business around the role you play in the world and create and hardwire a management system for the purpose.

Build the behaviors that create a purposeful culture. Before I speak with Peter, let's take a quick look back at his career to learn how he became one of the most well-respected, purpose-driven business leaders in the UK.

You can see you make a difference. And, that appealed to me.

And I met lots of frontline leaders running the operations of the business. And I thought that's where I'd like.

Yeah. It's certainly the best decision or one of the best decisions I've ever made.

Uh, they'd done it because they realized that they were gonna be short-lived unless they did this. And I just thought this is absolutely the way to go.

So the work of rewiring a business around a different set of priorities is really tough. , it takes time. You know, we're talking years, not quarters. It demands serious questions about strategy, culture, innovation, and investment. And all of this is ultimately about the decisions that get made in businesses day in and day out.

Companies that are serious about purpose understand this, and they recognize that every decision they make can either advance or detract from their purpose. So that's what this episode is all about. What's really involved in transforming a business around its purpose and what does it really look like to put purpose front and center of every decision you make?

So Peter, welcome to the show. Hi,

And for, for many, many years and probably since uh, the organization existed, we kind of just said that was about water. It was about the environment but in a Probably quite narrow perspective. I think it was probably in the mid two thousands when we realized that actually as an organization we ought to have a broader role.

And I think it was probably the emerging climate crisis, which made us start thinking again about it. What role we played, uh, we ought to be thinking beyond the sort of narrow confines of just water. We ought to be thinking about, well, what are we doing not just to adapt to the impact of climate change, but also what should we be doing in terms of showing leadership more broadly on mitigation?

And it's no good. us just sitting here in the east of England and saying, well, let's just adapt to what's coming. What are we doing in terms of leading, in terms of reducing our emissions? And, and, and that started, I suppose, the realization that there's a much broader role for business. Um, and it absolutely isn't just about essentially what it says on the tin, uh, or providing, um, returns to shareholders.

It's much more, it's much broad.

So can you describe some of the big shifts, I guess that that's led to, I guess both in terms of mindset and thinking, but also in terms of kind of acting and, and doing things differently as an organization?

If I, if it comes across that this is a nice linear process and it's all very straightforward and, you know, things slot into place very logically, uh, you know, it doesn't work like that, we. Realized that as we had to have a broader role and we coined the term and, and the mantra around love every drop, you know, Anglian Water, love every drop, it became the mantra for the organization and, and people at the time thought we were nuts.

Actually, I mean, it sounds odd now, but at the time, using it for a water company, scientists and technicians and engineers using the word love in, all of its publicity seemed really out. What we were trying to do is to recognize the fact that we needed to create an emotional connection with what is ultimately one of the most precious resources we've got water, and that was important.

That's been important on the purpose journey because, you know, we're tr what we're trying to do here is to demonstrate that, you know, we need to do lots of things ourselves, but we need to take lots of people with. That was an early revelation, really. I was, yeah. We realized that we had to get more people involved in this journey about what we were gonna do to improve the water environment, and what we were gonna do to conserve the water environment.

We could not do it on our own, but how do you actually kind of get action? How do you make that real for people? And what we did was we set what was called at the time, big, hairy, audacious goals. How do we put some big goals under this overall sort of mantra? They demonstrate there's tangible stuff gonna be going on.

One of them was, uh, halving the capital carbon, so halving the embodied carbon in everything we build and taking 20% of the cost out. So we tied together this idea of making things more efficient and ultimately driving a financial engine together with how to actually reduce our carbon impact. And it was a massive thing.

if I bring that to the current day, we've just hit 63% lower. So, the Objective was set as a macro objective, but then we enshrined it down within the organization to make sure everybody understood it was serious and it linked through to the overall purpose of what we were trying to achieve. That example

And I think it's clear from that example that the kind of impact on the business. Sort of what impact did that have on the people who were responsible for helping to realize those goals, you know, what was the experience of someone in the business who was suddenly sort of tasked with this huge, hairy, audacious, purpose-driven goal to help you achieve?

The key

We want you engaged in that. This is why this is the big picture. This is where the climate's going. We wanna be, we wanna be part of that. We also. We want to drive the financial engine of the organization as well. Now, what that, what that did was it, it forced our engineers and our supply chain to think differently.

If you couldn't do incremental change in that respect, you couldn't bring incremental solutions. So it drove a lot of innovation, a lot of genuine engineering, but it also drove alignment across the supply chain. So, in building the sort of structures in the organization, we made sure that the commercial models were you know, drove this as well and aligned with what we were trying to do here. It was tough though because there were an awful lot of projects that came across the desk, which was, you know, we've done a great job. It's 15% reduced carbon or, and 5% off the cost. And it took a lot of nerve to basically say, no, no, no.

And, you know, keep pushing back and saying, well, that's great, but you know, we, what else can.

So could you talk a little bit about why you felt that that was important to do and I guess where you've got to, cuz I think that specific idea about the role that you play for the region, I think is really interesting?

So we haven't lost the love every drop. That's a really important part of it. But what's happened now is we've framed it very much in terms of. Uh, environmental and social prosperity and the region that we serve, it's been a, a rallying call to everybody in the organization to understand what, what's it about, what are the most fundamental things too, to us as an organization.

And at the end of the day, if, if our region isn't being successful in its broadest sense, then we are not successful. If we think about. BHAGs that I talked about in terms of lovey drop. You know, we've now got a 25-year strategic direction statement that sits beneath that. And it brings out a sort of four big themes and it brings out themes like resilience, which are, has, has been a really big push for us.

Cause that the other side of, you know, thinking about climate changing climate, how to become resilient to drought and flood. So we've got a very clear statement around that. We enshrine our ambition around, uh, achieving net zero. In our, you know, long-term strategic direction statement, we enshrine, a clear statement about improving the ecological quality of attachments in which we operate.

Um, and we've got a statement in there which is about enabling, uh, sustainable economic and housing growth in the region, sustainable being the key word. But again, that all those things link that. So you've then got. A purpose statement, but then there's a 25-year strategic direction statement signed off by the board about what we're doing.

So whatever we're doing in our price reviews and all the other machinations and business plans, we're thinking what's the purpose and what are the headline, high level, highest level objectives, strategic ambitions we're trying to achieve? And, they're caught within four things, and we, and we tie everything those.

And I think there's obviously no kind of silver bullet. It takes time and it takes. But, and I think, you know, recognizing that this is a, a new thing for many businesses, there's no playbook for how you get it, right? So the appetite for kind of testing and learning and sometimes not getting it the right the first time is really important.

So I guess when we think about sort of how you hard wire. A purpose in decision making, you know, what have you found works? And, also, I guess really importantly, is there anything that you've tried that didn't have the impact that you thought it would in terms of enabling people to really make decisions that were driven by this idea of, of environmental social prosperity for the region?

So we've got a six capitals framework that enables us to develop baselines and measure what we mean by lots of, um, well sometimes airy-fairy concepts, because at the end of the day, if you're gonna decide are you gonna build this or that, you have to have a means of understanding what the trade-offs are and what the balance is.

And go into those decisions very clearly. So you might make a decision on an investment on an asset that, um, is perhaps less good in terms of the social contribution it makes than the, uh, the natural capital contribution it makes, for example, we have to be clear about that because when you make your next decision on the next asset, you're looking to say, well, how do we, how do we make sure on balance that we're still addressing all of these things?

And there's a lot of discussion at the moment about biodiversity. The reality, of course, is. There's money you can spend in certain areas to make a huge impact on increasing biodiversity. And there's an awful lot of money you can spend making. Very little difference. You know we did a huge exercise across the whole region, said, well, where do you get, where do you get your best bang for your investment in this particular area?

Biodiversity. We would never have thought of doing that work in the first. Had we not been thinking about the bigger picture?

You know, biodiversity over a social contribution. And I think having a really clear framework for being able to explain decisions as well. I think, you know, we found it really important as well. I think the other thing that you mentioned was around, uh, sort of the work or, or the conversations that you had with your suppliers and your supply chain as well.

So can you talk a little bit about sort of how you've been able to hardwire your purpose into how you work with suppliers and the contribution that sort of they've made to this transformation as well.

You know, we can't do this on our own. You know, one of the big things we did many years ago was set up alliances, the biggest one of which is something called the App One Alliance. And it's a fantastic organization because, and I, I suppose what we fundamentally did was we need to be joined at the hip with these organizations over a longer period of time.

So we contracted initially for 10 years and then over 15 years, to sort of charter way forward, which it gave, I suppose, those organizations more latitude to align with what we were trying to do and invest in it. This is organizations like Balfour Beatty, Barhale, and Skanska. The selection of all of those organizations has been based on whether we believe them.

Broadly aligned with kind of what we're about. Those organizations came with us on the journey, and they couldn't be successful unless we jointly actually achieved the objectives of, say, having capital carbon and, and reducing the cost. They couldn't be successful. It meant that we had to change what our expectations were as well.

It was no good us saying, well, we will only accept concrete square things and these, you know, these assets in the same way. Um, if actually, we've got a supply chain coming on and saying, well, hang on. I know you've done it this way for 25 years, but about, what about doing it this way? What about, hey, you know, natural Capital Solutions?

What about thinking about. Uh, not just building us, being employed to build concrete tanks. What about using the environment? What about treatment, wetlands, you know, what about those? What other opportunities are there to enhance biodiversity, and really contribute back to nature? Achieve the water quality objectives, and create immunity value.

And then when you evaluate it on six capitals, you go, oh, well, cap intellectual capital. Yeah, big tick, natural capital, big tick, social capital, big tick. Oh, guess what? Financial capital. It works cause it's a better overall whole-life cost solution. So that they've been absolutely pivotal on the journey and, without them, you know, we wouldn't have been able to do it.

I suspect many of us were quite ambitious about the pace at which we wanted to go, but the reality is these things take time. And the thing that's been, you know, difficult on the journey has been, you know, making sure we've got everybody on board and taking them on the journey with us getting buy into stuff that. The most important thing.

because I suppose I, I started way back, you know, we've got lots of, uh, of standards for how we operate and I started back in the days of British Standard 5, 7 50, and I, and I remember how badly we as a company implemented that, right? Way back when going back a lot of history. And I thought, Hmm, I could just see how we.

You know, this, this could be a real problem actually. I think the way it's been done is excellent and uh, yeah, I think the framework there is just set at the right level. And, you know, going to the point about this podcast, that's a good place to go and have a look at sorts of things that you need to put in place when you're setting out to be a purpose-driven company.

Cuz it isn't. It isn't about that strapline at the top, it is actually about how do you develop that purpose that everybody does buy into. It really gets the link to the macro things that are affecting your organization and what it is that drives you and that financial engine, the commercials of it, so it fits and everybody goes, if we do, I can see if we're in that place. That's good in the overall macro context, but then it also does go down to the other things that you need to have, whether that be in terms of some of the frameworks we're talking about, or whether it means in terms of, you know, leadership.

That launched, I think fairly recently up with the BSI. One of the other things that you've done, which I think a lot of people have seen as really impressive, is Hardwiring your purpose to the extent that you've enshrined. Um, that idea of, uh, environmental social prosperity into your articles of association, so the legal document that sets out your responsibilities as a business.

So how did that come about? And, and, and I guess more importantly, what impact has it had, do you hope it will have for the business's ability to be a kind of truly purpose-driven organization?

The answer was, well, actually, yes. , but will it fundamentally change all of the things that we're doing? Well, we already changed them. We'd already changed them. So why do it then? And the why do it is very much about being. Clear with everybody about what it's about. It's about having it on the boilerplate of the company really, so that, uh, you know, we are owned by essentially pension funds, but ownership can change.

So it's really clear if anybody buys the company and we're a private company that only buys us it. That's what it says. That's what the articles are, this is what we're about. It's really, really clear and if you like, the most fundamental constitutional document that's there and, and our current owners going, yeah, that's absolutely how it, how it should be.

Um, It underlines the seriousness with which we take it. Cuz essentially what we're doing there is we are creating very clear duties for directors that say, you know, you have to, it's not an option. You have to consider these things in your, in your decision. So it isn't a purely about 1 72 shareholders actually about the community.

It's about the environment and it's about the owners of the business, the shareholders.

So I guess I had a question about who's ultimately responsible for holding you to account as c e o when it comes to delivering your purpose, and how does that really work in practice? Because I think we are seeing the kind of, the evolution of governance around purpose is something that I think hasn't been looked at in as much detail as it needs to.

So how does, how does that work at GLI Water?

What you can do is you can do a gap analysis really. And you can sort of do your radar diagram and you can say, well, yeah, we thought we were really good at this dimension, actually we're not. And more important than that perhaps is then you can see who are the companies who are doing more. And you know, if you're part of that, you know, business, the community, you can go and talk to those companies and learn when we're having conversations with customers through ours.

Customer board or we're having conversations through some of the assurance groups we have around price reviews and all that sort. This is all on the table at the same time. It's all it. It's all available. It's all open, it's all completely transparent, and it enables us to show, you know, what's going well, what's not going

I think we've touched a little bit on culture already, but I think, uh, in most organizations, there's usually a sort of default mindset around decision-making that's based either on cost or risk or sort of combination of the two. And I think what you've. Shown is that actually over time it's really possible to change that mindset and help people make decisions based on a different set of priorities.

But I think in our experience, a big part of how you do that, especially at the kind of outset, is giving people evidence and kind of examples, of what's possible. So, You know, often within organizations you have examples of these sort of totemic actions that have really built belief, you know, was that an important part of your journey?

And, if it was, what was the sort of totemic things that have really helped demonstrate to people that a different way of running the business is, is possible?

There's stuff that's being done. You know, we embarked, uh, quite a few years ago on looking at where the social challenges in the region were. And the thing the most was the fence. And right in the heart of the fence, the town of W Beach was having all kinds of issues. Transport connections were pretty awful.

The issues of unemployment were, were there and youth unemployment on a third generation unemploy, the whole raft of things. And we said, well, we can't solve everything for everybody, but if we were gonna focus our efforts, how might we shift the dial? And rather than just Anglian going, we went in with our entire supply chain and we did things that you wouldn't have anticipated probably us doing very early on. We set out to create a community center cuz it was a real need to create some community cohesion.

We carried on with that. Uh, over the years, we've been partnered with WBE for many years now and it's led to us, you know, working with the town on developing a vision for the future. It's meant we've developed a, a, a really powerful collaboration with a college, uh, college of West Angle, where we recruit all of the, um, construction, uh, apprentices for our alliances.

That's when we started recruiting all of our construction apprentices for the alliances. From that, from this particular college, we developed and co-developed a course with them. Then guarantee people opportunities. In, the supply chain. And that's been a terrific success. And that model actually has now become a model that we've rolled out elsewhere in the country, elsewhere in our region.

Now we have got engaged with a wide range of players on saying, what do we do for the future of the fans more broadly? rather than think about things from the narrow perspective of water company public water supply, what do we do to bring in flood risk? Things aren't traditionally associated with us.

They're associated with lots of other agencies and us. How do we bring that together, and how do we make sure that as we, as a water company builds a new reservoir in the fence, how do we do it in a way that actually. Enhances not just the availability of water for drinking water, but what can it do for the natural environment?

What could it do for the society there? What amenity value, can we get out of a new reservoir complex? Can we do it differently?

So it would be great to understand a bit more about what kind of, some of the things that you've done, to foster an environment where that's really possible for people. At all levels and kind in every part of the organization.

Having a purpose. You know, we borrow a lot of money. We invest a lot of money, so we, you know, borrow a lot of money to build things, you know, for the benefit of customers and the environment. But rather than just going out there and saying, well, we're borrowing the same way, we've always done it.

Our treasurer, uh, Jane Pilcher went out. Internationally and started saying, well, no, actually there are other options here. So we launched a few years ago, the very first green bonds for utilities. And so going with this whole point about the alignment between purpose and the financial engine and the organization, what that really meant is better value debt.

I'd call it cheaper debt, but she's called probably better value. It's made us realize there's a massive wall of investment that's waiting to go into organizations that get this stuff.

Another reflection, uh, I'd have is if I, if I went back probably, probably no more than 10 years ago, and I thought about some of the presentations that I used to do in London with our CFO to the financial community, let's call it in London, talking about our business and talking about, you know, why, why we'd like to invest in us.

It would be. A sort of presentation of two halves. You'd have my bit, which was talking about the overall business and what we're trying to do. And, during most of that, the audience would be shuffling through and, and looking at spreadsheets and various other things, but not, not really engaged.

And my, what I said, it didn't seem to kinda get too much attention. Uh, and then, then as soon as this, the presentation from my CFO came up with all the numbers in spreadsheets and, there was huge excitement and, and everybody was away. , it's totally different now. It's totally different now, um, that everybody is interested in what we're trying to do, where we're trying to get to, how we're delivering on our purpose, where we are having challenges.

That's where the conversation is. And it's more than that actually, cuz uh, you know, our CFOs talking, you know, I'm talking about that. Our CFO's talking about it and yeah, the numbers kind of evidence what we're doing, but it's not, you know, it's not a bunch of numbers on. I'm just saying, isn't that interesting?

They all add up. It's actually the nu this is, this is what we're saying. This is how the numbers are supporting that and this is actually why we, you know, think we've got a good sustainable business.

But I think that does come with, a different set of expectations from leaders within an organization. So I was wondering how you've supported your leaders. Through this journey and, and really, I, I guess specifically thinking about that leadership community, how you've empowered them to make decisions differently and I guess what that difference really looks like, you know, in terms of your expectations, say, compared to sort of 10 years ago when you took over as, as c e O.

I'm pretty clear about what they want to do. We like the values of the organization. Together we aim to build trust. We aim to do the right thing and we are aimed to always be exploring. And those values tie very much to the purpose and underline it. When we're bringing people in and we're appointing people, we are thinking about those things.

When we're talking about to our teams about what's important, we're, we're talking about, well, what are you doing in those values? It's very deliberately written as together. We, you know, together we build trust well together. That's very much about the collabo. Saying, we do not want a contract-to-client relationship in this organization.

We're part of a very embedded partnership, and that means we have to work together. We have to trust each other, and ultimately, you know, we expect people in the business to do the right thing. We expect, above everything else, to want people to do the right thing. We're, we wanna be an organization where everybody feels they can do the right thing.

It's not easy at the moment, despite what we're trying to do. , there are lots of constraints on, if you like, how we can achieve our environmental ambition. Simple examples would be, you know, to achieve the ecological status of rivers and the east of England that we want to achieve. We've got to do that in a way with others.

We cannot do that on our own as a water company. We've gotta be engaging with landowners, farmers, we've gotta be engaging with highways authorities, we've gotta be engaging with local planning role authorities. And I'd like to see over the next few years, this organization moving into a very different place.

We're actually, you know, we're taking a landscape approach to what we're trying to do to improve the environment. And using some of the building blocks we've, we've. But I'd like to see our help to see regulation change to enable us to do that. And I think through that, that will really open up our environmental ambition to the next level.

So here are a few things that I've taken from the conversation.

Don't be afraid to set big, pretty audacious, and long-term goals to create a clear and stretching vision of what putting your purpose into practice actually looks like.

It will give you the permission to do things you've never done before and drive entirely new ways of working.

There's no silver bullet for operationalizing your purpose, but a small number of totemic actions, bill believes. And really help hardwire your purpose into your business, whether it's about governance, metrics, processes, or incentives.

Start by focusing on the one or two things that will genuinely drive change in decision making as leadership is essential to creating purpose-driven change within any organization. Give your leaders the tools and training not only to make purpose-driven decisions but to tell powerful stories about the why what and how of the decisions they make day to.

We'll put links to the BSI standard on purpose-LED business and BT C'S Responsible Business Tracker in the show notes. So you can take a look at some of the tools Peter mentioned for yourself.

If you'd like more practical advice on building a purpose-driven business with brilliant insight from people like Peter, download the Insiders Guide to purpose@givenagency.com slash insiders guide.

Purposing is produced by Fascinate Productions.