We have recently seen a number of corporations make decisions that by historical norms would appear to be at odds with what we would expect from leaders of major companies. Consider these three examples:

In 2014 the US healthcare retailer CVS decided to stop selling cigarettes, at an estimated cost of $2 billion, due to it being “the right thing for us to do for our customers and our company to help people on their path to better health,” according to Larry Merlo, CEO. He went on to say “put simply, the sale of tobacco products is inconsistent with our purpose.”

Paul Polman, the CEO of Unilever, announced that shareholders should sell if they did not agree with his decision to stop giving quarterly results and focus on the long-term creation of value that is “equitable, shared and sustainable.” This meant a focus on doubling revenues while reducing the carbon footprint by half, and sourcing 100% of its raw materials using environmental, social, and ethical principles.

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In the last few months, the food company Mars has sought to align its activities with its stated purpose of “better food today, a better world tomorrow” through saying to customers that “new labeling will indicate how often it is recommended you consume these products, based on how long it takes the body to restore balance after eating these meals.”

In all three cases, we are not only seeing companies articulate a purpose that goes beyond just delivering returns to shareholders – but also making decisions that, at least in the short-term, will cost them in terms of reduced revenues and/or increased costs.

What we are seeing is no longer a conflict between doing the “right” thing and commercial success, but rather, a complex interaction of factors that has the characteristics of a paradox – a situation in which oppositional tendencies are brought into close contact. The fundamental challenge is how to use such paradoxes to inform creative tensions – which lead to innovation and growth – rather than succumb to paralyzed indecision or poor judgment calls.

The leaders who resolve paradoxes follow a predictable path: they accept them, confront them, and figure out how to transcend them. Here’s a little more detail on each:

Acceptance:

Clearly articulate what a broad variety of stakeholders expect from your company over the short, medium and long-term – pay special attention both to non-obvious ones who may not be vocal, and to those who may appear excessively vocal or negative.

Understand and collectively acknowledge (in an appropriate way for different audiences) what the paradoxes are between these views and positions. An ability to hold these frequently conflicting views, without succumbing to the need to reduce discomfort and anxiety, is a key leadership trait.

Confrontation:

Reach out to stakeholder groups that have been highly critical of your corporation. Several leading companies have entered into negotiation/conflict resolution processes with groups such as NGOs and indigenous communities to find ways to accommodate their voices in the corporate decision-making activity.

Recognize that it may take time (think months or years) to resolve a paradox that is heavily embedded in old structures. As the CEO of a leading food company recently told me, in a response to a question about sugar in their products: ‘we could sell those businesses – but we would only be giving the problem to someone else. We could shut them down – but the market space would not go away and another company’s products would fill it. The only responsible reaction is to evolve customer taste away from overconsumption of harmful products. This is our ethical responsibility and it will take time’.

Transcendence:

Don’t strategize using old labels regarding what industry you are in, or what it takes to succeed in that industry, as it only paints half the picture, and may become increasingly redundant. For example, are you a drinks company which makes money from the sale of alcoholic beverages – and whose continual growth is dependent on increased consumption with corresponding health and social consequences? Or are you a company that makes social interactions more successful – something that alcohol can do – but this reframing opens up space for innovation and growth from many different types of products and services as well.

Make and announce brave decisions, rather than just statements of purpose, to stop doing things that are out of alignment with your ‘purpose’. Announcing what you will start doing is as important as what you will stop doing in the process of transformation.

The outcome of this process is not a polished statement of purpose – but significant decisions grounded in a deep understanding of purpose characterized by a quiet sense of service to something greater than the immediate needs of customers and short-term demands of investors.

Leaders have to get this right. The failure to resolve paradoxes between “purpose” and “performance” can lead to cynicism and low levels of trust in the authenticity of the corporation and its leaders, increases in regulation and fines by governments, a failure to attract high quality employees, and ultimately a failure to grow, innovate, and provide a return to investors.

This isn’t simply about “doing the right thing” – the fact is, in a messy world there may be many “right things” and doing one of them may mean not doing others. There will always be tradeoffs. This is about identifying and investing in new market opportunities, some of which may be still emergent, and that are aligned to your organization’s larger purpose. That not only pleases the diverse stakeholders you face today, but sets your organization on the path to a more stable and sustainable future.