Purpose is key to management styles that help corporations engage and flourish – and moral purpose is the most important of all.
Anne Francke, chief executive, CMI
The CMI Management 2020 report on the future of management and leadership showed how fast attitudes were changing.
It contests that managers now expected their organisations to have, and live by, a clear sense of purpose.
In well-led organisations there are three Ps: purpose, people and potential.
“Purpose is the salt in the stew,” said CMI chief executive Ann Francke, “because it gives life to the other two.”
Deloitte’s Culture of Purpose survey, found that purpose-driven organisations – ones that focus on “making a positive impact on customers, employees and society in general” – are more confident about growth prospects and, significantly, enjoy higher levels of confidence from key stakeholders.
Shared Purpose = Shared Value
Businesses exist to make a profit. But they also exist to make a difference.
According to Gary Baker of BakerBrand, in today’s world, there’s increasing awareness that companies need to operate for a higher that stretches beyond making money and boosting shareholder value. A shared purpose that qualifies the existence of an organization, the impact it seeks to make in the world, and encompasses focus, clarity, motivation and fulfillment, that drive all organizational activities — innovation, creativity, culture, communication, processes, as well as performance and change.
With shared purpose a company can create positive value that is far greater than the sum of its part.
An organisation’s vision covers values, and the mission covers value. But something is missing. Shared purpose that aligns the commercial side of the business with social responsibility.
Something for people to participate in, belong to, engage with, co-create. Something to share with others.
Shared Purpose tells the world—not just what you do, but why you matter. Who you are and what you stand for, what you do and how it benefits others, whether it is employees or customers.
Companies are turning to purpose and authenticity” as a way to engage consumers and employees. When a company demonstrates an authentic purpose, consumers feel a connection to the products and company.
Shared purpose is a core tenet in the field of corporate social responsibility.
According to Sherry Hakimi is the founder and CEO of Sparktures, economic value and social value are not mutually exclusive. Creating economic value while addressing social needs and challenges. As Michael Porter and Mark Kramer wrote in Harvard Business Review: “Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.”
There are many ways that today’s purpose-driven companies can incorporate shared value into the core of the business.
As a company, it’s important to think about why you are in the business you’re in. What drives you? If your business succeeds, what would your ideal world look like?
Research consistently affirms that for organisations to prosper they must have a genuine, positive social purpose, not just a well-drafted mission statement.
Also confirms that employees are drawn to companies with a clearly defined purpose at the core — and that sense of shared purpose also helps drive better business performance and results.
Deloitte research found that purpose-driven companies are more confident, with survey respondents at those organizations consistently more likely to say their organizations will increase investments in the coming year in new technologies, expansion, new product development and employee training.
“The survey results strongly suggest that focusing on purpose, rather than profits, builds business confidence,” says Punit Renjen, chairman of Deloitte LLP. “This finding underscores the significant impact a culture of purpose can play in fostering a thriving business. Profits can be mercurial, but purpose is not.”
More than 80% of employees working for an organisation with a strong sense of purpose say that they are confident that their organisation will grow this year (compared to 48% in companies where there isn’t a similar sense of vocation).
“The passion that is released from having people who are trying to achieve a loftier purpose is huge,” says Sir Ronald Cohen, one of the pioneers of social impact investing. “It’s all very well trying to enthuse somebody about the corporate mission, but if that’s about improving earnings per share, then motivation can hit a glass ceiling. But if you say, ‘we’re doing this because we’re saving or improving people’s lives and enabling them to improve their education’, it taps into a wellspring of empathy.”
Purpose is key in helping corporations engage and flourish.
Purpose creates meaning and is essential for engaging your employees.
It gives your customers a connection to your company and creates ties to communities.
Danone and Mars, two of the world’s leading food manufacturers, launched a €120m impact investment fund that aims to improve “the productivity, incomes and living conditions of small rural farmers in developing countries”.
While travelling in Argentina, entrepreneur Blake Mycoskie was profoundly affected by seeing many children without shoes. He created Toms Shoes, a business that matches ‘one for one’ every pair of shoes that it sells with a new pair of shoes for a child in need. “We believe we can improve people’s lives through business,” is the company’s mantra. To date, it’s given away 35 million pairs of shoes.
Paul Polman, chief executive of Unilever, has surprised many with his determination to give the FMCG giant a sense of sustainable purpose. He certainly shocked the markets by moving Unilever away from quarterly reporting, so that his staff’s purpose might be protected from short-term rushes for shareholder value. “I did it on my first day as I figured ‘they can’t fire me on the first day they hire me,’” he said.
You don’t want to lose your purpose.
According to CMI’s Moral DNA report, when you do, you might lose a lot more. Look at Tesco. Look at the banks. These are once-great organisations that have become tarnished by blunders. They lost their sense of direction because profit became more important than purpose, and their moral compass fell apart.
So get your organisation a purpose and make sure you do 3 more things.
- First, communicate your purpose often.
- Second, measure your progress against your purpose for each of your stakeholder groups every year.
- Communicate to reinforce the power of shared purpose.
When we feel connected to the values of the organisation we work for, we perform better and behave more ethically.