The Resurgence of Organisational Purpose
Strategies are time-bound and specific. But purpose is enduring and is the key to maintaining relevance.
In 2007, Nokia was the dominant mobile phone maker. The Finnish tech giant went about acquiring more than 100 startup companies and aggressively pursued a wide range of R&D projects. As it did so, the organisation become so immersed in its strategy that it began to lose sight of its purpose: Connecting people.
When the iPhone was introduced, making connecting people easier than it had ever been, Nokia lost most of its market and was eventually acquired by Microsoft. The thing is: strategies are time-bound and specific. But purpose is enduring and is the key to maintaining relevance. Before embarking on your next strategy retreat, start by reflecting on your organisation’s purpose.
For those in a leadership or directorial role, it’s likely you’ll be able to bring to mind your company’s purpose quickly and confidently. It’s the whole reason you’ve got skin in the game. Purpose is an articulation of why a company does what it does, and for whom it creates value. Ideally, it’s not just a coat that you pop on before you walk into the office – but a concept or belief that’s closer to your heart. The kind of thing that gets you out of bed every day.
Tune into the news, and you’ll see wave after wave of social and political upheaval. Trust of organisations, including governments, is low, and the growing Millennial Generation (presently 35% of the workforce) are expecting more of corporations to lead ethically, and meaningfully, in a tumultuous landscape.
Any executive worth their salt would do well to revisit the Big Existential Question: Why are we here?
Larry Fink, the head of investment firm Blackrock (an investment firm which controls $16 trillion in assets) said in his 2019 letter to CEOs, “Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders.” Note, he writes ‘stakeholders’, not shareholders. I’d argue that a compelling purpose applies to not just to the profit watchers and core employees, but customers and society as a whole.
“Purpose is not the sole pursuit of profits but the animating force for achieving them.” – Larry Fink, Blackrock
A company guided by purpose will unify its employees, partners and customers. For a start, decision making becomes clearer, from the corporate level to the cleaners, ultimately driving ethical behaviour throughout the organisation. (The cost of not addressing ethically questionable behaviour can collapse companies).
A team united in and clear on their purpose will also:
It’s not purpose OR profits. Instead, purpose helps sustain long-term financial returns.
In many cases, those in leadership roles (and those who work closely with them) have a strong connection to the company’s purpose. Unfortunately, that link to purpose often dissipates with each step removed from the boardroom.
It should be said that those in, say, front line customer service can gauge their impact in relation to the company purpose daily. However, many employees think of their responsibilities in terms of jobs to be done rather than the larger, aspirational purpose of the organisation.
We all search for more than a paycheque from a job (they’re always hiring at the abattoir, but get few applications). Any organisation looking to attract and retain satisfied, high performing individuals, needs to cater to these to have any chance of success:
The rise of the gig economy, remote offices and risk of automation seems to further strip away the nobility of having a job. It’s no wonder we see higher rates of attrition, sickies and general malaise creep up in jobs that (seem to) lack meaning.
One way to determine if your company’s actions are aligned with your purpose is to look at your incentives. If you’re offering financial rewards for achieving sales KPIs, when your purpose involves innovation or sustainability, there’s something out of whack.
Skeptical of how purpose can spur action? Look at the Not For Profit sector; types of organisations with a clear articulation of values. NFPs often have a foundation of volunteers: people who willingly offer up their time, energy and resources to connect with something that gives their life meaning.
Charities, for example, may have a grand purpose, perhaps bigger than they alone can achieve, such as ending world hunger. Their reason for being is right out there, front and centre, transparent to the people in the back office to those who donate, the fun-runners, anyone who gets up to take on a small part of the responsibility of the mission.
Taking profit out of the equation for a moment, what else is your organisation responsible for?
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