The Resurgence of Organisational Purpose

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.

Why do you do what you do?

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.

It’s time to revisit your organisational purpose.

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

Does purpose matter to profits?

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:

• Build customer loyalty;
• Better navigate disruption;
• Help attract and retain the best talent; and
• Provide the foundation of a culture capable of fulfilling your strategy.

It’s not purpose OR profits. Instead, purpose helps sustain long-term financial returns.

How to revisit your purpose.

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:

• Autonomy in how work is done
• Opportunities to learn and grow
• Support to connect on a meaningful level

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.

Purpose does what profit can not.

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?

Tips on becoming a purpose-driven organisation

• Don’t shape it in the boardroom. If this is going to touch hearts, executives need to go out and listen, really listen, to the workforce: their hopes, dreams, aspirations, needs. Understanding the most common, fundamental desires of your workforce will help you tap into their idea of purpose, bringing renewed energy and commitment.
• Make sure it’s authentic. If you’re not prepared to live up to that purpose every day then it’s not worth the paper it’s written on. Often this is tested at the most difficult of times, such as how we treat others in the face of catastrophe.
• Be prepared to take a short-term hit. Becoming a purpose-driven organisation may cost a little more in the short-term, but long-term gains will be worth it.
• Similarly, be prepared to take some painful decisions. If diversifying your product range means moving into areas not aligned to your purpose, think long and hard before doing so.
• Purpose is not a campaign or a program; it is imbued in the culture. Part of every strategic decision will made with purpose in mind. Hire people for purpose, link rewards, recognition and performance objectives to fulfilling the organisational purpose. And if you are a leader, take every opportunity to connect what people do on a day-to-day basis to the overall purpose.