The topic of purpose has been trending for long enough now that the conversation has shifted from whether purpose is important, to how an organisation discovers and embeds its purpose within the business. This raises the question: who should lead this work? Some might argue that this is the role of HR, because your own people must own purpose, first and foremost. The brand team might champion the importance of brand to internal and external stakeholders in a purposeful organisation. Your CSR tea
team might highlight its work in building strategic partnerships with impact organisations that are making a meaningful difference.
All these perspectives are true. Each one of these stakeholders needs a seat at the table when it comes to uncovering your organisation’s higher purpose and building your purpose strategy. In fact, the entire executive leadership team should be involved. Most importantly, however, the CEO must be at the head of the table. Without the CEO leading on purpose, it loses relevance, because it signals to everyone else that the CEO and board do not consider it to be the key driver of the organisational strategy.
An organisation whose purpose is not led from the top either has the wrong purpose or the wrong leaders.
Purpose can no longer be framed as just a passive context for what you do in your business. It is about your identity and human endeavour: who you are and how you show up for the common good.
So, if your purpose does not drive your business strategy, you cannot claim to be a purpose-led organisation. You may have a purpose statement, but your organisation is not led by its stated intention. The true purpose your organisation serves is not what your purpose statement articulates. You either have the wrong purpose statement or your leaders are the wrong people to bring that purpose to life. Either way, there is a misalignment that will probably have a negative impact on the organisation. Unmet expectations usually end in tears.
Having a purpose statement vs being purpose-led
The Global Leadership Forecast 2018 found that getting purpose right builds organisational resilience and, crucially, improves long-term financial performance. It found that the real benefits come when leaders walk the walk by behaving in a manner that exemplifies their organisation’s purpose. Of 1500 global C-suite executives surveyed, 84 per cent said their business operated in an increasingly disrupted environment. In a disrupted world, purpose is a north star; a fixed point to help navigate through change and uncertainty.
The Global Leadership Forecast identified three types of organisations:
Those without a purpose Those with a purpose statement Purposeful organisations where leaders bring the stated purpose to life through behaviours.
The report found clear evidence that companies in the third category were earning a significant performance premium. The results tracked the financial performance of the companies surveyed, showing that companies with a purpose statement performed at the average (mean) of the organisations surveyed. Companies without a purpose statement underperformed by 42 per cent. Purposeful companies outperformed the average by 42 per cent.
How does being purposeful deliver stronger performance? The key advantages outlined in the report included:
Stronger culture with higher levels of psychological safetyHigher engagement levels and intent to stayHigher agilityHigher levels of trust and loyalty, leading to more resilience when the going gets tough. This affects retention of customers, employees and shareholders during times of crisis and transition Having a broader vision that serves all stakeholders and aspires to improve society gives purposeful organisations an advantage in their ability to identify risks and unexpected opportunities Purposeful organisations create a culture of coaching and development and cultivate better leadership.
Societal leadership becomes core business function
The context to this is that society is experiencing a crisis of leadership. Trust in democracies around the world has collapsed. Society’s traditional leaders are no longer trusted. Yet there are hints of optimism. The 2022 Edelman Trust Barometer found that businesses and non-government organisations are the only institutions considered both ethical and competent, with the ability to act as stabilising forces. Societal leadership is now considered a core business function.
By embracing their role as stewards of their organisation’s purpose, leaders will deliver on society’s changing expectations of them. Consequently, they will be better able to navigate their organisation through difficult times, positioning their businesses well for the future.