Does your organisation have a sense of purpose?

I am not talking about the statement on the wall. 

I mean one that engages the whole organisation behind why your organisation exists.  It helps every individual to think about how their actions and decisions can help the organisation move towards the Purpose.  And, almost magically, encourages people to work together to identify solutions that didn’t exist in any one individual’s mind.

To be effective your Purpose must be truly lived.  It must be bought into and ideally co-created by the organization for it to work.  It should guide your strategy and decision making, and reflect your values. It reinforces that every person in the organization plays an equally key role in making it happen.

Creating a Purpose in isolation won’t deliver the extraordinary benefits a well implemented Purpose can.   Despite this over 50% of organisations have not elevated their Purpose above a marketing statement.[1]

This short article highlights some research that I believe makes a compelling case for why an organisation needs a sense of purpose. I pose five questions based on my experience of where organisations often stall, to help you identify where to focus your efforts.   If any of these apply to your organisation, you’ll find hints and tips to help you get moving again.

This is the first article in a 3-part series of practical articles, in association with Elgood Effective Learning, aimed at helping you deliver more benefits from your purpose and values.

Organizations that live their purpose deliver tangibly better results

When I first started consulting the general viewpoint was that organizations that focused on visions, missions, purpose, strategic intent, whatever the phrase of the day was, were a bit fluffy.  (Yes, I know these have different definitions, but in practice are frequently used interchangeably in organisations I have worked with). While those organizations were wasting time “finding themselves” the real organizations could swoop in with their superior focus on profit and performance and take the advantage.

But my 25 years of experience, thankfully supported by numerous sources of research, is that this is not the case.  Organizations that really embrace their purpose, putting it at the heart of their organization, deliver better results, over sustainable time frames.

 

  • Jim Collins and Jerry Porras in Built to Last”, showed that organizations with a deeply held core purpose that creates a strong identity and continuity throughout the business had stock that performed 15 times better than the overall stock market.
  • In their book Corporate Culture And Performance”, John Kotter and James Heskett show that over a decade-long period, purposeful, value-driven companies outperform their counterparts in stock price by a factor of 12.
  • “The business case for purpose” survey conducted by Harvard Business Review analytics and E&Y showed in those organizations where purpose had become a driver of strategy and decision-making, executives reported a greater ability to deliver revenue growth and drive successful innovation and ongoing transformation.

Purpose-driven companies make more money, have more engaged employees and more loyal customers, and are even better at innovation and transformational change.

It’s clear that purpose is not a fluffy, new-age term and should be given thoughtful consideration.

 

Why does having well implemented Purpose make such a substantial difference?

It is worth spending a while thinking about why Purpose delivers such an impact, as this helps guide us in implementing it effectively.

  • One of the primary benefits of a strong purpose statement is the clarity it brings. A clear purpose, guides the strategy, and helps everyone make better decisions and be more innovative about how the organization can reach its goals.

South West airline’s purpose is to “Connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.”  Even as an outsider reading this you can fully understand what the organization is about and the type of service you can expect.

Amazon.com’s vision is to be “earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

When they started out, selling books on line, the vision helped them to make impressive innovations in delivery times and online orders.  As they have grown the vision fits the equally innovative move into films and tv channels.

  • Equally, the reason why we are doing something is important to us as humans. Making things better for our customers or for the wider society is a powerful form of emotional compensation. When we can feel our day to day actions are making a difference in these areas we are more engaged and more innovative.

I worked with one organization whose vision was very inspiring, but the business was run to meet quarterly financial targets.  They would ship stock early to hit financial goals, even though it had a severe impact on customer satisfaction.  They would sell designs at a loss to hit quarterly sales targets.

Just imagine that you were part of their workforce.  Would you be investing your time and energy in trying to innovate?

It’s so much more rewarding to be part of something that is making a difference than to deliver a quarterly target.

 

What is stopping you putting purpose at your core?

From my 25 years of experience helping organizations to implement their strategies I have noticed a number of common patterns in organisations struggling to get their Purpose to work for them.

I have summarised these patterns in the diagnostic below.  If you would like to deliver more from your Purpose, then read through the questions below and answer them honestly.  Use them to prioritise your efforts.

 

 

1.       Do you really believe that creating a strong sense of purpose that drives your organization will deliver better performance?

Despite the hype (and the evidence), some CEOs and Leadership Teams still don’t really believe that a well implemented purpose is the thing that will make the difference.

Although I don’t believe that the Leadership Team always has more strategic knowledge than other parts of the organization, they do have the power to disrupt Purpose implementations.

There is no technical wizardry or complicated methodology behind creating a purpose driven company.  But it does take commitment, patience and persistence to turn a purpose statement into the heart of what you do.

If you or your team don’t believe that purpose is more powerful than a focus on profits, then you won’t give it the energy investment required.

 If you answered “no” and you’re the CEO, craft your purpose statement and move on.  If it’s your Leadership Team that are resistant, your first step is to spend time with them, building teamwork and selling the benefits of the purpose.

 

2.       Can you embrace the messiness that properly implementing a Purpose requires?

For most of us it feels uncomfortable to be out of control.  When we get into situations where we are unfamiliar our instinct is to make ourselves more comfortable by looking to our prior experiences, crafting a plan and monitoring its implementation.

Engaging more of the organization in drafting and implementing a purpose statement makes the outcome unknown and the timescales a little bit harder to predict. For many of us that can feel uncomfortable.  It can also be at odds with external pressures from our stakeholders.

But, of course, the messiness is the power of the process.  The strength lies in encouraging more of the organization to get engaged with the challenges of the organization and to help identify the key purpose.  If it takes longer to get to a core purpose, then that extra time in worthwhile.  It probably means that previously there was not the clarity required.

If you feel uncomfortable making the leap then start in a more controlled way, that you feel confident with.  Engage a smaller team to work with your leadership team to discover your purpose.  It is essential that you communicate to the whole organization, but maybe pilot more engaging methods in some key parts of the organization.  As you get more comfortable with the process you can then gradually engage more and more of the organization.

 

 

 

3.       Do you have clarity of direction?

The well written purpose statements make it all look easy.  Just like the South West airlines example above, it just seems like common sense.  But for many organizations, who have not put in the same amount of thought and work, it is not always that clear.  One organization I was asked to help had the vision “Be the best”.

In today’s volatile, uncertain, complex and ambiguous world many organization have a time when they experience some confusion about the business they are in.

Take yourself back to the bookshops that were blindsided by Amazon’s entry into the market.  Unclear of their own vision, they competed head on, discounting books with a cost structure that could not compete.  Now a few have realised that they can offer something Amazon cannot with their physical space and passionate and knowledgeable sellers.

The leadership team, with its particular profile and its history within the organization is not always the team that will unearth the new way forward.

Where there is not clarity of purpose involve more of the organisation in thinking about “Why you are in business?” and “What business are you in?”   These questions aren’t easy to answer, introducing tools, such as the Vision Canvas or the Business Model Canvas, can help the thought process.

 

4.       Have you given the right amount of guidance to allow delivery of the Purpose?  Not too much or too little?

The majority of organizations I have worked with have a purpose which they then support with a very detailed strategic plan.  Implementing a detailed strategic plan, accompanied with structures, policies, goals and targets underdoes much of the good work that the purpose sets out to deliver.

If you have detailed goals cascaded through the organizations people will make decisions that hit those sub unit goals as an end to itself, hiding deep-seated problems.

Ultimately most people will do what they need to do to avoid being shouted at or embarrassed.

A few organizations have a purpose, with no further guidance. Each team come up with their own short-term implementation plans, perhaps using Objectives and Key Results (OKRs).  The danger here is that you get a hodgepodge of technologies, systems and products that end up less than the sum of their parts.

Imagine if Amazon had not given any further guidance than its purpose when it first started out.  If it had moved immediately to e-readers, films and T.V., then it would have spread too thinly and would most likely still be making losses to this day.

The answer lies in achieving a balance between these two extremes, by employing a Minimum Viable Strategy.  The minimum viable strategy includes the purpose, the medium-term objectives of the organization and its values. 

These elements provide a guide creating coherence within the organization. But they create space where many possible actions and behaviours can occur.  This opens the way for sustained innovation throughout the organization.

 

5.       Have you truly engaged and inspired the organization?

The purpose needs to be something that everyone in the organization engages with.  Ideally, they will be part of its creation.  Whether they were or not, they definitely need to be part of the implementation.

I think we all know in our hearts that it is not enough to wordsmith a clever purpose statement and then stick it on posters that hang all around the office and perhaps print it on some stationery.  Although I have been employed by an organization that has done this.

Neither is it is enough to communicate our purpose in a way where the leaders present the purpose and then ask for questions.  Although it is an easy way to tick the communication box.

Any presentation on the purpose needs to be made personal by the presenter, what’s their story, why does it matter to them. 

To engage others, tap into their experiences, ongoing workshops identifying the barriers to implementing the purpose, or to discover new opportunities are great for this. 

And continually focus on highlighting successes.

 

Purpose takes time to identify, implement and embed…

…but even implementing one of these ideas will transform your carefully crafted statement into ripples of awareness and interest and start you on your journey.

 

What is preventing you from living your Purpose? I’d love to hear about your challenges. sarah@newroadconsulting.com Or if you have made Purpose live in your organisation, feel free to brag about your success in the comments!

This is the first article in a 3-part series of practical articles, in association with Elgood Effective Learning, aimed at helping you deliver more benefits from your purpose and values. The next article will focus on Values.

 

Recommended Reading:

“Start with Why: How Great Leaders Inspire Everyone To Take Action”, Simon Sinek, Penguin (2011)

“Built to Last: Successful Habits of Visionary Companies”, Collins and Porras, Harper Business (2002)

“Corporate Culture and Performance”, Kotter and Heskett, The Free Press (1992)

“A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas”, Warren Berger, Bloomsbury (2014)

“Resonate: Present Visual Stories That Transform Audiences”, Nancy Duarte, John Wiley & Sons, Inc (2010)

“Design a Better Business: New Tools, Skills and Mindset for Strategy and Innovation”, van der Pijl, Lokitz and Solomon, John Wiley & Sons, Inc (2016)

“The business case for purpose” survey, Harvard Business Review analytics sponsored by E&Y (2017)

[1]“The business case for purpose” survey conducted by Harvard Business Review analytics sponsored by E&Y