The Benefits of Organisational Purpose

You are setting yourself up for a corporate disaster if you fail to draw accurate delineation of organisational purpose for employees at different levels. Such a failure would expose not only the flaws in your communication strategy but would also affect employee satisfaction and engagement. 

Most people want to find meaning in what they do, no matter which level of corporate hierarchy they are at. Victor Frankl very aptly described this search for man’s purpose as ‘’highest calling’’ and a study conducted by Harvard Business Review in 2015 demonstrated that intrinsic motivation is one of the most important motivators for employees.  

Although this corroborates the Aristotelian wisdom ‘’Pleasure in the job puts perfection in the work”, it also begs  the question as to how purpose at work differs from purpose in life. It is probably noteworthy to mention that purpose and passion are not the same, with the former representing the why of doing something and the latter representing your degree of emotional engagement.

 

Defining purpose 

 

It is fairly well-known that many employees come in to work each day and simply to go through the motions to fulfil their work obligations. They lack engagement and passion for the work they do which leads to them not performing at their best. One of the key reasons for this is a failure to understand or align with organisational purpose.

The 2015 survey on organisational purpose by HBR defined organisational purpose as “an aspirational reason for being which inspires and provides a call to action for an organisation and its partners and stakeholders and provides benefit to local and global society.”

In other words, the survey positions organisational purpose as explaining the ‘why’ of an organisation, and not simply the ‘what’. Why does the organisation exist in the first place? What is the bigger picture and how is it connected to the whole? We have covered the whys and the hows of purpose in previous articles. Some of the benefits of crafting an organisational purpose succinctly include:

 

Attracting the best people

 

Purpose can be extremely useful when trying to convince prospective employees to join you. You need a reason that goes beyond superficial perks for your persuasion to work. As education standards and discussions around the ever-popular concept of business-and-society have increased, more people put an emphasis on ethical and sustainable business practices now. This translates into people putting more emphasis in working at places where they can have their intrinsic motivation satisfied apart from receiving competitive salaries. 

According to a report compiled by LinkedIn, 71% of professionals indicated that they would be willing to take a pay cut to work for a company who has a mission they believe in. Not only that but also 87% of people also expressed that having pride in the company they work for is important, and one of the top factors influencing the firm having a positive impact on society.  A strong purpose is what makes a person love $40k at a job rather than being miserable at a $100k where they cannot align with organizational purpose. To quote Daniel Lamarre, chief executive officer of the Canadian entertainment company Cirque du Soleil“At the end of the day, you want to be profitable, but that’s not the meaning of life.”

 

Innovate in the footsteps of founders 

 

Typically the most innovative and entrepreneurial minded people in an organisation are the founders. They are the ones who conceived the idea and came up with solutions to solve the challenges that allowed the company to scale. But part of what makes founders so innovative is their strong sense of purpose. They are often people who have experienced the problem first hand and developed an obsession in wanting to solve it. This lifestyle and behavioural trait is actually a very tell-tale sign of an entrepreneur where someone is energised by a purpose and would stop at nothing until it’s fulfilled. 

Every person in your team has something to contribute in regards to improving your organisation – from the sales team to the product team. But to tap into those ideas their brains have to be channelled and energised through purpose. This is where the real challenge comes in but when executed right, it ensures that you will leave behind a legacy of people committed to your organisation’s purpose who will not run the company in the ground.

 

Leveraging purpose for improving key business activities

 

In practice, strategy development, organisational culture and branding are the main areas that reap the rewards when a company’s purpose clearly laid out and acted upon. Other areas such as business and product development, customer acquisition and marketing also benefit substantially from it. Most importantly, the top brass’s adoption of an organisation’s purpose would ensure that they would take necessary steps to align business initiatives and performance metrics towards organisational purpose.

Since sales and customer service teams are the frontline of any organisation, one way in which customer acquisition might be increased is via instilling a fierce sense of purpose in your client relations teams. The higher customer acquisition could partly be explained by the fact that when employees understand and act in a purpose-driven manner, they would frequently go above and beyond what is expected to ensure the customer is happy and are convinced of the benefits that you can provide them. One study conducted by Brown and Stengel in 2011 even showed that purpose driven companies delivered returns on investments that were up to 400% more profitable than their counterparts. 

Not only does do purpose-driven employees exhibit more engagement at work but specifically if we talk about people working in marketing and sales department, their exceptional work would help convert customers into brand evangelists tomorrow. In fact, a 2018 Accenture-led study discovered that 63% of customers prefer to purchase from a purpose-driven brand. In terms of brand loyalty, a Cone study in 2018 found out that 79% of customers say that they are more loyal to companies with purpose. This supports the idea that customers tend to gravitate towards companies that consistently show a commitment to purpose through their actions rather than just doing it to stay relevant.

 

Weather the storms 

 

At all stages of your company’s lifecycle, you will encounter shocks that will test the resilience of your organisation. In order to weather the storms- be it in the form of financial crisis or missing internal growth milestones, organisational purpose is one factor that could guide your company’s anchor to not go astray from what it set out to do. 

Purpose also increases resilience, which describes your team and organisations ability to withstand shocks and stay within your organisation. If there is no sense of purpose, your team will become demoralised at the first sight of trouble. A failing organisation with no purpose will have employees looking to jump ship at the first opportunity, instead of trying to turn it around. 

 

Purpose is your unfair advantage

 

Ultimately, purpose acts as a strategic advantage in the same way as intellectual property, business models and strong customer relationships do. Purpose is the energising force that allows you to get the best out of your people – maximising their potential, happiness and fulfilment. In turn, you as a business leader, get more engagement which leads to a more optimised and productive workforce. A clear and specific purpose that is neither too generic nor too laconic and aligns well with the organisation’s culture would prevent the customer from perceiving the company as superficial or inauthentic.

When harnessed correctly, a specific purpose can help you win against your competitors when all things are equal. While it is true that most of the times, the purpose statement of an organisation is not based on hard metrics, it is important not to make lofty claims. Having a purpose-over-profit approach, contrary to Milton Friedman’s philosophy of profit-is-king, will help you steer your company towards a goal that is shared by senior management, employees and customers alike. After all, when has a business leader ever stood out if you do everything by the book?

 

About the author

Stefan Beiten

Stefan Beiten is a lawyer, international entrepreneur and investor from Berlin. With more than 20 years of experience, Stefan is an expert in building, scaling and managing successful businesses.

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