“Profit is not the purpose of a business, but rather the test of its validity”
Peter F. Drucker
Take a pen and paper, and write down the answer to the below questions.
- What is the purpose of your job?
- What is the goal of your team?
- What is the mission of your organisation?
Once you have the answers, take a good look at them. How do you feel? What behaviours do you need to project to reach your answers? Do they trigger survival instinct or do they promise a thriving road ahead?
Existing research shows that our brain is wired to see work as either being about personal fulfilment and serving others, or about status, advancement, and income.[i] Each of these drivers is valid, can, and often does position one towards success.
Lately, however, there has been a big push towards conducting business with purpose. A global survey conducted by Harvard and EY, that defined “purpose” as ‘“an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society,” found that 90% of executives recognised the importance of having such a purpose.[ii]
There is pressure on organisations to view profit as a means to an end, not an end in itself. There is a business need to create “meaning”. Why this shift?
This article explores the above topic.
THE HYPE ABOUT PURPOSE IS GROUNDED IN EVIDENCE
Simon Sinek has famously noted:
“People don’t buy WHAT you do, they buy WHY you do it”[iii]
There are hundreds of brands selling outdoor clothing. But Patagonia stands out because of its purpose driven mission: “Patagonia is in business to save our home planet”. Their mission is reflected in their actions. For instance, under its 1% initiative, Patagonia donates 1% of sales towards preservation and restoration of the natural environment.
Patagonia’s “Why” is its motivator. Its purpose. The profit that it earns is the test of the validity of its purpose.
There is widespread recognition that profit as a motivator does not take an organisation very far.[iv] It makes an organisation short-sighted, and jeopardises its ability to offer the engagement required for sustainable success and growth – both of the business and its employees. As one author notes, “an excessive focus on efficiency can produce startlingly negative effects, to the extent that superefficient businesses create the potential for social disorder.”[v]
On the other hand, a purpose-driven approach has a lot more to offer.
First, purpose drives profits. As E.Y. reports, there is research indicating that purpose-driven companies outperformed the S&P 500 by a factor of 14 between 1998 and 2013.[vi] This makes sense.
A purpose or a meaning beyond financial return attracts “a level of commitment and engagement no compensation package can create”. [vii] It drives engagement, brings people alive,[viii] and inspires (instead of manipulates) action. People seek to collaborate, instead of compete. The focus shifts to adding value and “building bridges”.[ix] As I see it, purpose helps people unleash their X factor.
Second, both Deloitte and E.Y. report that mission-driven companies are better at innovating and retaining talent. EY’s survey found that for 63.4% of executives “a sense of purpose helps them innovate and better able to disrupt or respond to disruption”.[x] Deloitte’s research also notes that purpose-driven companies tend to be first or second in their market segment.[xi]
Third, purpose leads to clarity in decision-making. Let’s face it. Business is hard and leaders are required to make tough decisions. Purpose becomes the anchor or the “north star” in the face of uncertainty.[xii] It grounds decisions on values, leading to respectable actions that serve a higher objective. A mission that appeals to the human inside us.
Fourth, employees want their jobs to be fulfilling. The 2019 Workforce Purpose Index indicates that more than twice as many people report wanting fulfilling work versus engaging work.[xiii] Purpose-oriented employees have been found to report higher levels of engagement and fulfilment with their work. It is therefore sensible to push for a workforce that is purpose-oriented.
A number of companies have ostensibly joined the purpose bandwagon and drafted attractive mission statements. The real challenge is enabling employees to feel connected with their organisation’s mission in their daily tasks. This is where we need to peoplenovate.
PURPOSE MUST AND CAN BE INFUSED, IN EVERY BUSINESS
“You can’t just adopt it…it has to be driven, operationally and in depth, by the CEO and the top leadership team”
Michael Beer[xiv]
A famous story goes like this: John F. Kennedy visited the NASA space center and asked a janitor what he was doing. The janitor is said to have responded: “Mr. President, I’m helping put a man on the moon”.
That is purpose. The feeling of being part of something bigger.
Organisations and team leaders should consider reframing role descriptions in a way that assigns tasks a “meaning” beyond profit generation and paper pushing: a value that is aligned with the organisation’s more significant purpose. This will allow employees to perceive their employment as a partnership; entered into the pursuit of a common objective. The thought itself is empowering.
The key to attaining role reframe is workplace relationships. The 2022 Workforce Purpose Index reports that the “largest gap in the workplace relationships is in supportive and purpose generating connections”. It is easy to build relationships that help us accomplish our tasks. They are, however, not enough to help us thrive. The latter requires intention, investment of effort, and a pre-disposition towards nurture.
Once organisations reframe the corporate roles, they must then, as a study by Imperative notes “hire” and “promote” on purpose.[xv] This would involve effecting a shift in focus from “perks and benefits” to “organisation’s mission, vision, products, and services”.[xvi]
Below is a list of other persuasive ways of infusing purpose in business:
- investment in the professional growth of employees;[xvii]
- investment in increasing employee self-awareness;[xviii]
- investment in peer learning, which is known to help employees experience psychological safety, growth, and meaningful connections;[xix]
- investment in managerial training with the aim of training them in relationship development;[xx]
- the intentional creation of “safe spaces” that allow relationship development;[xxi] and
- proactive and consistent communication of the organisation’s vision and mission at all levels.[xxii]
Finally, organisations must make it a point, as E.Y. notes in its report, to “measure what they treasure”.[xxiii] If the goal is to create a purpose-driven culture, then behaviours that drive purpose must be recognised and rewarded. I will go one step further and argue that organisations must assign equal weightage to such behaviours during performance assessments. Compliance with an organisation’s values and mission should be a necessity, not an option.
I will leave you with this quote by Tom Thiss:
“Having a purpose is the difference between making a living and making a life”.
[i] Imperative, 2015 Workforce Purpose Index, available at https://cdn.imperative.com/media/public/Purpose_Index_2015 last accessed on 10/12/2022 at 07:37 AM.
[ii] Harvard Business Review Analytic Service Report, “The Business Case for Purpose”, Harvard Business Review and EY, available at https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/digital/ey-the-business-case-for-purpose.pdf last accessed on 08/12/2022 at 19:09 PM.
[iii] Simon Sinek, “Start with the Why: How Great Leaders Inspire Everyone to Take Action”
[iv] See for example, Forbes, “How A Strong Corporate Purpose Leads To Long-Term Profits: An Interview With The ‘Father Of CSR’”, available at https://www.forbes.com/sites/timabansal/2022/01/14/how-a-strong-corporate-purpose-leads-to-long-term-profits-an-interview-with-the-father-of-csr/?sh=2ae2b38e6f82 last accessed on 10/12/2022 at 7:58 AM.
[v] Roger L. Martin, “The High Price of Efficiency”, Harvard Business Review available at https://hbr.org/2019/01/the-high-price-of-efficiency last accessed on 08/12/2022 at 19:47 PM.
[vi] E.Y. Global, “Chapter 2: Purpose Pays” in “Why business must harness the power of purpose”, available https://www.ey.com/en_uk/purpose/why-business-must-harness-the-power-of-purpose last accessed on 09/12/2022 at 17:58 PM.
[vii] Deloitte, “Becoming Irresistible: A new model for employee engagement” available at https://www2.deloitte.com/us/en/insights/deloitte-review/issue-16/employee-engagement-strategies.html last accessed on 10/12/2022 at 7:53 AM.
[viii] Deloitte, “Culture of purpose—Building business confidence; driving growth: 2014 core beliefs & culture survey, 2014” https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-leadership-2014-core-beliefs-culture-survey-040414.pdf last accessed on 10/12/2022 at 7:53 AM
[ix] E.Y. Global, “Chapter 3: Using purpose to enable success” in “Why business must harness the power of purpose” https://www.ey.com/en_uk/purpose/why-business-must-harness-the-power-of-purpose last accessed on 09/12/2022 at 18:34 PM.
[x] E.Y. Global, “Chapter 3: Using purpose to enable success” in “Why business must harness the power of purpose” https://www.ey.com/en_uk/purpose/why-business-must-harness-the-power-of-purpose last accessed on 09/12/2022 at 18:34 PM.
[xi] Deloitte, “Becoming Irresistible: A new model for employee engagement” available at https://www2.deloitte.com/us/en/insights/deloitte-review/issue-16/employee-engagement-strategies.html last accessed on 10/12/2022 at 7:53 AM.
[xii] E.Y. Global, “Chapter 3: Using purpose to enable success” in “Why business must harness the power of purpose” https://www.ey.com/en_uk/purpose/why-business-must-harness-the-power-of-purpose last accessed on 09/12/2022 at 18:34 PM
[xiii] Imperative, 2019 Workforce Purpose Index Report, available at https://uploads-ssl.webflow.com/5bae27a3939555a4ddb8d2ca/62cd4081a5613c3c939c5917_Imperative%202019%20Workforce%20Purpose%20Index%204.21.32%20PM.pdf last accessed on 10/12/2022 at 7:45 AM.
[xiv] Cahners-Rabb Professor of Business Administration, Emeritus, at Harvard Business School.
[xv] Imperative, 2015 Workforce Purpose Index, available at https://cdn.imperative.com/media/public/Purpose_Index_2015 last accessed on 10/12/2022 at 07:37 AM.
[xvi] Imperative, 2016 Workforce Purpose Index Report, available at https://cdn.imperative.com/media/public/Global_Purpose_Index_2016.pdf last accessed on 10/12/2022 at 7:45 AM.
[xvii] Imperative, 2019 Workforce Purpose Index Report, available at https://uploads-ssl.webflow.com/5bae27a3939555a4ddb8d2ca/62cd4081a5613c3c939c5917_Imperative%202019%20Workforce%20Purpose%20Index%204.21.32%20PM.pdf last accessed on 10/12/2022 at 7:45 AM.
[xviii] Imperative, 2019 Workforce Purpose Index Report, available at https://uploads-ssl.webflow.com/5bae27a3939555a4ddb8d2ca/62cd4081a5613c3c939c5917_Imperative%202019%20Workforce%20Purpose%20Index%204.21.32%20PM.pdf last accessed on 10/12/2022 at 7:45 AM.
[xix] Imperative, 2019 Workforce Purpose Index Report, available at https://uploads-ssl.webflow.com/5bae27a3939555a4ddb8d2ca/62cd4081a5613c3c939c5917_Imperative%202019%20Workforce%20Purpose%20Index%204.21.32%20PM.pdf last accessed on 10/12/2022 at 7:45 AM.
[xx] Imperative, 2022 Workforce Purpose Index Report, available at https://uploads-ssl.webflow.com/5bae27a3939555a4ddb8d2ca/62cd40d1d8872c756f3d868b_Imperative_Workforce%20Purpose%20Index%202022.pdf last accessed on 10/12/2022 at 7:45 AM.
[xxi] Imperative, 2022 Workforce Purpose Index Report, available at https://uploads-ssl.webflow.com/5bae27a3939555a4ddb8d2ca/62cd40d1d8872c756f3d868b_Imperative_Workforce%20Purpose%20Index%202022.pdf last accessed on 10/12/2022 at 7:45 AM.
[xxii] E.Y. Romania, “Executives think their firms are truly purpose-driven, but their employees disagree. How should employers close the say-do gap?” available at https://www.ey.com/en_ro/purpose/is-your-purpose-lectured-or-lived last accessed on 10/12/2022 at 07:34 AM.
[xxiii] E.Y. Romania, “Executives think their firms are truly purpose-driven, but their employees disagree. How should employers close the say-do gap?” available at https://www.ey.com/en_ro/purpose/is-your-purpose-lectured-or-lived last accessed on 10/12/2022 at 07:34 AM.