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The purpose agenda

The numbers, research and wisdom underlying a sense of purpose.

By Stuart Crainer . 05 September 2011

The numbers, research and wisdom underlying a sense of purpose.


Thepurposeagenda


The Facts

 

  • Coherence
    A strong, strategically coherent and well communicated corporate purpose is associated with up to 17% better financial performance.
    IMD/Burson Marsteller Corporate Purpose Impact Study 2010
  • Behaviour
    Only 10% of managers take purposeful action — a powerful combination of energy and focus. Meanwhile, 30% of managers procrastinate, 20% show detached behaviour and 40% exhibit distracted behaviour.
    Sumantra Ghoshal and Heike Bruch
  • Leadership wisdom
    “Management was, is, and always will be the same thing: the art of getting things done.”
    Bob Eccles and Nitin Nohria, Beyond the Hype.
  • Strategy
    Only 40% of employees understand their organisation’s strategy.
    Accenture High Performance Workplace Study
  • Engagement
    88% of highly engaged employees believe they can positively impact the quality of their organisation’s products; only 38% of disengaged employees think so.
    Towers Perrin 2008
  • UK workers
    Only 4% of UK workers exhibit the highest level of engagement with their work.
    Corporate Leadership Council
  • On purpose
    “You cannot foster true innovation without engaged employees.”
    Julian Birkinshaw, MLab and London Business School
  • First principles
    “The purpose of business is to create a customer.”
    Peter Drucker
  • Purpose versus performance
    40% of a company’s reputation is determined by its purpose and 60% by performance.
    Burson Marsteller/Penn, Schoen & Berland, 2008
   

A sense of purpose is increasingly recognised as essential for business and personal success. But what does this really mean and what are the implications?


Stuart Crainer

When you walk into the offices of an organisation with a sense of purpose it is quickly apparent.There is an air of focused energy, a positive pulse of excitement and commitment. Individuals with a sense of purpose are similarly easy to identify.

The reverse is also sadly and commonly true. Drift and ennui are facts of life and corporate life.The 2009 MacLeod Report into employee engagement in the UK painted a depressing picture of extremely limited engagement levels offset by a small number of examples of enlightened and effective companies and leaders.

Purpose is elusive.This is perhaps because the word encompasses the very fundamentals of a business’ existence and raison d’être.

Purpose, defined by Douglas Ready and Emily Stecker Truelove in the article which follows as “the company’s reason for being; why it exists; its core mission as an enterprise”, embraces vision — where you would like to be; strategy — how you intend to get there; and ethics — the kind of behaviour and standards expected along the way. Purpose is the art and science of business distilled, a combination of intention, execution and aspiration.

“Corporate purpose goes well beyond corporate responsibility. It is part of a company’s DNA; it is the reason for the company’s existence,” says Jeremy Galbraith, CEO of Burson-Marsteller Europe, Middle East and Africa. “Companies that have a purpose deeply embedded into their overall corporate strategy — and one which is well communicated and understood both internally and externally — will have a significant competitive advantage. Communicating on corporate purpose is one of the key strategic tools for managers seeking to build trust and reputation with stakeholders.”

Nikos Mourkogiannis, author of Purpose:The Starting Point of Great Companies, says that successful companies define purpose in one of four ways:

Discovery. This type of purpose involves a love of the new and innovative, and it animates many technological businesses. Seeking the new, according to Mourkogiannis, does not mean constantly changing course.

Excellence. Excellent businesses prefer to turn away customers than compromise their quality standards.

Heroism. Think of Henry Ford’s creation of his world-changing motor company or Bill Gates’ Microsoft.

Altruism. This purpose could take the form of personal service beyond that normally expected, delivering products at affordable prices, or using technology and ideas to improve lives.

Purpose is something more than a vision. It must embrace the means — the strategy and behaviour required — as well as having the aspirational and motivational power of a vision.

In their book Built to Last, Jim Collins and Jerry Porras view the function of a leader as “to catalyse a clear and shared vision of the organisation and to secure commitment to and vigorous pursuit of that vision”.

Collins and Porras contend that vision has two main components: a guiding philosophy and a tangible image.The guiding philosophy is “a system of fundamental motivating assumptions, principles, values and tenets” that stems from the organisation’s core beliefs, values and purpose. Making up the tangible image are a mission and a vivid description.The mission is “a clear and compelling goal that serves to unify an organisation’s effort. An effective mission must stretch and challenge the organisation, yet be achievable”.

A sense of purpose embraces all of these elements. It must also be authentic, true to the people and the organisation involved.

“In today’s fiercely competitive, dynamic and often short-term obsessed economy, it can be quite easy for companies to operate without taking pause to reflect on why they’re in business in the first place. It happens all of the time, even at some highly regarded companies. But not all organisations work this way. In fact, for some companies, being clear about their core purpose — in short, why they exist — is essential not just for daily operations, but for future success,” argue Douglas Ready and Emily SteckerTruelove.Their research looks at what they call Purpose-Driven Enterprises (PDEs), organisations with this clarity of purpose.

In troubled and sceptical times, the companies they write about offer a compelling way forward.What is perhaps most striking is that they have managed to combine a passion for the future with a commitment to excellent execution. Purpose wins.

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