Disruptive forces and changing consumer expectations are challenging organisations, making it imperative for them to become context-driven and purposeful. A new generation of employees, searching for meaning in their work, is encouraging a wider debate about the responsibility of business in society. Recent studies show a high level of consensus among executives that purpose matters. On the other hand, only a minority of companies seems to utilise purpose systematically as a driver for future-fitness and value creation. The reasons for this considerable gap are complex and vary. At SGA, we help executives to define and/or activate purpose at all levels in the organisation.
The state of the debate on purpose in business
Initial thoughts on why businesses should become purposeful were brought up by leading human resources experts. They implemented purpose as a lever to create teamwork and connect employees to what they do on an emotional level. Today, organisations strive to become purposeful based on a bigger picture. They embrace purpose to guide the organisation’s positive value creation in a broader context. And beyond connecting personal and company ambitions, they connect with society and the environment.
Context-driven and purposeful organisations, interconnected with the economy, society and the environment
© Sustainable Growth Associates GmbH
Creating a purpose statement is just the first step in becoming a purposeful organisation. Purpose definitely needs a framework to be activated. Only then is purpose able to guide decision-making in the long-term, creating commitment and meaning. Activated at all levels in the organisation, purpose can become a driver of lasting positive change. In many projects, we have experienced that it works:
- Organisations that embody purpose see significant, measureable results.
- Purpose is a key differentiator in guiding, defining and measuring business success.
- Purpose is a guiding compass to help determine programmes and processes.
Purpose from different angles
The customer’s view: 89% of clients believe a purposeful company will deliver the highest quality of products and services; for 87% companies perform best over time if their purpose goes beyond profit; 80% want a company to take actions that both increase profits and improve social conditions.
The employee’s view: Sharing the company’s purpose leads to significantly higher engagement. Employees driven by purpose are 1.7 times more satisfied and 3 times more likely to stay.
The shareholder’s view: Purposeful companies and meaningful brands enjoy higher growth rates and higher levels of success in transformation and innovation initiatives.
The systems view: Purposeful organisations have a clear reason for being. We know what they stand for within a broader, human context, beyond business metrics.
Creating purpose based on the systems view
The basic prerequisite for the unfolding of purpose is identifying the essence of the company’s existence, together with an envisioned future within the system’s boundaries. The process starts from the inside out, with the board or a leadership team asking: “Why do we do what we do?” In our projects, we build relatively small core teams, letting them start with concrete tasks: 1. Value mapping including internal and contextual assessments. 2. Developing an in-depth understanding of the organisation from various perspectives, involving stakeholders and experts. 3. Deriving and disclosing key insights, addressing even unpleasant truths if necessary. This deserves capable leaders who can release tensions and resolve conflicts, acting responsibly to sustain the momentum of change.
Bridging the gap between aspiration and the activation of purpose
Organisations need to bring their purpose statement to life by placing it at the heart of their business strategies and processes. At SGA, we have designed various programmes to support our clients in integrating their purpose as a guiding light for short- and long-term decision-making within every function of the organisation. This includes: strategy development, product and service development, business model, operating model, talent and employee management, innovation and new business development, supply chain management, customer and other stakeholders’ engagement, and the strategic allocation of financial capital.
© Sustainable Growth Associates GmbH
Overall business performance improves significantly when leaders and employees know WHY they are doing their job. Positive effects are further enhanced when people know HOW their job contributes to the overall purpose and the corresponding strategic goals. Therefore, integrated performance management is required. It ensures that employees and key stakeholders are aligned with the business as it moves forward, with the right people in the right roles, doing the right tasks at the right time, developing their skills in line with business needs. Currently, many companies undertake performance management improvement programmes to drive operational efficiency and link value creation to process development. At SGA, we focus on methods and tools that are easy to use, while at the same time reporting continuously on progress.
The benefits of purpose unfold in action
Leaders of the best purpose-driven and purposeful companies are champions in letting purpose inform their daily and long-term decisions. This kind of leadership behaviour involves their operational web and their employees, creating a purposeful DNA and culture. SGA’s transformation solutions and services are inspired by best practice. Our clients who have anchored their purpose in governance, leadership, processes, products and services enjoy strategic alignment and progress towards their vision. Purpose is their lens for seeing the whole picture. Very often, we have experienced that purpose channels innovation initiatives and opens up creative horizons. Purpose differentiates, because an inspired and empowered organisation drives positive interactions with stakeholders, creating a cycle in which living the purpose creates sustainable value, growth and trust among all stakeholders. Purpose is a force for and, at the same time, a response to transformation. At SGA, we focus on “purpose in action”, motivating people through meaning, not fear.
To find out more, please get in touch with us.