Companies solely focused on profits are paradoxically less likely to make more money. Organisations which have a clear and distinct purpose – a ‘why’ – to drive their decision-making have been proven to outperform.
Purpose is defined by the Harvard Business Review as an aspirational reason for being that inspires, provides a call to action to an organisation’s partners and stakeholders, and provides benefit to local and global society.
It can span from a company having a clear, positive rationale for its actions, through to a defined charitable goal for positive social impact. Purpose can also help bind all stakeholders of an organisation together by ensuring every individual – not only staff, but also investors, suppliers and even customers - knows how their work contributes to achieving that purpose. When everyone in an organisation knows what they are working towards and why, it is easier to innovate and drive transformational change effectively.
As part of our ongoing Zebra Project, we hosted an event to discuss the importance of purpose and how to make it the foundation of organisational success. Attendees shared their experiences of purpose, how to find and articulate your ‘why’, and how to balance the risks and opportunities of becoming truly purpose-driven:
Purpose as an agent of positive change
Just because your organisation functions effectively, that doesn’t necessarily mean it is purpose-driven. Simply hitting profit targets year after year might feel like success, but as an enterprise matures it can be important to redefine your role as a company. Businesses don’t always have to launch with a ‘why’, but as their experience of a sector grows, it can be fruitful to look beyond the bottom line.
Chris Willis Pickup, charities and social ventures partner at Taylor Vinters, highlights that purpose-driven organisations put people at the forefront, so are not just about commercial success.
“For some of our attendees, establishing a good work-life balance was at the heart of their company’s mission, he explained. “Purpose can also form the distinction between what makes your organisation a purely commercial venture or one that is charitable too.”
Speaking at the event, Owen Valentine Pringle, partner and co-founder of ARC pointed to the global campaign against plastic straws as an example of an initiative that exemplifies purpose.
“The campaign has done amazing work around the idea that this is something we can do to make a difference, and how we, as individuals, have the agency to make a change,” he said.
“However, it also exemplifies the way in which purpose can oversimplify a problem. Plastic straws only represent about 0.025% of the plastic in our oceans. The largest proportion is waste from fishing equipment and things that we as individuals don’t have a huge degree of influence over. So it’s important to recognise that there’s a flip side to purpose, particularly if it involves an idea that is easily saleable to the populous.”
Finding and articulating your purpose: Starting the process
Organisations that have an enduring purpose are often the most successful. There is intentionality in how they act, and positivity from how that manifests itself in business decisions. For example, how a business is run can attract like-minded clients and suppliers with the same ethos. Having a clearly defined intention will help shape a leadership team’s decisions too, particularly through times of change.
Sharing their tips on how to find a purpose, attendees suggested that founders should look at why you started your company and the things that you do well. Authenticity is vital: it’s important not to go out there simply with the mission of finding a popular purpose. Your ‘why’ should arise organically from the roots of what your company is, and does. Clarity is essential, so everyone can understand what you’re about, and apply this flexibly to everything you do.
For practical reasons, purpose should usually be led by your company’s senior team, but it’s important that your mission is something that engages everyone. If you want people to be invested in your company’s purpose, it needs to be collaborative – people should have a say in what it is. The responsibility of creating and bringing to life your ‘why’ rests with each employee and not just one particular individual or department.
Your organisation’s intentions also link to the treatment of staff. How will employees buy into the firm’s purpose if they’re treated badly, for instance? Compassionate leadership therefore has to be a key factor in the overall success of your purpose. By focusing on both people and profit, you’re more likely to see successful results.
Establishing an authentic purpose is about what you do, not just what you say you do, as highlighted by Quentin Millington, founder of Marble Brook during the Zebra discussion: “Purpose is about culture, how an organisation’s structure influences culture,” he said. “There’s an interplay between the two. Your intent influences your operation and your culture. That has to be the starting point for the CEO, the board, executives, everyone working in the organisation, plus suppliers.”
He continued: “That intent has to embrace everyone, and everyone has to engage in that intent to help it express itself through the business.”
Therefore, it’s essential to look at what kind of culture your business promotes now and whether this needs to change.
Integrating your purpose: How does it work?
It’s possible to look at the existing rituals of your company to define a new set of habits. Story-telling and training can be used as practical tools in the effective implementation of your company’s purpose. Personalising the motivations behind your mission, as it is presented to each individual, is an effective strategy. This way, individuals will be empowered to make the decision as to whether they’re in or out.
Morgan Kainth, strategy lead at Ethical Angel says that corporate social responsibility (CSR) can also drive your company’s purpose.
“Individual employees need to be brought into the purpose of your organisation and feel empowered to live that purpose, without needing to sacrifice too much,” she explained.
“Things like volunteering programmes, having a charity of the year and making donations are all well and good. However, our purpose is re-defining that relationship through empowering individual employees to volunteer either on pro bono basis or as additional outside of work hours stuff, where they get paid and still report on the benefits to the business.”
Voluntary charitable work has been shown to decrease staff turnover, which can ultimately save your company money on recruitment in the long term.
Of course, the short-term costs of implementing a purpose should be offset against the long-term gains. In the here and now it can be disruptive to profits, meaning the arguments for it need to be well-constructed and passionate when proposing the change to your board.
To integrate purpose, leaders also need to be susceptible to constructive criticism but also have the courage of their convictions to make changes. Having a balanced board with the desire to back the long-term aim of the company is vital.
Impact: How does purpose make a difference in the wider world?
Purpose is often measured in terms of the social impact it has and the good it does in the wider world. The UN’s Sustainable Development Goals can be used as a blueprint to help achieve a more sustainable future. They can be used as a metric to assess the impact of purpose and how it lands in a charitable organisation by defining the outcome of a transaction.
However, a positive social purpose doesn’t necessarily have to be purely charitable in its aims. For example, if your business aims to make people feel good about themselves, or improve their lives in some way, this can also be considered a positive social outcome.
Endomag for example, is a medical device company which has a mission to provide the best standard of care for everyone, everywhere.
CEO, Dr Eric Mayes, explains that the company has used this purpose to inform its business decisions.
He said: “In practical terms, we develop devices that help surgeons involved in cancer surgery to find the tissue they’re looking for, so they can minimise the amount of tissue taken out, improving the patient experience and resulting in better clinical outcomes.
“Over time we recognised that our business driver was to make this standard of care available in more places to increase the market size, but that at the same time, we could do that in a way which would optimise pricing, so patients wouldn’t have to travel to other hospitals, decreasing overall costs and widening our scope.”
When considering the difference your purpose makes in the wider world, it’s important to remember that you’re on a long-term journey. As a result, the outcome can take a long time to measure and the results may not be immediately obvious.
Speaking from experience, Owen Valentine Pringle added: “Having been in the belly of a large NGO beast, one of the things we heard from beneficiaries is that it’s sometimes a luxury to talk about purpose and intent, when impact is what they want.”
“What kept coming back is the idea that people in need simply want us to get the job done. That calls into question whether motive matters, as long as the objectives are aligned and fulfilled.”
Certified B Corporations (B Corps) are a new kind of business that balance purpose and profit. They are legally called upon to consider the impact of their decisions on workers, customers, suppliers, community and environment. The various assessments involved in the process to become a certified B Corp opens a company’s eyes to the numerous areas to bear in mind.
What are the risks involved in establishing your purpose?
Your company’s purpose can be backed by great principles. However, Chris Willis Pickup questioned whether marketing yourself as purpose driven, can increase risk.
“If you’ve said you’re going to have this purpose and then you’re seen to betray it in some way, I think you can be in a worse position than the commercial business who is just making profit,” he warned.
“You’ve held yourself to a different standard and people hold you to that, too – even if it’s a different standard to the one they’re applying to everyone else.”
The level of risk also depends on the message you’re putting out there. Marketing your brand means you’re making a promise and setting an expectation about what you can deliver. If you market this promise before you’re able to deliver, you open yourself up to risk. Culture and behaviour should form the start of your organisation’s purpose.