Why purpose lies at the heart of corporate resilience

February 18, 2023
Why purpose lies at the heart of corporate resilience
Corporate resilience is at the top of agendas right now in most large organisations. Google it and you get 72 million results.

And no wonder. We’ve seen plenty of big organisations in recent years brought to the brink – or over it – by a derisory response to a crisis.

“The world is getting riskier” says PwC. “Organisations are increasingly vulnerable as business becomes more complex, virtual and interdependent. Building and sustaining a resilient business is a commercial imperative.”

And yet an HBR study of 500 $1bn-plus companies found only 12% consider their culture of resilience to be successful.

And, make no mistake, this is an issue of culture not process. According to Forbes, the key things that derail resilience in the businesses they studied were all cultural; rigidity of hierarchy, lack of clarity, conflicting objectives with no clear prioritisation, and poor care of people.

We need a cultural answer to a cultural problem.

Which is where purpose comes in. We know pretty unequivocally that a clear and authentic purpose, at the heart of strategy and the lived experience of employees, resolves a lot of the problem of poor resilience. Please note, the operative words in that sentence are ‘authentic’ and ‘lived’. This is not about ‘having’ a purpose. In our research into companies globally it’s clear that companies can have a very high purpose recognition and still leave employees entirely untouched in how they feel and behave. Truly purposeful companies, in which purpose is engaged in driving strategy and supporting human performance, show a boots-and-all commitment so that purpose is truly alive in the experience of everyone in the business.

We don’t just know that purpose solves the problem. We know why. Our research shows that genuinely purposeful companies seem to have three key attributes embedded in their cultures that turn out to be critical in a crisis.

Trust, ownership and clarity are key

Firstly, they have built an environment of trust and compassion. That allows people to act for the good of the company in a crisis and not to protect their position because they do not fear sanction and blame. In all the companies we have measured, a massive difference in measured trust is one of the key differentiators between a company where purpose is truly alive, against one where it is simply stated.

Secondly, these companies exhibit a culture of ownership and responsibility that makes people, at every level, care enough to act and not wait to be told. Emotional ownership appears to have a direct impact on both engagement (do I care?) and autonomy (enough to do something about it myself).

And third, they have in their purpose a clear context for decision-making that cuts through confusion, establishes priorities and guides these actions with laser-clarity and with real velocity.

The easiest thing to feel ownership of is a purpose to be proud of.

And critically, these cultural factors appear to work together. I’m clear about why we do what we do, I’m proud of it and feel responsible for its success, and I’m not afraid to act on it. Looking at that Forbes list again, the complete opposite, in fact, of rigidity of hierarchy, lack of clarity, conflicting objectives, and poor care of people.

Who’s on your side?

And there’s one more thing. Authentically purposeful companies bounce back quicker from cock-up because the world is on their side; whether that’s customers, commentators or regulators. Think Nike. Think Southwest Airlines. There’s some brilliant examples of this in Lisa MacCallum’s great book Inspired Inc.

Purpose is not a statement. It’s a living culture based on clarity, trust and ownership. Failure to establish these cultural structures around your purpose pretty much guarantees that when crisis calls, which it inevitably will, it’s going to be extremely expensive. And horribly painful.
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