The PURPOSE GAP

In the previous article (Too good to be true?) I articulated our belief that the shift from profit-led to purpose-led thinking has the potential to change the world. We believe it has the power to shift the business paradigm from one in which 60% of employees actively hate their jobs to one in which it’s the norm for people to be proud and energised by their workplace; where young talent seeks out big companies instead of actively shunning them. 

[pullquote]”Only 20% of young people today wanting to work for a big company”

Deloitte[/pullquote]

It’s fantastically exciting to see so many huge organisations actively focussed on Purpose. Yet in most corporate organisations, purpose is just not working.  There is a gaping chasm between the purpose articulated by the Board and the reality experienced by the people in the organisation. And if that gap is not bridged, purpose will die, the nay-sayers and cynics will win and a once in a generation opportunity will be lost.

Yet there are organisations where this gap does not exist. It’s easy to see in small, agile, exponentially-growing entrepreneurial companies where the purpose runs through the company like a stick of rock. It’s easy to say this is because they are small or new or exciting (and there is much in that argument) but ‘purpose-led, entrepreneurial thinking’ is not driven by scale or chronology but by an attitude of mind. Would it not be more intelligent to try and identify the beliefs and behaviours that these companies exemplify and see what can be copied?

There are a small but growing list of global organisations that have done just that. These global businesses share a lot of these entrepreneurial attitudes to purpose-engagement. Yet, Apple is not small, REI is not new and Unilever is hardly exciting.

Our experience of these agile and purpose-led businesses reveals a clearly defined list of cultural beliefs and behaviours that are the secret to bridging the gap.

Inspiring leadership helps.  Purpose must be inspiringly and credibly led.  But what the business believes about itself and how it behaves are more important.

[pullquote]Without the beliefs of trust, ownership and context to bridge that gap, muddle, distrust and cynicism will persevere and Purpose will not take root[/pullquote]

The first belief we observe in all organisations that genuinely engage purpose at every level is an absolute commitment to TRUST. Without trust in every vertical and lateral relationship, purpose will not flow through into an agile culture of openness, empathy and innovation. Cultural Competence will not exist.

The second belief pattern is around OWNERSHIP. Unless all the players in the organisation feel – and feel allowed to feel – a powerful sense of ownership of the business and its purpose, it will not flow through into staff behaviours of alignment, engagement and autonomy. Without ownership Staff Competence is weak and customer value compromised.

The final belief drives how effectively decisions are made and strategies implemented. This organisational language we call Context allows for the organisational Purpose to flow through into creating Management Competencies of agility, clarity and velocity.

It’s easy to agree that Purpose is a good thing for organisations big and small.  It’s easy to identify the behaviours of aligned and engaged staff, open and innovative cultures and agile and clear-headed management that we would all love to see in our organisations.  The problem is the gap between the two. Without the beliefs of trust, ownership and context to bridge that gap, muddle, distrust and cynicism will persevere and Purpose will not take root. And that really will be a tragedy.

 


THREE THINGS PURPOSE IS… AND THREE THINGS IT’S NOT

It is wonderful to see leading corporate advisors like Deloitte, KPMG and EY embrace the power of purpose and compassionate business, and it makes it more important for us to get a clear idea of what purpose actually is and what it isn’t.  Graham Massey’s article for SALT magazine is a great illustration of some of the differences.  We particularly like the fact that he has highlighted how purpose links with commercial performance.

You can read the whole article here and a summary is below.

 

Purpose is more than ambition or mission

Doubling the size of your business is an ambition. “Making sustainable living commonplace” is a purpose. Firms like Patagonia and Tesla have all shown that having a purpose that connects to a greater good goes hand-in-hand with growth and commercial success.

Purpose is more than CSR

CSR is great for establishing “basic hygiene, but purpose goes further. With CSR, companies do good as an add-on to their usual activities. Purpose means putting positive change at the heart of your products, services and strategy.

Purpose is more than environmental sustainability

Purpose gives us permission to think even bigger. Recent events in Paris – negative and positive – offer us a moment to step back and think about all of the major global challenges we face.

[pullquote]Purpose comes from the sweet spot where your love and passion, your skill and the zeitgeist overlap.

David Hieatt – Do Purpose [/pullquote]

Purpose IS a growth strategy

A clear sense of purpose will guide you into new markets, new products and towards new customers and partners. The evidence from brands such as Ben & Jerry’s and Dove shows that purpose-led brands outperform.

Purpose IS a purchase trigger

Purpose inspires customers. As the business thinker Simon Sinek says, “people don’t buy what you do, they buy why you do it”.

[pullquote]A 2012 Edelman survey revealed that over half of consumers will pick the purposeful brand when price and quality are the same.[/pullquote]

Purpose IS an investment driver

The evidence shows that having a clearly communicated sense of purpose driving your business at its core will build confidence, drive business investment and attract new investors, and purpose can also help you find new sources of investment.

 

Get your purpose clear, and it will act as both your engine and your compass. Can you afford not to build your business on purpose?

Graham Massey is the business head of The House, a consultancy that believes valuable businesses are born out of purpose.


The best FIVE articles for purpose-led leaders in 2016

1. Fast Company: The world’s 50 most innovative companies of 2015

With relief, we see Apple doesn’t not occupy the top spot, though it does make number two – and with good reason. Start up and tech friendly services Slack and WeWork both make the top 15. More interestingly, a click through on to any of the listed companies reveals genuinely helpful stories about their road to success plus visuals, videos and positioning statements. From cool facts about Tesla to Virgin America’s flight safety video that went viral on YouTube, this is great source of treasure for leaders seeking external inspiration.

2. EY Voice: The power of purpose-led transformation

Businesses have been transforming themselves for generations. When is this positive – rather than a negative cost-cutting exercise? And is ‘why’ the word that makes all the difference?

Valerie Keller, Executive Director, Strategy, and Global Leader of the EY Beacon Institute looks at the history of business transformation and argues that purpose-led transformation is unique and therefore more effective than the pursuit of profit, given that it establishes a clear reason for firms to exist.Profit-centric business models are primarily concerned with what companies do and how they do it. Contrast this with purpose-centric business models which start by defining why the company exists. They address the ‘why’ first – and the ‘what’ and ‘how’ afterwards.Unilever is a great example of a large corporate that has maintained its focus on purpose-led growth over the past 125 years. Today it has literally millions of people keen to join the organisation. These people want to improve others’ lives as opposed to simply adding to Unilever’s bottom line.

 

3. Transform Magazine: The journey to build corporate purpose

The employer/employee contract has changed. It’s on an equal footing. Employees are looking for far more than the ‘hard’ benefits of reward, recognition and career development. They want to work for a company which stands for something that matters to them – and where that is manifested across the entire customer and employee experience. Time for big companies to get serious about purpose. “The process is not hard, but it is deep and requires commitment. The journey is not arduous, but it is continuous.”

 

4. Harvard Business Review: From purpose to impact 

Purpose is increasingly being touted as the key to navigating the complex, volatile, ambiguous world we face today, where strategy is ever changing and few decisions are obviously right or wrong.

While leaders may be able to clearly articulate their organisation’s mission, fewer than 20% of them have a strong sense of their own individual purpose. Even fewer can distill their purpose into a concrete statement.  Yet at the same time leaders say that understanding their purpose is the key to accelerating their growth and deepening their impact, in both their professional and personal lives.

The process of articulating your purpose and finding the courage to live it—what the authors call purpose to impact—is the single most important developmental task a leader can undertake and they share their  step-by-step framework to help executives find and define their leadership purpose and put it to use.

 

5. Nielsen: Breakthrough Innovation Report June 2015

This extensive Report sets out to explain what makes for truly successful innovation both through an examination of the theory and analysis of seven winning innovations of the year. In doing so the Repot seeks to address two key questions: how do I launch the next breakthrough success in my organization? And how can I improve our overall innovation performance from slow, expensive, and inconsistent to fast, resource-efficient, and consistently successful?

At 53 pages it’s quite a read but well worth dipping into for some challenging and interesting perspectives on how we can all transform the speed and success of innovation.

At the heart of Nielsen’s view of what makes for successful innovation is the Jobs Theory which essentially holds that what causes a person to consume a particular product in a given situation is not the intrinsic qualities of the product but rather the progress the person is trying to make in that particular circumstance.

People don’t so much buy products, as hire them to perform jobs in their lives. Consumers pull brands into their lives to address circumstances in which they need some help to resolve a struggle or fulfill an aspiration—to make progress.

Consequently, successful innovation should focus not on the consumer nor on the product, but rather on the circumstance. Successful innovations perform jobs that formerly had only inadequate or nonexistent solutions. Innovations that resolve well-defined yet poorly performed jobs succeed.

The report contends that most managers look at the world and see consumption, but innovators look out and see non-consumption and compromises. It challenges us to ask where we can find non-consumption and compensating behaviours in our own customers’ lives.


Why purpose matters to marketers

Purpose is everywhere at the moment.  Is this just faddishness, a fashionable re-branding of CSR and Mission statements? Or does Purpose embody a vital need for businesses to deliver more than just profit? Does Purpose deliver an exciting opportunity for companies to act, as their Victorian forebears did, as “societies within Society itself”?

Paul Twivy’s recent article is a long read but you can see the whole thing here if you’ve got 15-20 minutes spare.  Otherwise, the key points are summarised below:

  • Purpose is the ultimate end-benefit, and best long-term selling-point, of the products and services marketers sell.  ICI’s “responsible application of chemistry” produced Perspex, Dulux paints, Terylene, Crimplene and Tamoxifen.
  • Marketers that harness Purpose can grab consumers’ attention against the odds – many products and services are of low-interest, even dull. Yet, their end purpose rarely will be.
  • Purpose can differentiate you more effectively and less expensively than expensive, time-consuming and open to quick copying innovation. [pullquote]Google’s purpose “to organise the world’s information and make it universally accessible and useful” is the generic benefit of a good search engine writ large. Google’s constant purpose is made eye-catching and agile by their marketing and their marketing is given a spine by their purpose.[/pullquote]
  • Boards and CEO’s are increasingly turning their attention to Purpose. Currently only a quarter of Marketing Directors sit on the board, so a  focus on the shaping and expressing Purpose will move them closer to the Board.
  • Marketing your higher-order purpose will give you a deposit account of brand trust for the times when the current account of product delivery fails or to preserve your brand distinctiveness after a change of ownership. How else has Innocent preserved its particular brand of innocence post the Coca-Cola sale? Ditto Ben and Jerry’s eccentricity and Unilever.
  • Core Purposes need Good Marketers, as much as vice versa, because Good Marketers possess and/or co-ordinate the best communication skills. Purpose should provide the active framework for product innovation, HR policies, choice of business partners, conditions in the supply chain, use of raw materials and much else besides. Yet all these elements of Purpose will only become apparent and inspire people if they are brought alive by the best marketing, internally and externally.

Why purpose-led transformation trumps a drive for performance

Valerie Keller, Executive Director, Strategy, and Global Leader of the EY Beacon Institute looks at the history of business transformation and argues that purpose-led transformation is unique and therefore more effective than the pursuit of profit, given that it establishes a clear reason for firms to exist.

Profit-centric business models are primarily concerned with what companies do and how they do it. Contrast this with purpose-centric business models which start by defining why the company exists. They address the ‘why’ first – and the ‘what’ and ‘how’ afterwards.

Unilever is a great example of a large corporate that has maintained its focus on purpose-led growth over the past 125 years. Today it has literally millions of people keen to join the organisation. These people want to improve others’ lives as opposed to simply adding to Unilever’s bottom line.