By Janine Buis
The Power of Purpose
The word ‘purpose’ is increasingly been working its way into the business vocabulary. Making money is key to surviving and thriving and creating shareholder value. Once only used in the context of individuals finding meaning in their lives. So why all the attention in the enterprise? What is the purpose of ‘purpose’ in business?
Purpose is all about “why.” Your purpose defined why your company exists beyond making a profit. It articulates the difference that you are trying to make in the lives of your customers. Companies are expanding their concept of purpose to consider not just the impact on their customers and shareholders, but the impact they have on their employees, communities, and the world at large.
The Business Roundtable, an association of CEOs of leading companies in the country, just updated their Statement on the Purpose of the Corporation recognizing the commitment of companies to benefit all stakeholders – customers, employees, suppliers, communities as well as shareholders.
According to PWC survey 79% of business leaders believe that purpose is central to business success and to an organization’s existence.[i] Deloitte’s 2014 Core Beliefs and Purpose Survey results showed that respondents from companies with a strong sense of purpose are more likely to say their organizations recorded positive growth and outgrew their competitors, and also are more optimistic about their organizations’ prospects.[ii]
Purpose influences every aspect of your business. It determines not just what you do, but how you grow your business. It impacts your relationship with all your stakeholders.
Activating Your Purpose
While there is growing recognition of the importance of purpose, only 46% of the executives in the recent HBR survey said their company had a strong sense of purpose.[vi] Having a bold purpose is just the beginning. Having a great purpose is no guarantee of success. Once defined, the purpose must be communicated, activated and integrated into every aspect of the business – from strategy to decision making, to on-boarding, recognition and performance management. It must become a constant North Star to guide the organization. Yet, PWC research found that only 34% of business leaders agree that purpose is a guidepost for leadership decision-making.[vii]
Ultimately, it is actions, not words that demonstrate the power of purpose. Is your organization fully leveraging the power of purpose to drive results?
Download the Business Roundtable Statement on the Purpose of a Corporation here.
[ii] Deloitte, “Culture of Purpose – Building business confidence; driving growth. 2014 Core Beliefs & Culture Survey”, pages 5 and 6
[iii] PWC, “19th Annual Global CEO Survey”, 2016, pg14
[iv] Harvard Business, “The Business Case for Purpose”, Analytic Services Report, sponsored by EY[v] Ibid [vi] Ibid [vii] Putting Purpose to Work: A study of purpose in the workplace