How finding a company’s purpose can unleash potential

KEY TAKEAWAYS

A business with purpose drives growth and employee retention by promoting a culture where all stakeholders feel invested in the company.

• Purposeful organisations have better employee engagement, leading to improved customer satisfaction levels.
• Purpose helps to move leadership away from a transactional view of employee engagement.
• Purpose must be real, credible and believed in on its own merits.
• The key behind purpose is communicating it to employees and clients.
• Strong cultures help individuals perform better as they feel encouraged and inspired to achieve more.

The key to having an organisational purpose is communicating it to employees, and vitally, to your client base. Customers are a huge key driver of the why behind purpose, and the growth of a purposeful organisation often outstrips a mission-based one.

Research shows that this difference in growth can be stark, up to 28 times the level of national economic growth.

Becoming more purpose-led means examining commercial mission and thinking deeply about how it meaningfully relates to customers. What does it mean for them to be the drivers of company revenue? How do its products or services fill a gap in their lives? Will they emotionally connect to the corporate mission statement?

“If you have a strong company culture, in turn you’ll have a team of better engaged individuals,” explains Gary James, Chief Operating Officer of PageGroup. “They will feel encouraged and inspired to want to work and achieve more in that environment.”

Purpose, then, is crucial for winning and retaining both customers and talent today. How can business get to that strong culture, where employees, leaders and customers understand the purpose behind the company?

If you have a strong company culture, in turn you’ll have a team of better engaged individuals. They will feel encouraged and inspired to want to work and achieve more in that environment.

The Purpose Behind Growth and Retention

There is a growing expectation for companies to measure success beyond financial results. Some 87% of consumers believe companies perform best over time when their purpose goes beyond profit. As EY’s study Winning with Purpose explains, the benefits of a purpose-driven culture are very visible, and tangible, for leaders and the bottom line:

“Organisations that embody purpose see significant, measurable results. They get and keep the best employees (1.4 x more engaged, 1.7 x more satisfied, 3 x more likely to stay). They attract, retain and engage customers (72% of global consumers would recommend a company with a purpose, a 39% increase from 2008). And they increase returns for shareholders (purpose-led companies outperformed the S&P 500 by 10 x between 1996 and 2011).”

The value of purpose to the bottom line is even more apparent when we look at revenue growth over the past three years. As EY highlights, 64% of the top performing organisations grew by 10-30%, compared with the lower performing ones, where 24% experienced revenue decline in the same period.

Further evidence comes from the EY survey: 81% of top performers have seen improvements, with 67% receiving a boost to employee engagement, compared with 41% of lower performers, who improved customer satisfaction (and just 37% increased employee engagement).

More Than Just a Buzzword

To work together well, teams need to buy into the same principles: “Just like any pursuit, you can’t succeed in business without clear direction and a plan. The same applies to managing your people,” notes Greg Tadman, PageGroup’s Regional Human Resources Director, Asia Pacific.

You can’t succeed in business without clear direction and a plan. The same applies to managing your people. Get it right and your talent will understand that your company supports their ambitions.

He notes that while purpose could sound like a buzzword, it is fundamentally important to building successful teams.

“Get it right and your talent will understand that your company supports their ambitions, they’ll go into battle for you,” he says.

And if they get it wrong?

“Put it this way,” Tadman says. “When groups turn toxic, they can lose their employee branding and buy-in frighteningly fast.”

Patagonia, an American outdoor clothing company, is a global leader in terms of purposeful business culture. Its product lines, supply chain, even the pricing of its products are aligned with its sense of purpose, driven by CEO Yvon Chouinard to: “cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

One example of this purpose in action, of changing to organic cotton in their clothing lines, raised the prices of products as well as requiring new sourcing and supply-chain solutions. However, the reasons behind the move were clear to the firm’s employees and customers, and Patagonia is thriving because of this focus on their overall business and not simply the bottom line.

The most important lesson for executives here is twofold: authenticity and communication. Purpose cannot be confected. It must be real, credible and sincerely believed on its own merits: not merely a cynical ploy to convince customers and employees that the company is worth investing their money and energy in.

As long as it is authentic, purpose must be communicated passionately to all audiences, internal and external, consistently, clearly and continually. It should be the starting point for every decision, investment, marketing campaign and corporate action.

Leadership is Listening

The purpose of leadership goes beyond setting your teams up for battle. Companies are judged on what they’re actually fighting for.

Gina Hayden, a leadership trainer and author of Becoming a Conscious Leader: How to Lead Successfully in a World That’s Woken Up, explains that today’s successful leaders mine inputs very differently than in the past: “I think it’s important not just to look at customers, but at the information or data points of all parts of the system, including internally.”

Moving the focus away from the bottom line and towards the purpose of a business can seem like a leap of faith for leaders, who understandably have an economic view of their company and strategy. In Creating a Purpose-Driven Organization, Robert E. Quinn and Anjan V. Thakor use the example of American energy company DTE Energy President Gerry Anderson. DTE had a mission – to create long-term gains for shareholders – but no purpose for its workers or customers.

Then the financial crisis of 2008 hit. Anderson knew he needed to get more from employees and customer base. The crisis highlighted a painful point about the business – employees were not engaged, were stuck in behaviours, lacked creativity and were not reaching their potential. A DTE board member, Joe Robles (also CEO of USAA), explained that Anderson’s most important job was “to connect people to their purpose.”

The company leadership supported the new culture through improved onboarding and training programmes that talked about the purpose behind their work (keeping the world moving, keeping the lights on). They held town-hall meetings, and created culture-building activities, such as sing-alongs, and it worked. Employee engagement scores rose. DTE won a Gallup Great Workplace Award five years in a row. And financial performance skyrocketed, with the company’s stock price tripling from year-end 2008 to year-end 2017. What did DTE and Anderson do so well? They overcame the biggest barrier to welcoming purpose into a business: they forgot the transactional view of employee engagement (money as the driver).

Talent Follows Purpose

The immediacy of peer reviews available online means that talent today gets more of a say than ever in where they go next and the kind of company to which they’d like to belong (rather than merely be employed by). Thanks to Glassdoor, we can see inside companies, get a sense of their purpose and values, and assess what our own leaders might be doing right or wrong.

Jon Goldstein, Regional Director of Southeast Asia and India, Page Executive, follows the competition for C-level talent every day. He says a purpose-led culture is ignored today at a company’s peril: “It might not sound like a major factor to many leaders, but you do see the difference for top candidates. In sectors where certain talent profiles are in red-hot demand, having a demonstrable purpose-driven culture can be the difference between success or failure. Where brand used to be king, today culture rules.”

In sectors where certain profiles are in demand, having a demonstrable purpose-driven culture can be the difference between success and failure. Where brand used to be king, today culture rules.

KEY TAKEAWAYS

A business with purpose drives growth and employee retention by promoting a culture where all stakeholders feel invested in the company.

• Purposeful organisations have better employee engagement, leading to improved customer satisfaction levels.
• Purpose helps to move leadership away from a transactional view of employee engagement.
• Purpose must be real, credible and believed in on its own merits.
• The key behind purpose is communicating it to employees and clients.
• Strong cultures help individuals perform better as they feel encouraged and inspired to achieve more.

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