May 27th, 2016
The situation was also improved when organisations had balanced the interests of all stakeholder groups, including investors and owners. Moreover, there is clear evidence that organisations with a sense of purpose outperform those where purpose does not permeate throughout. This outperformance is in terms of employee satisfaction and engagement indicators as well as financial and service delivery.
So for me the formula is simple:
Alignment = strength and focus = energy reinforced consistently = results and success
It seems to make sense, then, to articulate the purpose of our organisation. But if we really want to inspire energy and maximum performance, we have to craft our statement in a way that will touch the hearts of the people we most need to motivate.
What is Purpose?
Purposeful people are easy to spot. They seem energised, focused and attentive. At the same time they exude an air of confidence, being less affected by the trivia that gets those who are less purposeful down. And the same is true of an organisation: its purpose is both its very reason for its existence and that imponderable ‘something’ that inspires resolve and determination from its people.
Purpose is a powerful strategic anchor. Compared with other aspects of strategy, including the corporate vision, purpose is relatively stable. Its essence may shift a little and, as such, should be kept under strategic review but, for most organisations, the purpose may change little for many years.
But that’s not to say that it is set in stone. Purpose is context-driven. This is vitally important. As human beings, we move in numerous contexts and so have numerous purposes – bringing up children; being a partner, friend or colleague; serving our organisation and profession; and so on. Some of these purposes will come and go and some may be with us for most of our lives.
Even within the relative constant of our organisation, our context may shift. As the market changes, our purpose may change. One of my clients began life making bicycles in the 19th century. It now makes ducting for nuclear power installations. Another started as a coal merchant and transitioned into international removals and storage.
And as well as being context-driven, purpose is also stakeholder-driven – it changes depending on whose eyes we are looking through. For example, customers may see the purpose of the organisation being about the provision of excellent services; owners, investors and shareholders about maximising their investments; staff about earning a wage to provide for their families and having meaningful work to do that inspires them; and communities about providing all the above in such a manner as to maximise positive impact and minimise negative impact.
This means that we need to strike a balance. Neglecting one stakeholder at the expense of another puts the organisation at risk. We only have to look at the demise this century of the many organisations that placed undue emphasis on shareholder profit or directors’ bonuses at the expense of the needs of other stakeholders, especially those of their customers.
So while we need to consider all stakeholder needs – and doing so represents a fantastic opportunity to grow an understanding between us and them – we still need to ask ourselves this: ‘What is our primary reason for existence? What are we fundamentally here to do?’
For most organisations, the answer is likely to be about providing a specific service or set of services for a particular customer base in a cost-effective way. The reason that this purpose may well be the primary purpose is that all other purposes hang off this one. Without this purpose, there is no employment for our staff and no return on our investment. It is therefore likely to be a statement that all parties can sign on to and be proud of.
Crafting (I use the word deliberately) the declared purpose of our organisation is a real art and worthy of our time and energy. We should bear in mind that our espoused purpose will have a significant impact on performance. In other words, as far as our businesses are concerned, it is probably the most important sentence or paragraph that we will ever write.
Clive Wilson is an author and a board director at Primeast, a consultancy that has been promoting purposeful leadership since 1987. He is a facilitator and executive coach and happy to engage audiences on the subjects of purposeful leadership and sustainable development. This extract from his book Designing the Purposeful Organization is ©2015 and reproduced with permission from Kogan Page Ltd. You can get a 20% off the book at www.koganpage.com using the discount code HRDPOS
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