What does it take to make purpose really matter – for your organization, and for its multiple stakeholders?
What does it take to make purpose really matter – for your organization, and for its multiple stakeholders? Recent critiques of the movement towards organizational purpose (This piece in Forbes warns of ‘five deadly brand purpose sins’, while a Fast Company article even suggests ‘brand purpose is a lie’) serve not only to illustrate how mainstream the purpose conversation has become, but also how challenging it is for organizations to deliver on the promises of purpose.
First, a brief definition and introduction: purpose describes the difference an organization is trying to make in the world. Purpose is not a thing in and of itself, but rather a unique manifestation of an organization’s reason for being. By articulating a purpose statement, leaders try to capture the essence of the organization that may not always have been identified or acknowledged. Through the purpose statement, they may also try to raise aspirations for their organization. Great purposes are ambitious, mobilizing, differentiating, and provide clear direction. When a purpose statement meets these tests, and is effectively brought to life in the organization, a broad range of benefits have been shown to follow. Among other things, organizations find they are able to get and keep the best employees; attract, retain and engage customers; and create significant long-term value. They also make a step-change in the positive impact they have on the wider world.
Given these advantages, it’s no surprise that many businesses have jumped on the purpose bandwagon. Surveying the landscape, however, it’s clear that a large proportion have chosen to approach purpose as a marketing strategy rather than a business one. At BRIDGE, we call this ‘purpose washing’, and it’s disturbingly prevalent today. But we also see numerous examples of businesses with genuine intentions, who struggle to promote purpose as a strategic business priority, rather than as a nice-to-have corporate accessory. For these businesses, despite well-crafted purpose statements, and compelling launch campaigns for internal and external stakeholders, the many benefits of purpose remain elusive.
In many ways, articulating and launching a purpose for your organization is the easy part. The challenge comes when good intentions meet the complex, messy, competing-priorities reality of organizational life. The result, too often, is that the purpose becomes marginalized, seen as the domain of Corporate Affairs, Sustainability, or Human Resources. Business leaders, responsible for delivering against challenging short-term targets, struggle to make the time to see the relevance of the purpose for their daily work. They don’t see the purpose as meaningful, because it doesn’t yet influence the big strategic decisions they are called to make, and they haven’t yet embedded it in the organization’s culture. And as a result, they quickly come to doubt its credibility. They feel that the organization is not fully committed to the purpose, and this drives a ‘seen it all before’ attitude and often, increasing levels of cynicism. The irony in these instances is that an initiative that was supposed to enhance employee engagement actually has the opposite effect.
How, then, to interrupt these patterns? At BRIDGE, our history and core expertise lie in using leadership development as a tool for individual and systemic change. From this vantage point, we’ve learned (often the hard way) what it takes to harness meaning as an accelerator of change while navigating the complex and hard to change dynamics of organizational life. One of the most important lessons we’ve picked up along the way is this: we see tensions within an organization not as a sign of dysfunction, as obstacles to be avoided, but rather as a potential source of dynamism, creativity, and direction-setting. In our practice, we hold tensions as hugely important indicators that, when explored with skill and sensitivity, serve to catalyze and accelerate change.
Over the last five years, we’ve supported numerous clients on their journeys to making purpose matter. Here are three tensions that we’ve observed showing up time and time again, across industries and in quite different client contexts:
Tension 1: words – deeds – stories
The words – deeds – stories tension is a major source of confusion, and missed opportunity, for businesses on the purpose journey. ‘Words’ refers to promises and commitments made by an organization as it launches its purpose. Typically, the promises are lofty, but the commitments vague or inadequately thought through. ‘Deeds’ refers to concrete actions that the organization takes – or fails to take – in response to its words. And ‘stories’ refers to the internal and external messaging, and communications strategies and platforms, about the words and deeds.
Ideally, an organization’s words, deeds, and stories exist in a reinforcing loop with each other. The organization needs to be aware of when to emphasize one over the others. But always with an understanding that all three are critical. In this way, the three support each other and generate a flywheel effect that leads to rapid progress in building corporate trust and reputation – simply put: we mean what we say. In practice, however, we’ve found that organizations typically emphasize two of the factors at the expense of the third.
The most common pitfall we’ve encountered is where the focus is put on words and stories, to the exclusion of deeds. This tendency is understandable. Businesses are eager to present themselves in the best light, for employees, customers and other stakeholders. And in the excitement of launching purpose, it’s easy to get carried away by the storytelling possibilities that purpose presents. But without actions and proof points to back up these possibilities, promises made quickly prove hollow. The problem becomes more acute where the purpose represents a major cultural shift for the organization. The risk here is that cynicism and disengagement swiftly follow. The dissonance between the prevailing culture, and the promises made about purpose, can lead to organ rejection of the whole endeavor.
The focus on words and stories, at the expense of deeds, is often an unintended by-product of the purpose journey being led by the Corporate Affairs and/or Marketing functions. If the core competence of the group being tasked with leading purpose is communication, it’s no surprise that this competence is emphasized in the strategies employed for activating purpose. For this reason, we generally recommend the creation of a purpose governance group with cross-functional membership, with representatives from the business units (with P&L responsibility) joining Corporate Affairs, Marketing, Sustainability, and HR.
Other challenges can present with this tension too. We’ve seen instances where the emphasis is placed on deeds and stories, without clear promises and commitments to underpin the activity generated. The result is that progress is intermittent and sometimes incoherent. While several worthy projects may be undertaken, absent a guiding framework the whole can turn out to be no greater than the sum of its parts. This is a huge missed opportunity for the organization. We’ve also seen instances where the focus is put on words and deeds, with little or no story-telling to back this up. The challenge here is that the organization may struggle to harness energy for change and therefore fail to drive momentum behind the purpose.
Tension 2: purpose – performance
As Grant Reid, CEO of Mars Inc. noted in a recent interview, “Performance without purpose is meaningless. Similarly, purpose without performance isn’t possible.” Paul Polman, the recently retired CEO of Unilever, expressed a similar view: “purpose and profitability go hand in hand. This is not a crusade to save the world, it’s fundamentally about growing an amazing business.” These statements are pithily articulated but challenging to apply in practice. In part this is because of the mindset shift required for business leaders to start seeing purpose and performance as existing in healthy tension, rather than as a trade-off.
The traditional view is that businesses should focus on maximizing Total Shareholder Return, then, as responsible corporate citizens, channel a proportion of any surplus to ‘good works’. Properly understood, the purpose paradigm represents a fundamentally different approach. We challenge our clients to take a stand on ways in which they can grow a profitable and competitive edge, while at the same time making a positive impact on the wider world. Sometimes this is easy to do: one client, inspired by the possibilities of its new purpose, innovated a way to remove unhealthy ingredients from a food product, with only a minimal increase in the cost of production. The result was a competitive advantage in the market, and a significant source of growth.
It would be misleading, however, to suggest this approach is always easy. Some purpose projects will inevitably carry short-term costs. The work here is to support business leaders to view these costs in the context of the long-term gains that the purpose will drive. Finding ways to have these conversations in a realistic, grown-up way, and then to make well-thought out choices about the phasing and scope of particular projects, is key. We have found that when skillfully done, holding the purpose – performance tension in this way is a powerful way of building trust in the purpose agenda among business leaders across the organization. Another top tip is to ensure that purpose finds its way into the strategic plans (and planning processes) of the various business units. This is a highly effective way of focusing minds, ensuring that leaders are incentivized to see the purpose as an intrinsic part of business strategy, rather than a non-essential afterthought.
Tension 3: top-down – bottom-up
A final tension we observe is most simply described as top-down – bottom-up. (Depending on the context, the tension could also be named center – regions, or center – business units, or corporate – brands. The fundamental dynamic in each case is much the same.) The heart of this tension is, on the one hand, the desirability of liberating employees across the organization to innovate, pursue passion projects, and form and join purpose-based movements relevant to their context. On the other hand, it’s critically important for the organization to harness and channel this energy by providing guidelines and frameworks through which the purpose can most effectively be brought to life. Get the balance wrong, and the organization risks stifling the latent energy that typically exists at the front-lines; alternatively, a flurry of activity might be unleashed that collectively amounts to not that much – and worse, distracts from business-critical priorities.
While there is no one-size-fits-all answer to this challenge, organizations that navigate this tension effectively typically do a few things well. First, they drive a few high-profile projects from the center, aiming to secure quick wins and generate impact. Second, they foster conditions to allow a handful of grassroots-generated movements to emerge and flourish. The movements must be related to the purpose, and guided by light-touch boundaries, but should otherwise be left to grow according to the local context and the energy of the movement-makers. (An example of this we’ve seen is a regional business unit that took the initiative to develop a new range of products designed to a significantly higher sustainability standard than the global company norm.) Last, they pay real attention to making the purpose come alive at the front-lines of the organization. For this to happen, employees across the business need to be supported and empowered to make sense of the purpose in their own context, and in light of their own personal sense of purpose. Employees must be able to answer the question: “What does the purpose mean to me and my role?”
Harnessing the 3 tensions to accelerate the purpose journey
Through harnessing these 3 tensions, rather than shying away from them, leaders have the chance to rapidly accelerate their journey towards making purpose come alive, and stay alive, within their organization. For these leaders, purpose will start to really matter. They will see it as relevant, meaningful, and credible – shaping the critical business decisions they are called to make and animating their organizational culture. In the process, they will create value, both for their organizations, and for society at large.
About the author
James Boddy is lead consultant at BRIDGE Partnership – valued Meaning partners and experts in organisational transformation and leadership development.
Author: James Boddy at BRIDGE Partnership