How to Define Purpose and Transform Your Business - Part Two
Updated: Sep 18, 2020
In part one of this five-part series on the importance of purpose in a post-COVID environment, I discussed that purpose will be foundational for the viability of organisations in the medium to long term. The demonstrated mission of businesses and the values of their employees and customers will be the cornerstone of post-pandemic survival and beyond. In this week's post I want to shed light on how to define purpose in the context of business.
Purpose is an organisation’s why.
Purpose is a company’s fundamental reason for being. An understanding of purpose at this most basic level has led many organisations to have a formal purpose defined in a missions and values statement created by the executive team or external consultants. This oft-ignored document might have been written at an offsite planning session, may make its way to a forgotten part of the staff intranet and is destined to be forgotten as promptly as it was conceived.
The new purpose is different.
This purpose creates value for the company and simultaneously solves a social and environmental problem. Social and environmental impact are therefore deeply integrated into the business, rather than being the domain of a separate human resource department or once-off initiative.
This kind of purpose – one that is a core element of business strategy and centres social and environmental impact – is transformative. An effective purpose positions organisations at the intersection of planet, people and profit, where creating value for the planet, value for people and value for the company's profits are inextricably linked.
Navigating impact on the planet, people and profit in a way that is authentic, socially significant, profitable and serious is the magic formula to a powerfully transformative purpose.
Elements of transformative organisational purpose
Purpose must be authentic
Stakeholders must see the way purpose drives an organisation at every level. From employees and suppliers to investors and consumers, all stakeholders need to see how an organisation’s purpose genuinely influences the way the company operates. If purpose isn’t authentically embedded into an organisation’s DNA, it is at risk of being thrown out with the strategy when the business faces challenges.
Purpose must be socially significant
An organisational purpose devoid of social significance cannot have the same transformational power as purpose with social and environmental impact at its core. Consumers demand more from businesses than ever before, they want their dollars to provide for people and the planet rather than support profit for shareholders alone. Organisations that are unable to keep up with this demand will find themselves out of step, particularly with millennial and Gen Z markets as outlined by Deloitte's Retail Trends 2020 Report.
Purpose must be profitable
Profit is a core element of a powerful transformative purpose. Far from being a constraint to competitiveness, socially responsible practices driven by an organisation’s purpose is a key strategic asset that supports profit. In turn, profit incentivises constant innovation and improvements to scale.
Purpose must be taken seriously
If an organisation’s purpose isn’t taken seriously internally, it will not produce an impact externally. Driving forward an organisation’s purpose must be prioritised in all business operations, decision-making and evaluations, including incentives and rewards for leaders that deliver on the purpose.
Your organisation’s purpose has never been more important to its overall viability and resilience than in 2020 and beyond. If you need help defining your company's purpose contact us at The Purpose Agents to have a chat.
This is part two of a five-part series on the importance of purpose in a post-COVID environment. Part one discusses purpose as retail’s major industry disruption, part three will link purpose and environmental sustainability, part four will discuss aligning employees with your business’ purpose, and part five will explore the impact of purpose on profitability.