Purpose represents the “why” of our actions and efforts. More importantly, it specifies our contribution to this world and to the society in which we live. A higher purpose is not simply about profits. It refers to why you do what you do, reflecting something much more aspirational that contributes to our global society.
The nature of purpose is formed by three unique, yet interrelated, dimensions: knowledge, action and motivation. The first dimension, knowledge, represents the explicit understanding members have about an organisation’s purpose (i.e. the formal purpose statement). The second, action, reflects the extent to which an organisation is putting into practice what it says in its purpose. And finally, motivation draws on the beliefs and motivations of the individual. When purpose touches the heart of an individual, it energises people to transcend their own interests, further fuelling the fulfilment of purpose. When organisations are true to their purpose, the three dimensions of purpose approach each other and knowledge, motivation, and action become unified.
Why is purpose important?
The concept of purpose is becoming a necessary key element for creating meaningful organisations in a competitive environment that is strongly marked by uncertainty. It is about generating a purpose that will be imprinted in the heads and especially the hearts of employees, making them feel proud of being part of the organisation and leading to shared ambitions. It will empower them to bring out the best of themselves.
For individuals, benefits of purpose have been found in diverse areas such as health, well-being, and productivity. For organisations, a positive impact has been found in areas such as customer loyalty, innovation, employee engagement and financial performance.
Most prominently, purpose is an essential driver of employee engagement! Nearly 80% of LinkedIn members find purpose more or equally important as status and money. Having a shared purpose has been linked to increased employee commitment, proactivity, and extra-role behaviours. People work because they want to play a role in society, to develop themselves and simply because they love to do it!
How to become a purpose-driven organisation? Four steps to identify your corporate purpose
Establishing a strong and shared corporate purpose is much more than crafting an abstract purpose statement. It starts with identifying what the purpose of the organisation actually is. Generally speaking, four steps need to be taken to identify a corporate purpose.
1. Draw the map of key stakeholders
A corporate purpose, rather than being defined for the stakeholders in a top-down way, needs to be defined in correspondence with them. Employees, clients, stakeholders, opinion leaders, etc. are the primary stakeholders in most organisations. Engaging them in identifying the corporate purpose gives them the opportunity to contribute something worthwhile and appeal to their fundamental motivations as human beings.
2. Identify relevant topics for stakeholders
For successful organisations nowadays, it is essential to know which big social issues worry one’s stakeholders and to sense what the business is expected to do in order to improve this world. In order to identify relevant topics, organisations need to actively listen to the stakeholders. Their perceptions and opinions should be integrated with the analysis of relevant topics. For this, contextual, reputational and social intelligence is needed. Keeping track of social trends and concerns allows organisations to identify truly relevant topics and narratives.
3. Promote internal and strategic reflection
Executives must review the previous steps and further engage in the critically important process of defining the organisation’s distinctive features: its legacy and the future it hopes to build. This means being able to commit to a shared belief, which leads a company to make a significant contribution in the areas where it operates. An internal reflection of purpose can be seen as a striking balance between:
- what an organisation wants to be (i.e. the corporate dream)
- what an organisation needs to be (i.e., society and stakeholder expectations)
- what an organisation can be (i.e., the company’s objective capabilities and strengths).
4. Articulate a differentiated purpose
Once the corporate purpose is identified, a purpose statement can be drawn up. It is recommended that this statement must:
- be concise by using short phrases.
- be straightforward by avoiding jargon.
- seek what is characteristic: “this is us”.
- stay authentic, and firmly ingrained in the organisation.
- seek what is timeless, rooted in the past and forward-looking to the future.
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