Getting company purpose right
A company’s purpose must be integrated into every corner of its activities. But no amount of integration or activation effort will pay off if the purpose itself is flawed: foundations are everything in developing purpose. The following three factors are critical to ensuring the purpose initiative is met with trust and support by the organisation and wider stakeholder groups:
1. Foundational evidence
Every successful company purpose lies at the intersection of three things: a higher cause, the needs of customers, and the unique position of the company. Omit the first and there is no path to sustainable growth. Omit the second and create a distraction to the firm’s business focus. Omit the third and the purpose is shared by your competitors.
Words are cheap, but a flimsy purpose initiative can be both damaging to the culture and a missed strategic opportunity. The gathering and scrutiny of the foundational evidence is essential to building a strategically-sound purpose that generates as much advantage for the company as it does for society and customers: in short, ensuring a resilient company that will shine in future. This is particularly critical to winning the confidence and commitment of employees that have been conditioned to be sceptical, bearing in mind that over 90% of company purpose statements mean nothing.
2. Inclusive discovery
The need for top-down ownership must not be mistaken for developing the purpose behind closed doors. Becoming a purpose-driven company, unless the firm began that way, demands a shift in gears for everybody. Given the reliance on employees at every level to take up the purpose, it’s vital nobody feels left behind by its development. Meanwhile, the foundational evidence is unlikely to be convincing if it doesn’t represent the perspective of employees and customers.
The engagement plan should include reflection at key milestones. For many firms, an early opportunity to coalesce arises from a new shared understanding of firm’s unique position. Gathering inclusive perspective on the company’s greater role, together with insights into the most valuable unmet customer needs, are vital precursors to approaching the purpose articulation itself.
3. Leadership consistency
Top management must be consistent in bringing the purpose to life once it is articulated. They must therefore feel confident in the foundational evidence that underpins it, and the nature of the changes it implies. Unaddressed doubts or concerns can cause irreparable damage to a purpose initiative, so board consensus on the aims, methods and outputs of the initiative is vital.
Universal agreement to all outputs is particularly important since sceptics will seek each other out. Voting should be avoided as it accepts dissent and often leads to ‘stand-asides’ - silently disenfranchised decision-makers. Instead, a process of active consensus-building should be used to strengthen the purpose proposal until the needs of all decision-makers are fully answered.
Purposecraft provides advice, consulting and training in strategic company purpose development.