Purpose is often cast aside as a non-essential to an organization’s success. Finances, IT, sales and product are discussed far more often than purpose. Yet purpose is the driver – without an employee feeling a sense of purpose, the salesperson would be listless and the product engineer would lose creativity. In times of crisis, purpose is more important than ever. It inspires employees to move beyond inertia to action. But what is organizational purpose and how can a manager strengthen it?
What is Purpose?
David Packard, Co-Founder, Hewlett-Packard said:
“Purpose; it’s like a guiding star on the horizon —forever pursued but never reached. Yet although purpose itself does not change; it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress.”
So, what does that mean in real life? Well, have you ever had to drag yourself out of bed, to go to a job that you hated? It’s like pushing a heavy rock uphill.
But when purpose is motivating your actions, everything feels very different. You have a kind of lightness, even when things are intense, or tough. And the same thing is true for organizations. You can feel when an organization is animated by purpose. And that’s a feeling that people want to have. It’s also a feeling that drives better performance.
Annie McKee, the founder of Teleos Leadership Institute, studied dozens of big organizations, and interviewed thousands of people who work there. What she learned is that when we feel negatively about work, we don’t process information well. We don’t think creatively or make the best decisions. But when our feelings about work are positive, the opposite is true. McKee also found that the thousands of people she interviewed listed three things that made them feel good about work.
Things that makes people feel good about work:
- First is a meaningful vision of the future. People want to contribute to a future that matters to themselves and others.
- The second thing that makes people feel good about work is great relationships. Whether people are leaders, managers or employees, “close, trusting, and supportive relationships” are a big part of what motivates them to contribute.
- The third thing that made McKee’s subjects feel good about their work was — wait for it! — a sense of purpose. And if their personal purpose is intertwined with their organization’s purpose — whether it’s ending hunger or creating better widgets — that’s even more positive.
What is Organizational Purpose?
So, if purpose is so important, what exactly is it? An organization’s purpose is not the answer to the question “What do you do?” which typically focuses on products, services and customers, but rather the answer to the question “Why is the work important?” It conveys what the organization stands for in historical, ethical, emotional and practical terms. In other words, purpose is central and enduring to an organization’s culture.
Purpose, Mission, Vision and Values
It’s easy to confuse the difference between purpose, mission, vision and values. Here is a simple way to remember:
| Purpose | = | Why | : | Why the organization exists |
| Vision | = | Where | : | Where the organization aspires to go in the future |
| Mission | = | What | : | What business the organization is in |
| Values | = | How | : | What the organization values and how those values are manifested in a workday |
Here’s an example for a fictional startup called Connecto:
| Purpose | : | Create a globally connected community |
| Vision | : | Connect 23% of the world by 2025 |
| Mission | : | Build an online platform that allows people to post local news |
| Value | : | Speak Up! (this allows people to speak up and disagree if they see something going astray) |
Why is Purpose Important?
Now that we know what purpose is, why is it so important?
Many studies have shown a strong link between purpose and performance. When employees embrace purpose—when the organization lives it, and not just creates colorful posters about it—the performance shoots up. A survey of the leaders, employees and customers of 50 companies in the fields of technology, media and telecommunications; consumer products; and financial services was carried out by the Boston Consulting Group.
The results of this survey were analyzed using measures such as total shareholder return (TSR), revenue, and EBITDA growth. The results showed that when the organizational purpose was truly ingrained, it correlated strongly with ten-year TSR.
Another reason that purpose is important is because employee expectations are changing. Along with it, the demands of always-on transformations have exposed the limitations of using carrots and sticks to influence employees. To counter this, organizations are understanding the need to appeal to head and heart with not only the extrinsic motivators but intrinsic motivators as well. These Intrinsic motivators include employees’ desire for meaning, connection, and joy in the work, as well as the desire to contribute, develop, and achieve. Purpose is one of the most powerful intrinsic motivators because it speaks to both the head and the heart.
Benefits of Purpose
A 2016 poll by the Gallup Organization shows that only 13% of employees worldwide are engaged at work. The reason why most engagement efforts fall short is that they’re designed to cultivate employees’ commitment in generic, general ways and not attach any purpose to them. Employees must internalize the organization’s purpose, so they make decisions that clearly support those priorities. Ultimately, they design and deliver on brand customer experiences that strengthen the brand’s competitive position and build equity in the brand.
Below are four benefits of organizational purpose:
1. Instill Purpose in Employees
Employees may be very good at compliance, but in today’s global competitive marketplace, going through the motions is not good enough. Organizations need employees who are engaged and come to work with a sense of purpose that comes from knowing that what they do matters to others. When employees are engaged in their work, they enjoy what they do and tend to be more productive.
2. Provide Clarity
Fearing ambiguity leads to narrow thinking and reactionary behaviors. Embracing clarity can open the door to allowing employees to see possibilities that they wouldn’t have otherwise seen. Purpose then drives clarity because it “connects the dots” for employees. They know what is expected of them and why.
3. Stimulate Innovation
Knowing what an organization stands for can open the door to purposeful teams. It enables employees to think of new ways of doing things for a reason — that is, to meet the mission of the organization. That depends upon purpose.
4. Groom the Next Generation of Leaders
Organizations that survive more than a generation are typically those that have developed a leadership cadre who inherited the mission and have been shaped by core values. Purpose leads to intentional employee development.
What Does Purpose Look Like?
You may wonder what organizations claim for their purpose statements. Here are some examples:
“The purpose of Disneyland is to create happiness for others. And you see, the beautiful thing about saying, “We’re going to create happiness” was then I could say, “Look, you may park cars, clean up the place, sweep the place, work graveyard and everything else, but whatever you do is contributing to creating happiness for others.”
– Van Arsdale France, Founder, University of Disneyland
Purpose is like the roots of a tree. Strong roots — strong purpose — provide the tree with nourishment, good health and the ability to sustain itself. If the roots go deep, your tree, and its entire corner of the forest, will prosper. But if roots are shallow, and starving — because you never feed them with purpose — eventually, your tree will fall down. And it won’t just fall down by itself. It’ll take other trees down with it.
We would love to hear from you! What’s your organizational purpose? How is purpose driving your motivation levels and enhancing the business performance? Let’s share experiences. Leave a comment below, send us an email, or find us on Twitter.