Purpose

Corporate Purpose - a search for the meaning of life

Simon Slater

Simon contemplates the meaning of Purpose

Companies the world over are busily pursuing a sense of purpose. Their quest for purpose is driven by an expectation on the part of their people, customers, communities and shareholders to contribute to society in a positive way. A desire to make a difference - beyond profit.

The main trigger for this collective enlightenment is the urgent need to protect the planet from the consequences of climate change. Some would go further, citing an urgent need to reverse the damage we are causing.

However, there are many ways in which companies can make a positive impact on society. We mustn’t confuse the need to demonstrate good stewardship - of which Environmental, Social and (corporate) Governance (ESG) is a vital part - with our central purpose. Yes, we can all play our part in dealing with climate change, and in becoming more equal, diverse and inclusive organisations. But companies do not all need to define their purpose as being to save the world.

You would be forgiven for thinking that purpose was something new. It isn’t. Organisations, many of which still thrive today, have understood the need for purpose for centuries. For them, it was and remains part of their DNA. For others, it’s a question of post-rationalisation - rethinking why they exist. And for many of these the going appears to be tough. Some firms remain confused about their raison d’être.

But it shouldn’t be difficult. Let’s go back to basics. The Oxford English Dictionary (OED) defines purpose as “the reason for which something is done or created or for which something exists.” On the face of it this is pretty unambiguous.

The French, on the other hand, define raison d’être as the most important reason for someone or something’s existence. And it is here where most companies get stuck.

At the OED level, the BBC’s purpose is to produce and broadcast TV and radio content. Assuming the French approach, however, means that in fact the BBC’s purpose is “to serve the public and to inform, educate and entertain.” This statement lies at the heart of the BBC’s Charter. If it didn’t have this higher purpose, we would not engage with its content.

Lego exists to make money out of manufacturing toys (400 billion bricks to date). Well no, actually its purpose is “to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future.” And before my reader questions the environmental impact of these little bricks, the company has vowed they will be 100 percent sustainable by 2030.

Ask a professional adviser what their organisation’s purpose is and this is likely to be the answer: “to provide the best advice to our clients and generate a profit in doing so.” I’m sure the good people at PA Consulting aspire to do just that and yet their purpose, startling in its simplicity, is “bringing ingenuity to life.” The most important reason the folks at PA have to get out of bed in the morning is to pursue a creative, positive vocation. If they succeed in their purpose the money will follow.

My advice to boards grappling with purpose is to keep it simple. Don’t overthink it; the reality is that the hard part lies in engaging your people and aligning your organisation to ensure your purpose cuts through. According to one source, 78% of executives believe their businesses are failing to deliver on their purpose. *

If you are stuck, stop asking the question “why do we exist?” and ask the question “why do we really exist?” “What is the most important reason we exist?” Involve your people in this process to ensure they are emotionally invested in it. Once you’ve cracked that, and only then, turn your attention to alignment and delivery.

Marc Koehler, author of ‘Leading with Purpose’ says: “It’s only when companies are clear about their purpose, have clearly communicated it, and it is understood by the team, that they can achieve both unity of effort and distributed decision making.”

Why? It is a powerful question. And it would be remiss of me not to answer it by providing some reasons for doing all this in the first place. Just in case you have some cynics in your midst!

The first reason is that your employees, customers/clients, supply chain partners and other stakeholders expect your company to have a higher purpose. It encourages the right behaviour.

The second reason is that we live in an ever increasingly transparent world, one in which the reputations of organisations can be undermined by a single social media post. As businesses, we are always open, always on duty, always being judged.

The third reason is that McKinsey now has a large body of evidence which points to the fact that companies which execute with (a higher) purpose have greater odds of creating significant long-term value generation, which can lead to increased employee engagement, higher customer trust, and stronger financial performance (when compared to those that don’t).

The CEO of Cirque du Soleil, Daniel Lamarre, puts it succinctly:

“At the end of the day, you want to be profitable, but that’s not the meaning of life.”

* Source: Good Up