WHY are you? Thrive in challenging times with the power of purpose.
This is the third in a series of articles featuring simple, functional ideas for leading in a dysfunctional world – a collaboration by Josh Steele and Rita Zonius. In this article, Josh explains why purpose is the key to unlocking your potential.
Polarization. Pandemic. PR vs problem-solving. Profit at all costs.
It seems more and more like we’re living in the Upside Down, the alternate universe in Netflix’s Stranger Things. We’re trapped by status quo thinking that keeps us fearfully peering in the rear view mirror and not looking at the road ahead. We’re inundated by news of fear-mongering politicians, corporate greed and climate change. We’re worn down by caustic vitriol and a stubborn inability to entertain different points of view. Amid all this fear, uncertainty and anger, why wouldn’t we bury our heads in the sand?
Yet, there’s something in the air and many organizations are waking up to the realization that being clear on purpose - the fundamental reason a company exists - is critical to addressing concern about the big issues of the world today.
There’s a growing body of evidence that people living with a clear life purpose live longer than those who don’t. Similarly, purpose-driven leadership is a key strategic differentiator in high-growth companies and increasingly viewed as essential to survive and thrive in challenging times. Establishing purpose is an important way to set a strong tone at the top and focus your people on what really matters.
Navigating the Upside Down, however, is not easy when there are few black and white answers to problems and a lot of grey in between. Here are four factors for leaders to keep top of mind while honing and clearly communicating their higher purpose.
Purpose is about more than profits
Simon Sinek nailed the importance of purpose when he said: “People don’t buy WHAT you do; they buy WHY you do it.”
Today, ‘why’ you do what you do can no longer be constrained to the notion of maximizing shareholder value. According to insights from Deloitte, organizations that see purpose as an advertising tool or a way to win market share may make short-term gains, but over the longer term, they will miss the opportunity to truly engage their people and connect with their consumers and the communities in which they live and work. Instead, organizations that seek to develop a holistic view of their reason for being—one that reflects the market, social and environmental landscape—will stay ahead of increasing stakeholder demand for companies to do good.
Marc Benioff, the CEO of Salesforce, said at Davos 2020 “stakeholder capitalism, or the idea that companies have a greater purpose besides just providing returns for shareholders, has hit a tipping point.” He concluded that “suggesting that companies must choose between doing well and doing good is a false choice. Successful businesses can and must do both.”
This echoes the sentiment of Larry Fink, CEO of BlackRock, who in 2018 sent a letter to CEO’s of the largest public companies in the world in which he acknowledges that governments are no longer viewed as trusted or competent in dealing with our most challenging societal issues. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
The private sector is now being asked to provide the social and regulatory leadership the public sector has failed to act upon.
A changing workforce demands that business become more conscious
Millennials and generation Z are intent on developing purpose-driven careers. The delineation between personal and professional life has become blurred as the fastest-growing segment of the workforce expects to pursue personal passions and express their essential values through the work they do and the companies they work for.
For organizations to keep pace, they must embody values that align with the talent they hope to attract and retain, not the other way around. These generations are less motivated by money, title and tenure than any preceding them. A purpose that puts all stakeholders (employees, customers, community, investors) at the heart of decisions in an authentic and consistent way is much more likely to make an impact on people.
Examples such as Patagonia’s activist stance in spearheading corporate social and ecological responsibility, TOMS Shoes “one for all concept” to support children in underdeveloped countries and Google’s commitment to combating climate change, increasingly demonstrate purpose-driven people want to work for conscious businesses.
The benefits of this alignment are huge. According to a PWC study, millennials are 5.3x more likely to stay with a company if they have a strong connection to its purpose.
Connecting people to purpose maximizes engagement
Purpose is not transactional, it’s aspirational. We all want to know the things we do matter - not only for us, but for the world around us. It’s a galvanizing force that moves us to address higher order needs, grow and achieve our potential.
In the workplace, communicating a purpose gives employees a sense of meaning, boosts their engagement and encourages them to do their best work. A recent Deloitte study shows 73 percent of employees who way they work for a “purpose-driven” organization are engaged, compared to 23 percent of those who don’t.
General Joe Robles, former President and CEO of financial services group USAA, believed a leader’s most important job was to “connect people to their purpose.” The company invested heavily in an immersive cultural orientation for its 20,000 employees which resulted in its widely renowned reputation for outstanding customer support. Specifically, Robles’ ‘Rules for Leadership’ included a strong focus on communication and rallying people around making the life of those with military service easier.
Purposeful employees are not only more engaged. According to a study by Imperative, they have a higher likelihood of developing into senior level roles, to be company influencers and ambassadors, to have longer tenure, and form stronger bonds with their colleagues. This not only benefits employees but can give employers a competitive advantage as well.
Purpose-driven brands win the “swing vote”
Times have changed. The world has evolved from the Gordon Gekko “greed is good” (Wall Street) view of consumerism to one in which a company’s values have become just as important as the products or services it offers. In an era defined by cancel culture and low trust, customers now have the power that businesses once held.
According to brand futurist Simon Mainwaring, 91 percent of consumers say they would switch brands if a different one was purpose-driven and had similar price and quality.
Unilever recently announced that its purpose-led, Sustainable Living Brands are growing 69% faster than the rest of the business and delivering 75% of the company’s growth. A Harvard Business School study comprising 7,000+ consumers revealed that 64% of consumers who said they had a brand relationship cited shared values as the primary reason.
A recent report by Accenture illustrates how customers are becoming the ‘swing vote’ when it comes to the relevance of a brand in addressing an evolving and wider array of needs. A global survey of nearly 30,000 consumers found that 62 percent of customers want companies to take a stand on current and broadly relevant societal issues. The closer a company’s purpose aligns to their own beliefs, the better the brand is perceived.
The key to unlocking your potential
Albert Einstein once said, “In the middle of adversity there is great opportunity.”
Where many business leaders once thought profit determined purpose (go where the money is), they are now coming to realize defining and acting with purpose drives superior financial and operational performance. What previously was a nice to have is now a must have.
For organizations and leaders today, operating with purpose is the master key that reveals a world of opportunities. It aligns you with all of your stakeholders, opens up new markets and ecosystems, focuses you on sustainable growth vs short term outcomes, and maximizes your contribution to society.
In this Upside Down world that is in desperate need of creative solutions, big-picture thinking, and a genuine commitment for serving others, organizations that define and act with purpose will stand above the rest.
Why does your company exist? What is its higher purpose?