Do you really need a purpose?

A company I have worked with in the past is going through a de-merger and, in their new independent state, will find themselves without a purpose.

That got me thinking: “Do they really need a purpose?”

Isn’t the purpose of every company simply to create profit and drive shareholder value?

For some companies, especially small and medium-sized enterprises, focusing on a clear, simple objective of profitability might ensure that all employees are aligned towards a common goal without the ambiguity that a broader purpose might introduce.

That said, recent research found CEO’s who received their MBA’s from universities that pushed the shareholder value narrative, have done that mostly by squeezing wage growth and labor costs. Meanwhile, the research shows, these CEOs failed to increase productivity and invest for future growth.

Another argument for a purpose is how useful it can be in decision making.

In an industry notorious for nickel-and-diming passengers, Southwest Airlines purpose of democratising the sky is why they resisted charging for luggage. It’s not a marketing strategy, it’s a manifestation of their broader purpose to make air travel accessible and affordable to all.

But don’t values do that?

In a way, but there is a fundamental difference between a purpose and values. While they both define an organisations identity, the purpose describes ‘why we exist’ and values remind us ‘how to behave’ on the journey towards achieving that purpose.

In other words, the purpose shows us the direction we are all heading, and values give direction to our individual, everyday actions.

That’s why I no longer feel attracted to the idea that everyone needs their own personal purpose (at least, as part of their work life). While it can be helpful to know where you’re personally headed, I’ve come to see purpose more as a collective endeavour... answering the question:

Where are WE headed?

We are social beings. Our lives become richer when we achieve things together. And not just how much money we made or returned to investors.

Thousands of years ago ancient Polynesians covered 40% of the earths surface in simple open canoes. They didn’t do it to increase shareholder value and they didn’t do it alone.

An organisations purpose is one place people can find personal meaning in our otherwise (mostly) ordinary lives. We can also find it through a family, partnership, or community purpose... and a combination of all four.

So, reflecting on all that... I DO think organisations need a purpose. They need one for the benefit of the shareholders - purpose-driven companies simply do better than those without a purpose, and because people need to feel their contribution makes a difference to something bigger than just a singular life.

A purpose is as much a social obligation as it is a business one.

Jason.

Hello. I'm Jason Moore.

I've spent 20 years leading, designing and coaching the planet's most ambitious and innovative culture transformations. I've activated game-changing purpose, values, habits and rituals, resolved the impact of toxic beliefs, prepared leaders, and I've been deeply involved in the nitty gritty of everyday change.

I've worked with culture heavyweights, including Microsoft, HSBC, Nordea, Netflix, Equinix and many others in more than 30 countries.

If you'd like to chat about how I might be able to help you, I'd love to set up a time to talk. Connect here on Linkedin or via [email protected]...