Driving Purpose and Values into Organizational Culture

There is great power in purpose. Someone who deserves to be better known for their words once said "Purpose is the reason you journey. Passion is the fire that lights your way." Over the past several years, an increasing number of organizations have turned their attention to corporate purpose, clarifying the reason for their existence and the differentiated value they bring to the world. Sometimes, unfortunately, this doesn't move much beyond corporate PR and brand marketing. However, there are many organizations that have tapped deeply into a sense of purpose, aligning their approach to business with the pursuit of that purpose. That clearly involves much more than words on a website or a CEO soundbite on an earnings call. But how much more, and how should an organization embark on that journey?

I have been thinking about this for some time, and from a particular perspective: how an organization can commit to its purpose and energize its people to have a meaningful and significant impact in the world. If purpose is your Why, then values are your How. Whether they realize it or not, all organizations have values, and they tend to fall into two camps. In the first are organizations whose values are explicit, based on ethical principles, and widely shared and practiced across the organization. In the second camp are organizations that may or may not have adopted core values; but what happens in practice (for better or worse) is the result of an implicit understanding of "how things are done around here."

In more than 20 years of consulting to large organizations, it has been my experience that the ones with a clear sense of purpose also have a strong values-based orientation, recognizing that rules and compliance controls will take you only so far. This tends to promote a more thoughtful and effective approach to identifying and addressing the ethical issues that arise in their business. I might even go as far as to say that organizations of this kind tend to have developed a stronger ethical culture, which promotes responsible decision making and conduct and empowers people to speak up when they have an ethical concern. There is research supporting this correlation, but it is beyond the scope of this article. The Harvard Business Review publishes a number of these studies.

As a means to illustrate and simplify (to the extent possible) an approach to embedding purpose and values into organizational culture, my firm Blue Quoin Advisory (BQA) has developed the BQA Culture Drive Model. The goal of adopting the approach contemplated in the Model is to drive business value and ethical outcomes through the intentional and strategic integration of organizational purpose and values into operating systems and culture.

For the Model to make sense, you will need to accept its foundational premise: that organizations can not only make work meaningful for employees, but also derive significant business value from a strong purpose orientation. Evidence from across industry sectors has proven that genuinely purpose-driven organizations outperform their non-purpose-driven competitors on critical metrics. For example, Deloitte 's 2021 white paper, "The purpose premium: Why a purpose-driven strategy is good for business" found that companies with a clear and consistent purpose—the differentiated role it serves in society—can yield a “purpose premium,” driving long-term value and creating competitive advantage?across at least six key metrics: brand and reputation; sales and innovation; capital access and valuation; operational efficiency; talent; and risk mitigation.

The Model (see graphic below) should be viewed from the center outwards, since everything starts with why. It envisions four phases, which can be sequential or somewhat contemporaneous (depending on where an organization is on its purpose and values journey). Companies that are at an early stage in articulating and communicating their purpose, will have more work to do with regard to alignment and integration than those in which purpose is already a recognized and important consideration.

ENGAGE

A clear sense of purpose—knowing why your organization exists and the difference it makes in the world—engages your employees and makes their work meaningful. Understanding how you intend to pursue your purpose—and especially the shared values that should guide decisions and behaviors—will establish guidelines and norms that ensure consistently ethical and risk-sensitive outcomes.

ALIGN

The organization’s purpose and values should be reflected in its business model—how it creates, delivers, and captures value. This is only possible when the strategy—the path to get there—embeds the purpose and values into all goals and objectives. This requires that operational processes, key performance indicators, and metrics be designed accordingly.

ACCELERATE

Taking specific actions in relation to your people can accelerate and embed purpose and values into organizational culture. Nurturing trust, transparency, and psychological safety will not only promote collaboration and open communication, but it will also encourage speaking up with questions and concerns, which is essential for an ethical culture. Technology can be an accelerator through enhanced communications, automation and efficiency, employee engagement mechanisms, and training and development.?Making data accessible and transparent can foster trust, accountability and informed decision making.

MAINTAIN & STEER

Ultimately, an organization’s success in developing a purpose-driven, values-based culture that is high-performing and ethical comes down to three overarching factors: the commitment and example of leadership; the robustness of its governance; and the accountability mechanisms that hold people to expected standards of conduct and decision making and promote ethical leadership and continuing development.??

Winning as Well as Worthy

Some may remain skeptical of the necessity?—?or even appropriateness?—?of integrating a higher purpose into business activities. Even in 2024, some may still cite economist Milton Friedman’s assertion in 1970 that “the primary responsibility of a business is to make a profit for its shareholders.” Of course, businesses must make a profit. Those that don’t are not sustainable and, sooner or later, will cease to exist. But is simply making a profit really why a business exists? Even on the most pragmatic analysis, I believe the answer is no. Businesses are established because their founders see an opportunity to meet a societal need and bring value to customers more efficiently, cheaply, competently or creatively than their competitors. They want to be?—?and should be?—?rewarded for their effort, of course. But profits are the result, the outcome of a job well done, not the sole focus. John Mackey, co-founder and former CEO of Whole Foods Market put it this way:?

“Just as people cannot live without eating, so a business cannot live without profits. But most people don’t live to eat, and neither must businesses live just to make profits.”

This reflects Mackey’s belief in what he calls “conscious capitalism,” the idea that business exists to better the lives of customers, team members, investors, suppliers, communities, and the environment as a whole.

Even if you find that to be a stretch, it is hard to argue with the business benefits of a purpose orientation that were identified by the Deloitte survey cited above.?

Consider also the findings of a study published earlier this year in the Journal of the Academy of Marketing Science. The paper “Purpose Orientation: An Emerging Theory Transforming Business for a Better World” , by Christopher P. Blocker, Joseph P. Cannon, and Jonathan Z. Zhang, explores how businesses are evolving to integrate purpose beyond profit into their core strategies. The paper concludes that purpose orientation is a transformative approach for businesses, emphasizing that integrating a clear and compelling purpose into the core of an organization can drive significant positive change. The authors argue that purpose-oriented companies are better positioned to create value for all stakeholders, including employees, customers, and society at large. This approach not only enhances ethical behavior and organizational culture but also contributes to long-term business success and societal well-being.

Leadership and Purpose

Purpose-oriented thinking is beginning to enter the mainstream of leadership practices. Simon Sinek, an author and thought leader in the fields of leadership and organizational culture, has written and spoken eloquently about the power of purpose. In this four-minute video , Sinek explains why great leaders start with “why.” He notes that every single organization functions on three levels: what we do, how we do it, and why we do it. He argues that great leaders reverse the traditional order of these functions to start with why. In so doing, these leaders are able to inspire their people with a vision of a world that does not yet exist and then enlist their talents and efforts in helping to build it. It has become a corporate cliché to say that “our people are our most important asset.” However, when an organization’s people feel inspired by and connected to a sense of purpose greater than themselves, they tend to be highly motivated, energized and committed in a way that cannot ever be mandated or bought.?

Given the driving metaphor in the culture model discussed in this article, it seems fitting to leave the final word to someone who was not only a wildly successful businessman, but also a game changing visionary in the field of human mobility. Henry Ford stated simply:

“There is no failure except failure to serve one’s purpose.”

A Conversation About Culture

For me, LinkedIn continues to have enormous value as a platform for connecting like-minded professionals. Equally important, if not more so, is its role as a marketplace of ideas and a way to share and test concepts. In that spirit, I would love to hear from those interested in purpose, values, and culture and would appreciate all and any feedback on the BQA Culture Drive Model.