In our last article, ‘Evolution of Business Strategy’ (https://www.humancapitalmatters.org/human-capital-matters-blog/the-journey-from-profit-maximisation-to-esg-the-evolution-of-business-strategy), we concluded that an ever-growing number of companies are adopting a purpose-driven approach, where their core mission extends beyond profit-making to include creating positive social or environmental impact. These companies integrate their purpose into their business strategies and decision-making processes, aiming to align their financial success with the betterment of society. The important question to ask next is ‘What type of leadership is needed in a purpose driven organisation?’ Leadership in a purpose-driven business plays a critical role in guiding the organisation towards fulfilling its mission and creating a positive impact. Here are some of the key aspects of leadership and behaviours that we feel are necessary to make a purpose-driven organisation successful.
- Creating a compelling vision of the future: Purpose-driven leaders are able to articulate and paint a picture of a compelling vision that goes beyond financial goals. They inspire and motivate employees by clearly communicating the organisation's purpose and its potential for positive impact. The vision serves as the guiding light and glue that aligns the efforts of the team towards a common goal.
- Values-based decision making: Purpose-driven leaders embody the values of the organisation, lead by example and make decisions in keeping with company values. They demonstrate integrity, authenticity, and a strong commitment to the organisation's purpose. By consistently aligning their actions with the stated values, they inspire trust and confidence in employees and stakeholders. In short, they walk the talk.
- Inclusive and empowering: Purpose-driven leaders empower their teams and create a culture of inclusion and collaboration. They value diverse perspectives, encourage open communication, and involve employees in decision-making processes. By fostering a sense of ownership and engagement, they leverage the collective wisdom and creativity of the team.
- Integrate strategy and purpose: Purpose-driven leaders ensure that the organisation's purpose is integrated into its strategic planning and decision-making processes. They align business strategies, initiatives, and resource allocation with the purpose and desired impact. They also stay informed about emerging trends and adapt the organisation's strategies to maximise its positive contribution.
- Care about and actively engage with all stakeholders: Purpose-driven leaders actively engage with stakeholders and consider their interests and perspectives. They seek input from employees, customers, and the wider community, and integrate their feedback into decision-making processes. They build strong relationships with stakeholders, fostering trust and collaboration.
- Prioritise ethical considerations into decision making: Purpose-driven leaders make ethical decisions that align with the organisation's purpose and values. They consider the social, environmental, and long-term implications of their decisions, prioritising the greater good over short-term gains. They ensure that the organisation's actions are consistent with its mission and contribute to positive impact.
- Foster a culture of continuous learning and improvement: Purpose-driven leaders foster a culture of continuous learning and improvement. They encourage innovation, experimentation, and learning from failures. They invest in developing the skills and capabilities of their teams and promote a growth mindset that embraces new ideas and adapts to changing circumstances.
- Are able to measure and communicate the impact of the organisation: Purpose-driven leaders establish systems to measure and communicate the organisation's impact. They define key performance indicators (KPIs) that align with the purpose and monitor progress towards social, environmental, and financial goals. They transparently communicate the organisation's impact to stakeholders, showcasing achievements and areas for improvement.
Effective leadership in a purpose-driven business requires a deep understanding of the organisation's purpose, a genuine commitment to its mission, and the ability to inspire and engage others. By leading with purpose, values, and a focus on positive impact, leaders can create a culture that fosters innovation, attracts, and retains top talent, while contributing to a sustainable and meaningful future. Whilst there may be organisations that still believe that putting the biggest ‘corporate bully’ in charge is still the way to go, we believe that purpose driven organisation’s with the leadership skills set mentioned above, will be the organisations that flourish into the future. ?
Ravi Moodley (Joint CEO) Human Capital Matters
Tani Moodley (Joint CEO) Human Capital Matters
