The Power + Impact of Purpose
Purpose + Performance Project
What if every company was purpose-driven? What impact could you have on the world?
This white paper represents the first of many to come regarding purpose and performance–if business is to be a force for good, how can we optimize its effectiveness? The goal of the Purpose and Performance Project is to share the stories of purpose and impact-oriented companies and organizations, to strengthen and leverage their performance and impact, as well as to serve and build up the broader purpose ecosystem.? To what end? What might it look like if every company in the world was purpose-driven? What further impact might business have on society? These are questions that will be explored through these white papers.
Throughout the year, we’ll interview the founders and leaders of purpose and impact-oriented companies and organizations to directly hear the impact, opportunities, and challenges they face. In this white paper, we explore the power and impact of purpose, what purpose-driven companies look like (and don’t look like), and introduce you to our first sample of companies through their own stories.
Power and Impact of Purpose
The power of purpose originates ultimately in people, in each of us. Tracy Brower describes purpose as “a belief that your life matters and that you make a difference. It is a sense of being guided by meaningful values and goals.”1 Because it grounds us into what really matters and how we tangibly contribute to society, it provides a sense of direction. There’s a North Star-like quality to purpose. While we may not figure it all out, this grounding allows us to strive a little less, care less about what others think about us, and move step by step to becoming more loving and innately powerful human beings. At the same time, purpose is also something that continually evolves and develops within each of us. Naina Dhingra and her colleagues offer that “an individual’s sense of purpose isn’t fixed or static—it can be clarified, strengthened, and, for some, may serve as a lifelong aspiration. And, while what people find meaningful tends to evolve over long timeframes, it can shift relatively quickly, particularly in response to the kinds of life-changing events that many people are experiencing now as a result of the pandemic, or the more recent racial-justice protests.”2
What is interesting is how this grounding in purpose and direction positively impacts our physical being and health. Numerous studies point to the health-related benefits to individual purposefulness. One study observed that possessing a high sense of purpose could reduce the risk of cardiovascular disease (CVD). One possible pathway to reducing CVD occurs as an individual’s psychological and social resources are strengthened so as to provide a person greater margin against the toxic effects that overwhelming stress has on the cardiovascular system. Other studies pointed to the link between purpose in life and positive health outcomes such as fewer chronic conditions, less disability and reduced mortality. The researchers noted that increased purpose in life provides greater intrinsic motivation to adopt health-related behaviors leading to improved health outcomes.3 The Rush Memory and Aging Project found that those individuals with a greater sense of purpose in their lives were 2.5 times more likely to not experience dementia, 22% less likely to show stroke risk factors, and 52% less likely to have had a stroke.4
Beyond these positive health outcomes, an increased sense of purpose, also improves an individual’s experience in the workplace. In part, this is because there’s an alignment between a person’s own sense of purpose and work that truly matters to them—this particularly applies to companies that are more purpose-driven. For example, many employees report higher levels of satisfaction in their jobs when they work for a purpose-driven organization. In a recent report, EY Global offers that “truly integrating purpose into strategic, daily decisions and actions is a critical part of attracting, motivating and retaining key staff.”5 A New York University study observed that purpose-oriented employees (people who view work as a source of personal fulfilment and a venue from which to help others) compared with non–purpose-oriented employees experienced 64% higher levels of fulfillment in their work, 50% more likely to be in leadership positions, and 47% more likely to be promoters of their employers.6?
It is no surprise, then, that this results in benefits for companies that are purpose driven. The EY Global report added, “A clear purpose, based on human values – that is authentic and consistent with businesses’ actions – is a foundation stone upon which reputation and performance are built.”? A Cone/Porter Novelli study observed that 77% of respondents felt a stronger emotional connection to purpose-driven companies over traditional companies. They also noted that 68% would switch from a product they typically buy, to a new product from a purpose-driven company.7 Purpose in business creates value for customers, inspires innovation, and generates greater financial returns for shareholders. A study of fifty companies across three sectors found that those firms that scored high on a purpose-focused measure generally ranked higher in total shareholder returns.8? Interbrand’s study noted that brands with a purpose targeted toward improving quality of life outperformed the stock market by 120%.9 In their 2021 Best Global Brands report, Interbrand suggested that the key internal factor to determining brand strength aligned with several purpose-related factors such as direction (having a clear purpose and ambition for the brand), alignment (the whole organization pulling together in the same direction), and empathy (actively listening and responding to customers and other stakeholders evolving needs).9
In their book, Good is the New Cool: Market Like You Give a Damn, Afdhel Aziz and Bobby Jones suggest that millennials (those born in the early eighties or mid-nineties) and Generation Z (those born in the mid-nineties) have new expectations of brands.10 This includes purchasing products that have a social or environmental benefit, or working for companies that are more stakeholder driven. Findings from Deloitte’s Global 2022 Gen Z and Millennial Survey suggest that these generations’ level of satisfaction with their company’s commitment to social impact, diversity, and sustainability have a direct impact on job loyalty.11
Tracy Brower offers, “Companies who can develop a strong purpose, but also help people see how they contribute to it, will reap the greatest rewards in terms of employees who provide discretionary effort and wake up energized for their day.”1 Hayley Leibson adds that not only are purpose-driven companies likely to have more motivated and engaged employees, they will also have more thrilled, satisfied and ultimately loyal customers, along with improved business results.12
The Purpose-Driven Organization
So, what do we mean by purpose, particularly in a corporate and organizational context? Ashley Brice, the CEO of BrightHouse–a global consultancy firm focused on purpose consulting, distinguishes purpose from mission and vision.13 She suggests that both are critical: mission refers to what we do every day and vision speaks to where we are headed. While these two drivers are important, their time horizon is temporal–perhaps three to five years. In contrast, purpose is timeless because it reflects our “why.” It emerges from our ethos–who we are at our very best and the aspirational role we were meant to play. In the same vein, Ha Nguyen of the Omidyar Network14 describes purpose as wanting to make a difference and in so doing, leaving a legacy behind through meaningfully helping, giving, and serving others.?
Echoing the notion of aspiration’s role in purpose, Afdhel Aziz and Bobby Jones suggest that “the best definition of purpose is ‘an aspirational reason for being that inspires action that benefits shareholders and stakeholders as well as local and global societies.”9 Max Lenderman offers that purpose has become the new digital.15 In other words, we now expect a lot more from brands and companies.? We want companies to make the world better. If we have a choice between two competing companies—it’s increasingly likely that we’ll choose the company grounded in purpose. This means integrating purpose into all aspects of our companies—supply chain, recruiting, product development, marketing, etc. Ultimately, this involves reimagining business as a force for good and seeing capitalism as an incredible vehicle for change.
In his 2018 letter to CEO’s of companies they invest in, Larry Fink—CEO of BlackRock wrote, “Without a sense of purpose, no company, either public or private can achieve its full potential…society is demanding that companies…serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders…”16 Fink adds, “Purpose creates a unifying vision for all of a company’s stakeholders, including its employees, customers, partners, and shareholders. It drives ethical behavior and creates an essential check on actions that go against the best interests of stakeholders. Finally, it’s a powerful driver of culture, providing a framework for consistent decision-making throughout an organization, which ultimately helps sustain long-term financial returns for the company’s shareholders.17
Stories of Purpose
This background on the power and impact of purpose provides the context from which purpose-driven companies emerge. The stories which will emerge over the ensuing months will provide us with practical insights from a variety of leaders who will share their experiences and lessons learned. To begin this series of white papers, we’ll introduce you to several purpose and impact-oriented companies and organizations including: the Leftovers Foundation, Chandos, Righteous Gelato, Helcim, and Interior Services.
The Leftovers Foundation’s mission is to reduce food waste and increase access to food across Canada. Its founder, Lourdes Juan, describes her journey toward building an organization with purpose as one that deeply depends upon “the voices of other stakeholders and those individuals who didn’t always have a voice.” She highlights the importance of servant leadership, talking to communities, and not trying to solve problems in a silo.
In addition to Leftovers, Juan has created several social enterprises—a special type of purpose-driven organization that is predominantly impact-oriented and that uses a revenue model to finance its operations. Regarding the social enterprise model, she adds, “A social enterprise is when the amount of income in an organization increases, so does the impact. And so you don't have this flatlined impact. You're really building the business to make sure you have an appropriate amount of income and an appropriate amount of impact, and those two are correlated. Social enterprises, to me, are fascinating because they should have this underlying notion of purpose, of doing good in some way."
Chandos is one of North America’s most innovative and collaborative general contractors. They are 100% employee owned and are proud to be the first and largest B-Corp Certified commercial general contractor in North America, meaning they put their values at the centre of everything they do. Chandos continuously innovates by championing Collaborative Construction—leading to more efficiency, cost savings, and a much better working experience for everyone. Their recent Canada-wide event, Our Possible Future, invited companies to consider what it would look like to build a prosperous and sustainable future. Chandos President, Tim Coldwell, challenged participants with the question, “What if more of the construction industry used their supply chain as a force for good?”?
Righteous Gelato, chosen as one of Canada’s Top 100 Small and Medium Employers for 2022, describes themselves as “not just a gelato company. We are far more than that.” In an interview with the Purpose and Performance Project, James Boettcher (founder of Righteous Gelato) said,?
“So our mission is, in our constant pursuit for greatness, to enrich people's lives one tiny spoonful at a time. This constant pursuit of greatness is about a journey. There's no destination. You don't stand on the top of greatness. It's forever. And then, enriching people's lives…has been my personal mission for most of my life since I can remember. The idea around it is, if you have people in your organization that are enriched, then they go home and enrich the lives of those in their family and in their community.”
Boettcher adds, “I come back to this simple phrase, build the company you want your mom or dad to work for. And the reality is that when you make decisions every day that are guided by such a simple principle–this influences how you treat your people, where you invest, and the things that are important to you as an organization– whether it's sourcing ingredients, an ethical practice there, or giving people paid time off to do things in the community.”
Another purpose-driven company is Helcim, a payments processing company. Their mission is to be the world's most loved payments company. They describe themselves this way:?
“We’re relentless in our pursuit to raise the bar and deliver a service that redefines what a merchant should expect from their payments company. We believe that by creating an easier, smarter, and more affordable payment solution, we can enable more businesses to get paid and grow. And when small businesses thrive, we all succeed.”
Helcim’s founder, Nic Beique, told us (in reference to Afdhel Aziz and Bobby Jones’ work, Good is the New Cool: The Principles of Purpose18), "Here's why I think it will actually happen—it’s because the new generation of people are more and more focused about being mission-driven. And ultimately the best people will gravitate towards the companies they actually believe in. When you have the best talent, you can also become one of the best companies and most successful companies. So I do think that the era of a company winning at all cost will ultimately be facing competitors that have better staff because they will be competitors that are more mission-driven.”
Interior Services is a window-covering services and product company serving the construction, design, and property management communities in the greater Los Angeles area. In addition to delivering superior service to their clients, their goal is to also influence their industry. When asked how they might do so, Kurt Luginbuhl, President of Interior Services, offered, “This happens organically through how we run our projects and how we interact with our customers. It’s about really trying to elevate greater transparency and trust in the industry.”
Throughout the stories of these five business leaders, we’ve heard about doing business in a way that stands out. The manner in which they have done so or are moving towards is by embedding purpose within their organizations and those they interact with.? In addition, purpose influences the why and how behind these interactions. Of course, becoming purposeful and practically carrying it out is not without its challenges. Luginbuhl adds, "I do think there is a generational shift. At the same time, it is hard for us to push through the default [direction within our industry] and imagine a future where we really do have impact and influence, but we're pushing in that direction and still believing.”?????
It is indeed a journey and process.?
Challenges with Purpose
In a world populated with companies and organizations of all shapes, sizes, and values, it is important to recognize as a business founder and leader why you exist, what you stand for, and how your company, your people, your products or services will positively impact the world around you. Becoming a purpose-driven organization isn’t simply window dressing to look good to your stakeholders, nor is it merely a marketing strategy.
In the EY Global report, Mark Weinberger, CEO of E&Y observes that “the hard part—the real test of an organization’s purpose—is figuring out how to make it more than just words in a memo. For purpose to really matter, it needs to go beyond an initiative that sits on the margins of the organization.”4 There needs to be legitimate action that originates from an integrated sense of purpose. The challenge that emerges with purpose becoming the new digital are the tendencies for companies to use it as a vehicle to simply appease regulators and to look good before its stakeholders. Jessica Camille Aguirre argues that “People are really fed up with this level of virtue signaling that we’re seeing in corporate America right now. Your CEO can put out a beautifully written statement on why Black lives matter, but if the organization isn’t actually backing that up with the way that it behaves on a daily basis, then it’s kind of bullshit.”19
Larry Fink notes that, “Articulating a clear purpose is the easy part. It’s the how that’s always the most challenging element for CEOs and other business leaders. Creating durable value for multiple stakeholders while also delivering for shareholders and clients is often a Herculean task. You need a framework for making difficult tradeoffs and the ability to mobilize people both inside and outside your company.”20 He adds, “...leaders must make quite a big leap if they are to go from talking about purpose to truly absorbing and actualizing it.”21
As we listen to more of the stories from other impact-oriented and purpose-driven organizations, we will gain an inside look at how these organizations carry this out. And because, “deep purpose is an ongoing process to which leaders must commit with all of their heart and soul,”22 they won’t get it right the first time. It’s a process and we’re all learning. But that’s the beauty of the Purpose and Performance Project. It’s the opportunity to learn from one another.
At the Purpose and Performance Project, our goal is to come alongside those individuals and companies who are committed to travel this road toward increased purpose and impact. Please feel free to share this white paper with others and invite them to journey with us. Future white papers will be released through our website, PurposeAndPerformance.org. You’ll also find on the site a series of shorter articles offering ideas on maximizing both individual and corporate purpose and performance.
As we consider the impact that business could have on society, we leave you with this challenge offered by Jen Hancock, Vice President of Collaborative Construction at Chandos, “Is the world a better place with your business in it?”23?
We look forward to our journey together.
Footnotes:
1? Brower, Tracy. “The Power of Purpose and Why it Matters Now.” Forbes. August 22, 2021.?
2 Dhingra, Naina, Jonathan Emmett,? Andrew Samo, and Bill Schaninger. “Igniting individual
?purpose in times of crisis.” McKinsey Quarterly, McKinsey & Company, August 18, 2020,?
3 Kim, Eric, Scott Delaney, and Laura Kubzansky. “Sense of Purpose in Life and Cardiovascular?
领英推荐
Disease: Underlying Mechanisms and Future Directions.” Current Cardiology Reports.?
10.1007/s11886-019-1222-9, 2019.
4 Bennett, David, Julie Scheider, Aron Buchman, Lisa Barnes, Patricia Boyle, and Robert Wilson.?
“Overview and findings from the rush Memory and Aging Project.” Current Alzheimer?
Research. Vol. 9, 6, 646-63, doi:10.2174/156720512801322663, 2012.
5 Ernst & Young Global Ltd. “Why business must harness the power of purpose.” EY Global.?
December 15, 2020.
6 Imperative. “2015 Workforce Purpose Index”. Imperative and New York University. 2015.
7 Cone and Porter Novelli. “2018 Cone/Porter Novelli Purpose Study: How to build deeper bonds,?
amplify your message and expand the consumer base.” Cone and Porter Novelli. 2018.?
8 Carlisi, Cathy, Jim Hemerling, Julie Kilmann, Dolly Meese, and Doug Shipman, “Purpose with the
?Power to Transform Your Organization.” Boston Consulting Group. May 15, 2017.?
9 Interbrand. “Interbrand Best Global Brands 2017.” Interbrand. 2017.?
10 Aziz, Afdhel, and Bobby Jones. Good Is the New Cool: Market Like You Give a Damn. Simon and Schuster. 2016.
11 Parmelee, Michele. “Don’t want to lose your Gen Z and millennial talent? Here’s what you can?
do”. Deloitte. May 18, 2022.?
12 Leibson, Hayley. “The Power of Purpose-Driven”. Forbes. January 25, 2018.?
13 Grice, Ashley. “The Power of Purpose in Business”. BCG BrightHouse. May 6, 2022.?
14 Omidyar Network. “Home.” Omidyar Network. 2022. https://omidyar.com/
15 Project Drive. “Purpose is the Shark”. Project Drive. October 2, 2019.?
16 Fink, Larry. “Larry Fink’s 2018 Letter To CEOS: A Sense of Purpose.” BlackRock. 2018.?
17 Fink, Larry. “Forward.” Deep Purpose: The Heart and Soul of High-Performance Companies, by?
Ranjay Gulati. New York: Harper Business. p. xii. 2022.?
18 Aziz, Afdhel, and Bobby Jones. GOOD IS THE NEW COOL: The Principles Of Purpose. Conspiracy of?
Love. 2021.
19 Aguirre, Jessica Camille. “‘People are fed up with this level of virtue signaling’: Corporate America?
is in a P.R. meltdown over the Black Lives Matter movement.” Vanity Fair. July 22, 2020.?
20 Fink, Larry. “Forward.” Deep Purpose: The Heart and Soul of High-Performance Companies, by?
Ranjay Gulati. New York: Harper Business. p. xii. 2022.?
21 Fink, Larry. “Forward.” Deep Purpose: The Heart and Soul of High-Performance Companies, by?
Ranjay Gulati. New York: Harper Business. p. xiii. 2022.?
22 Gulati, Ranjay. Deep Purpose: The Heart and Soul of High-Performance Companies. New York:?
Harper Business. p. xii. 2022.
23 Hancock, Jen. Our Possible Future Event. May 17, 2022.?