Why purpose is crucial to organisational success

Evidence shows that organisations with a clear purpose grow faster*. But what does 'purpose' really mean, and how does it balance with profit? And why should boutique consultancies strive for a purposeful future? I recently spoke to three experts on the subject to get their views.

What we mean by purpose?

Sarah Evans summarised purpose as:

Why does purpose matter?

Purpose matters for both people and organisations. Sarah, a sustainable transformation specialists?and puts it down to the fact that humans are tribal, and that businesses are formalised tribes – as such, finding purpose benefits us individually and collectively. Studies show that people with purpose live longer, healthier lives. ?And having a shared purpose has been shown to translate into the workplace in important ways: faster growth, better engagement, and more productive staff.

Purpose-driven companies experience better growth

An interesting?Harvard Business Review?study states that ‘Purpose-driven companies experience better growth, global expansion, and success in major transformations’. The statistics speak for themselves: 52% of purpose-driven companies saw over 10% growth, compared to 42% of non-purpose-driven companies. They also benefited from greater global expansion (66% vs. 48%), more product launches (56% vs. 33%), and success in major transformations (52% vs. 16%).

How to avoid the purpose pitfall

There have been some high-profile cases of orgainsations retrofitting the ‘Why’ after developing the ‘What’. In its worst form ‘green washing’ is a high-risk strategy. The learning – any purpose driven strategy needs to be authentic, box-ticking can have the opposite impact.

Sarah suggested that the key is to find the human need at the end of the value chain. For example, rather than promoting innovation in food science a different expression of the same work might be?‘fuelling innovation that helps to feed the nation in a sustainable way.’ Helpful questions to assist consultancies define their purpose in terms that relate to the end of the value chain include:?“What is the point of our business?” or “What have we got to give?” these questions can lead to more meaningful discussions about purpose.

Does purpose have to be about saving the planet?

One could argue that businesses have always had a moral obligation to have a purpose rooted in social and environmental causes however this has now ?become a commercial obligation. As a result of increased consumer awareness, shareholder pressure, and demands from a purpose-driven generation, businesses are at serious risk of being left behind unless they embrace this movement.

Failing to act will lead to business loss in 1-2 years

The number of UK consultancies achieving B Corp status has doubled, improving their business success and attracting talent and investment. Organisations are starting to insist on measured carbon footprints, and “failing to act will result in business loss within 1-2 years”. Mark Jankovich , Founder and COO of Delphis Eco , was excited about the potential role for consultancies sharing that, “Consultancies are core to being able to navigate today’s challenges, if you like change, you’ll thrive on this”.

For good AND for profit – a balanced view

While there is no doubt that the world needs businesses to take action, purpose and profit don’t have to be in conflict. In fact, quite the contrary, as Peter Czapp , co-founder of The Wow Company says, “We will not get very far without profit: It is the fuel for the journey.”

So, in summary, being more purpose driven will likely be a major contributor to your growth journey provided it comes from an authentic place whilst simultaneously enabling you to make a bigger difference – what’s not to like?!

What next? Top tips from the panel

1. Ask questions to be clear on your purpose.?Read these questions?from Sarah Evans at Cogent Action to get you started.?
2. Calculate your climate impact, start by measuring your?Scope 3 emissions.?You can’t manage what you haven’t measured.
3. Get a strategy framework in place to help you deliver on your purpose.?The B Corp assessment and certification process sets a standard,?find out more here
4. What does ‘doing good’ look like for business? Here are the top 3 changes you can make.?Invaluable insight from Karen Sutton , founder of Global Good Awards

*Consultancy BenchPress report 2024

Consultancy BenchPress 2024

Discover the latest consulting industry benchmarks on purpose, operating profits, strategy and much more. With pinpointed insights to solve your biggest challenges and build your transformation plan.

Thank you to Nicky O'Malley , Sarah Evans and Mark Jankovich for speaking to me.