WHY PURPOSE MUST BE AT THE HEART OF BUSINESS STRATEGY

Does your business demonstrate purpose?

We are convinced of the power of business to drive positive change, so it’s tempting to go on the defensive, protecting our field against those who would criticise it. We couldn't tell other companies to find their purpose if we weren't living ours with hearts and minds foremost. We all know, don’t we, of more than one company that deserves criticism for not living their values?: Those whose purpose doesn’t feel authentic for the company; or those who have a strong purpose but do not demonstrate it through their actions.

There are remedies for both of these ailments. The good news is that these remedies are simple. The bad news is that ‘simple’ is not the same as ‘easy’.

Finding an authentic purpose

The arguments for being (or becoming) a purpose-driven organisation are compelling. Companies led by purpose are now?outperforming their competitors by over 200%, and Unilever’s purpose-driven brands continue to?grow nearly 50% faster than the rest of their business . So it’s no surprise that companies often want a slice of this ‘purpose stuff’ – and they want it as quickly as possible. That’s what is behind many of the purpose fails of the past few years: a purpose statement developed by the board, or (even worse) a marketing agency.

Companies that do this have fundamentally misunderstood the nature of purpose. An authentic purpose starts not from what a company has to sell, but from a deep understanding of its role in the world, the unique skills and competencies it offers, and the societal needs it can serve. Articulating a company’s purpose needs to happen from three directions: top-down (strategic direction from company leadership), bottom-up (involving as many employees as possible), and outside-in (engaging those already working to change the world).

Neglecting even one of these inputs can lead to a fatally inauthentic purpose. The marketing team at McDonald’s, for example, presumably didn’t check in with their employees before flipping their famous M logo into a W for International Women’s Day… at the same time as female employees were accusing the company of failing to respond appropriately to sexual harassment claims.

Living an authentic purpose

The risks of failing to ‘live’ your purpose are significant, even if you escape the public backlash that some brands have experienced in the last few years. The longer-term journey is all about placing purpose at the heart of business strategy – and that means transforming operations, culture and even products to ensure they are in alignment.

Importantly, the first people to notice – and care about – a lack of commitment to your purpose will be your employees.?Kin&Co’s own 2018 research ?found that 53% of employees say that their company’s purpose marketing does not reflect reality, and 68% say that talking purpose but not living it has a negative impact on their work, loyalty and/or trust in leaders.

There’s one simple question that reveals immediately how deep purpose goes:?How does your purpose drive your business decisions??Authentically purpose-driven companies will be able to identify – and will likely be promoting – examples of where this has happened.

For example, on the same day as Apple took steps to protect the details of its self-driving vehicle, Tesla released all its patents to help others combat climate change.?Its founder Elon Musk explained ?that the decision was inspired by the company’s purpose: “Tesla Motors was created to accelerate the advent of sustainable transport. If we… inhibit others, we are acting in a manner contrary to that goal.”

There are still too many companies who don’t get purpose right – whether it’s through public promises that are not lived internally, programmes that don’t have a measurable impact, or lobbying positions that don’t align with company values.

Every time one of these examples hits the headlines, it’s bad news for all of us. That’s why we must be (constructively) critical of those companies who are not articulating and living an authentic purpose – and help them to find a better way forward.