The world is changing, and so is the sports industry. Tapping into the power of Purpose

COVID-19 pulled the spotlight on the nature of sports organizations as fans and supporters want to know what the organizations they follow are doing for, with, and to the world. Hands down, the need for sports organizations to show that they are good members of society and that they are striving to add value to all their stakeholders has never been greater.

Many organizations are now acknowledging that to survive in this ever-changing world they must integrate a social commitment and a long-term vision into their corporate agenda, as well as demonstrate that they contribute to the positive development of society.

Therefore, the growing trend towards sports organizations with purpose is becoming a basic feature within the new environment we live in. Society’s expectations are growing and the long-held assumption that sports organizations exist just to make money or to achieve sportive success is being challenged.

In other words, nowadays, one of the key virtues or qualities of an enduring organization is to showcase that they exist to serve a purpose that is larger than the organization itself. 

Placing purpose at the center of the organization (Corporate Purpose)

Broadly speaking, corporate purpose refers to the organization’s role in society, linked to long-term value. A clear purpose is everything to an organization, it is its soul and identity and offers a platform to build upon and communicate the reason for its existence and the problems to be addressed and, if possible, solved by such organization.

In contrast to mission and vision statements, which deal with the “how” and the “what” (what do you want to achieve, how do you want to achieve it), purpose statements take on a deeper meaning that stand for the reason of existence of an organization, the “why”. Why does an organization exist? Why does it do what it does? The “Why” deals with a good greater than the organization itself.

Leading successfully with purpose is more than adopting these types of statements and making public commitments to do well in the world.

Every single sports organization must have a purpose beyond sportive success or even profits, that will allow them to stand out from their competitors. Sports organizations are being pushed and tested to contemplate the interests of all their stakeholders, including fans, supporters, employees, and athletes. Now, more than ever, purpose has the power to engage and inspire athletes and employees, boost fan loyalty, and help to outline a plan for sustainable, meaningful growth.

The moment for sports organizations to activate their “purpose” is now.

Linking purpose to corporate strategy

An organization’s purpose should communicate, be integrated, and linked to the organization’s core business strategy; the purpose and core business strategy should be one.

To design an effective purpose strategy, which truly becomes the heart of the organization, it is important to take the following steps:

• Start by taking a hard look at the relationships among your social and environmental impact.
• Define a clear purpose for your organization (try to be bold yet grounded by what the organization can truly deliver).
• Communicate your purpose in terms of the long-term value created for your stakeholders. This means focus where it matters the most.
• Dig deep to assess your own culture, the level of engagement of your own people, and the degree to which they feel empowered to bring their best selves to work.
• Use purpose as a lens for making decisions all around your organization to close the gap between what the company says and does. Do your choices align with your identity?
• Communicate not only your decisions but also the rationale for them (and the trade-offs you considered).
• Ensure that activities and internal processes are coherent with your purpose.

Essentially, a truly purpose-driven organization must have purpose as its guideline for decision-making to generate long-term value for its stakeholders.

How Purpose creates value

Striking consensus has emerged about the importance of purpose for organizations and brands, and its strong connection with profit and performance. Research has shown that by acting on their purpose, businesses can create more value for their shareholders and society over the long term than by pursuing simply monetary goals.

Plus, purpose has practical implications for organization’s financial health and competitiveness. In his 2020 letter to CEOs, Larry Fink of BlackRock wrote, “A company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders.”

Main benefits:

• Recruit, retain and motivate employees and build employee brand advocacy.
• Enhance financial performance.
• Increase access to capital and manage risk.
• Strengthen Third-Party relationships and enable collaboration.
• Increase innovation and resiliency and enable business transformation.
• Attract and retain customers (fans and supporters) and build brand loyalty.
• Encourages long-term thinking and helps organizations navigate uncertainty.

As a result, many organizations are now putting purpose at their core and applying the power of the organization to generate positive impact on communities and the environment, and at the same time boost organizational performance.

Clearly, there is a strong business case for having a solid, well-articulated, purpose and by tapping into this power, sports organizations can transform the entire field of play.

Sports organizations need to embrace and integrate a multi-stakeholder-oriented purpose to navigate today’s volatile and uncertain environment.