Whether it’s PwC appointing a Chief Purpose Officer, Boston Consulting Group buying up purpose agency BrightHouse or EY teaming up with purpose guru Simon Sinek, the big beasts of business consultancy are suddenly piling into the purposeful business movement.
But is "purpose" just the latest buzzword on the block? Will you be laughed out of the boardroom if you start advocating a purpose-led business transformation?
Allow me to make the case in favour of corporate purpose. The evidence shows that purpose works. I believe that any firm can supercharge its competitiveness through the power of purpose, as long as it makes a genuine commitment to transform itself.
But what is it?
Let’s quickly define what we mean by ‘purpose’. It’s not the same as CSR, which is typically bolted onto a company’s main activities. Nor is it the same as ‘sustainability’ (an outcome, not a purpose) or ‘ethical business’, which is more about avoiding unethical practices.
Purpose is the reason your company exists other than to make money - your ‘purpose beyond profit’. Wait, come back! It’s absolutely not about ignoring profit. It’s about powering profit and performance by tapping into the deeper benefits your core business activity offers the world.
There is plenty of hard evidence that, when done right, a strong sense of purpose can deliver outperformance. In fact, a recent London Business School report estimated that a more purposeful approach to business could add £130 billion to the UK economy.
Purpose should be transformational
Senior managers must recognise that purpose is supposed to transform your business from top to bottom. Think of it as something akin to a capital investment.
If standing at the top of the ski jump doesn’t evoke a little tingle of positive, can-we-really-do-this fear, then you probably need to be more ambitious in how you want purpose to change your business.
By extension, the purpose itself has to be audacious. As you define your corporate purpose, ask yourself – is this something that can be done and dusted in five years, or does it provide us with an inexhaustible supply of stretch targets?
Unilever’s purpose of ‘making sustainable living commonplace’ is a great example of a purpose that creates perpetual stretch.
It can never be achieved once and for all, but it is driving Unilever’s business forwards (and its share price skywards) step-by-step through constant innovation and business transformation.
Purpose has to be grounded in reality
For purpose to be effective, it must be fully aligned with your business strategy and deeply rooted in the political, economic, social and technological reality in which you operate.
How are your customers’ lives changing? Who are your customers of the future? Above all, what do you do well, how does it benefit others and how can you continue to make that profitable?
It’s essential to root your purpose in rational data, emotional intelligence and business context, and then find the territories you can feasibly go after.
Be prepared to be held accountable. To be credible, your purpose must be mapped against clear and measurable goals. If your purpose to promote healthy eating, how much sugar will you cut from your products and by when?
Purpose needs the whole senior leadership team behind it
This is the number one reason why some purpose-led business transformations fail. Without the full backing of the entire leadership team, it is very difficult for purpose to take root. This is why purpose can’t ‘belong’ to just the PR or sustainability team.
The CEO, finance director, HR director, operations director and marketing director all have to commit to working together to bring the company’s purpose to life, inside and out. This means acting as a genuine leadership team, as opposed to a ‘team of leaders’.
Ignore these three truths and yes, your ‘purpose’ will just be corporate jargon. But if your purpose is audacious and transformational, securely tethered to the realities of your business and backed by an ‘all-in’ commitment from your senior management team, then you will be able to reap the commercial benefits.
Steve Fuller is co-founder of branding agency The House.