In my recent study of corporate purpose for The Conference Board (TCB), I conclude that, “Purpose is a key element in the corporate narrative—the story a company continually tells to its various constituencies [i.e., stakeholders]. It is, in short, why the company exists. While different organizations have varying ideas of what constitutes Purpose, The Conference Board offers this simple description: Purpose is why the company does what it does.”
Purpose is the driving element of the enterprise narrative: its keystone, its heartbeat, its lynchpin — choose your favorite metaphor. TCB researcher Thomas Singer defines the narrative as consisting of four integrated pieces: Purpose (Why we exist); Mission (What we do); Vision (Our goal); and Values (How we do things.)
A powerful Purpose can be sometimes be scaled down to a single phrase. Three institutions near and dear to me do this especially well:
Formalized Statements of Corporate Purpose (SCP) are beginning to gain traction as a powerful management tool. Singer found that, by the end of 2020, 24% of the Global S&P 1200 had formal SCPs — and that this number is growing rapidly.
Well-articulated SCPs benefit a range of stakeholders, including:
Corporate purpose is closely related to personal purpose — or, should be in order to be most effective. The question that each of us tacitly asks ourselves, “What am I doing here?” is part of the larger “What are WE as a group doing here — and how do I fit in?”
In my recent interview with Dr. Madelyn Blair, she tells me she used these as key performance counseling questions when she was an executive at the World Bank. She even devised a test as to whether certain expenditures were sufficiently “on Purpose.”
Enterprises and individuals should each have clearly articulated purposes — and not stray far from them. Each product should have purpose. Even each meeting should have a clear purpose.
I worked recently with two nonprofits in the education services field. Similar industry — but big contrast in culture and results. One had high engagement and morale among employees, and high collaboration across silos. In contrast, the other was relatively low on both these important metrics.
In the former organization, the Purpose statement was emblazoned behind the headquarters reception desk — such that each employee walked past it on the way in. Even as a contractor, I felt ownership of my client’s Purpose. (Yes, that was in pre-pandemic days.)
In the latter organization, Purpose did not seem top-of-mind to most employees. Low individual engagement resulted in poor morale, which in turn drove tangible adverse metrics like climbing sick days and paid overtime. A coincidence? Perhaps — but our intervention for this client included specific steps for addressing shortfalls in perceived individual purpose among employees.
Purpose that sticks doesn’t just happen — it takes planning and sustained work. I’ve done it successfully for a nonprofit client, and less-than-successfully for a large corporate division. (This latter because we discovered that they had deeper problems that an SCP would merely dress up, not fix.)
To do purpose right, these steps are essential:
Though it’s not a panacea, a clearly-articulated enterprise Purpose typically provides these benefits:
Few things worth achieving are easy or painless. What are some of the potential downsides of Purpose?