One of the most common misconceptions about purpose is that it’s something squishy and weak, that it’s only for lighthearted organizations. This couldn’t be further from the trust.
Being a purpose-driven organization is not about having a feel-good culture, but about solving complex problems. People want to be challenged. They want to be part of something bigger than themselves.
Having a clear purpose comes at a price, however. Strategy is, after all, the art of sacrifice. And these words reign true even when it comes to your company culture. What you say “no” to is just as important as what you say “yes” to.
Purpose is much more than words; culture is created through action. It is the courageous organizations that put their money where their mouth is.
Culture is the behavior you reward and punish
Purpose is the heart of a company; it inspires, energizes, and gives life to the organization.
Purposeful companies succeed at driving innovation and transformational change, according to EY. 84% of executives say having purpose increases their ability to transform, while 80% say it helps increase customer loyalty.
Your organizational purpose is not its vision or its mission statement.
A company vision is usually ego-focused; leaders puff out their chests with terms like “best in class,” “desire to win,” or “biggest.” Conversely, a purpose is people-focused — it’s more reflective, more connected, it’s more human.
Daniel Pink defines purpose as the yearning to do work in the service of something larger than ourselves. People want more than just a paycheck, and working toward something that matters is the highest form of motivation.
Companies are modern tribes. Achieving a sense of belonging and purpose makes people more productive and engaged. It’s a win-win for the individual and the organization.
Purpose is about service, not being self-serving. It’s about having a world view and acting accordingly. For example, the American Red Cross’ exists “To prevent and alleviate human suffering in the face of emergencies.”
Not every purpose has to be altruistic, though. However, it must create a positive impact on people’s lives.
Purpose is the reason for your existence — why you do what you do and why it matters. One of the key principles of the Culture Canvas Design is that your purpose should guide the behavior you reward or punish.
Southwest Airlines’ purpose is “To connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.” Its “Bags Fly Free” campaign demonstrates that commitment — the airline has consistently never charged for checked bags.
It pays off to put your money where your mouth is. When promise and behavior are in sync, customers give companies twice as much share of wallet (47%).
However, being a purpose-driven organization is neither easy nor cheap.
Your company’s purpose will cost you
Like any choice, a company’s purpose comes with an inherent cost.
Simon Sinek once said, “There is a cost for the money we make and sometimes the cost is not worth it. That goes for companies and individuals.”
Patagonia’s purpose statement was, “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”
However, the company believed it could create a more significant impact.
“We don’t just seek now to do less harm, we need to do more good,” said Rose Marcario, CEO of Patagonia, at the National Retail Federation 2019 conference.
The outdoor clothing company updated its purpose to a more concise, daring one: “We’re in business to save our home planet.”
An organizational purpose needs to be firm — a mandate rather than a suggestion. It should affect every aspect of your business, from business priorities to company rules and decisions.
Patagonia sued the U.S. administration for flexing on the rules that protected National Parks. And then it made another bold move by endorsing two US Senate candidates who vowed to protect public lands.
When CVS decided to stop selling tobacco products, most people thought the company went crazy. When its CEO first announced the move in February 2014, it warned sales could take a $2 billion hit.
But Larry Merlo’s message was loud and clear, “Put simply, the sale of tobacco products is inconsistent with our purpose.”
CVS was courageous enough to act consistently to its purpose: “Helping people on their path to better health.”
Putting purpose ahead of profit proved to be the right call. CVS not only stayed true to its promise but they transformed people’s behavior for the better. Its customers became 38% more likely to stop buying cigarettes altogether.
The retailer even managed to offset the short-term loss and continued growing. CVS’s 2019 earnings crushed Wall Street expectations.
A healthy culture needs action, not words
Being a purpose-driven organization is not a fad but a win-win for business and people alike. Start at home; inspire people to do work that inspires them. It will create a domino effect.
Your purpose should drive your operations, priorities, and growth — not just your advertising. As I tell my clients, you’re either a purpose-driven organization, or you are not. There’s no middle ground.
Be ready to uphold your promises. A purpose that costs you nothing is not worth having it.
Gustavo Razzetti is the creator of The Culture Design Canvas and CEO of Liberationist, a change consultancy that future proofs your organizational culture.