For many companies, establishing a sense of purpose means little more than coming up with a catchy slogan that’s useful in marketing campaigns.
Digital disruption, however, is creating such a challenging working environment that staff lacking a clearer sense of direction are at risk of performing poorly.
The tangible financial benefits of instilling a deeper sense of purpose have been demonstrated in various studies, including a new analysis released this week by the BrightHouse division of Boston Consulting Group.
It questioned leaders, employees and customers at 50 companies in the technology, consumer products and financial services sectors. Those who had the highest purpose scores, based on 15 separate factors, were twice as likely to outperform the average total shareholder return.
“Organizations with surface purpose realize none of the benefits of authentic purpose,” the authors wrote.
Benefits, they said, included more energized employees, stronger customer loyalty and, of course, the opportunity to make a positive impact on society.
A separate study conducted by Deloitte in 2014 found that 82% of respondents who worked full-time for a company with a strong sense of purpose were confident their company would grow that year, compared just 48% of those at less purposeful organizations.
“Evidence is mounting that focusing on purpose rather than profits is what builds business confidence,” Deloitte chairman Punit Renjen said.
So what exactly is a company’s true purpose? According to Brighthouse, it’s the point where two fundamental questions overlap: who are we, and what need do we fulfill in society?
For a purpose to be truly genuine, they said, it must contain the following 5 properties:
1. Presence: Is the company’s purpose identifiable and easy to describe?
2. Strength: Does it reflect a real need in society? Is it inspiring?
3. Alignment: Is it reflected in a company’s history, products and the actions of its leaders?
4. Integration: Are all company decisions, such as expanding in new markets, consistent with its purpose?
5. Advocacy: Does it elicit greater loyalty from customers and employees?
Of course, one of the most important aspects of engendering a sense of purpose is investing in identification. CEOs should be prepared to spend time communicating with staff and customers, perhaps through surveys or even one-on-one interviews, to establish what it is that makes their company tick.
By way of example, BrightHouse mentions SunTrust, an Atlanta-based bank that even brought in an astronomer to offer perspectives on the illuminating properties of the sun.
Combined with advice from an expert on forming trustful labor relations, the bank formulated its defining purpose: to illuminate and energize a world in need of financial well-being.