‘Purpose’: How it should define your leadership and improve your business

By Dave Hickey

  • 89% of your colleagues are not engaged at work*
  • 82% of US employees say purpose is important to their business but many say their organisations don’t have one **

Imagine if employee engagement moved from 11% to 33%. It’s still low, but three times better than before.

How would 200% better engagement improve productivity, creativity or profitability in your business?

In August last year 181 CEOs agreed a statement which elevated stakeholder interests to the same level as shareholders’ interests. That means that their companies’ obligations to shareholders should not come at the expense of other stakeholders—that is, employees, customers, the community, suppliers, and society.

This is both a reappraisal of purpose and a reflection of tensions that have been bubbling for some time. Customers are boycotting the products of companies whose values they view as contrary to their own. Investors are migrating to funds with strong social or environmental values. And the majority of employees in the corporate world feel “disengaged”; they are agitating for decisions and behaviours that they can be proud to stand behind and gravitating toward companies that have a clear, unequivocal, and positive impact on the world.

Purpose defines the core reason for the existence of an organisation and the positive impact it has on the world. It’s more than its vision because it takes in the potential benefit for all stakeholders.

It shapes strategy, inspires its people, engages its customers and community, steers choices at moments of truth, and is fully embedded in its culture.

We saw great examples of purpose in action during the early days of the pandemic as organisations changed direction to support society’s immediate needs whether it was producing PPE, ventilators or providing meals for under pressure front-line staff.

Living purpose authentically should feel uncomfortable and new. It may mean surfacing fresh questions in meetings, engaging in difficult conversations about some parts of our businesses, and re-evaluating partners based on a clear-eyed view of their practices.

But it is worth it. Organisations which work with their stakeholders to define their purpose have higher employee engagement, greater customer retention and a stronger reputation.

The late Jason Jennings expands on this in a podcast he released last year following that declaration by the CEOs of some of America’ biggest companies last year. You can listen here.

Engaging and leading employees is a key theme of Leading At The Edge Online on 7th October next. Secure your place at this exclusive event here along with access to all presentations for later viewing.

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*2017 Gallup Employee Engagement Report
**2020 McKinsey Survey
Credit: McKinsey Quarterly