Why purpose?
Since 2015, we’ve analysed purpose at the world’s most powerful brands. We know why it matters. We know when it works. And we know when it doesn’t.
Our findings are fascinating. And disappointing.
The headline? Purpose only works when you live it. But when you do, it can be the answer to your greatest business problem.
What problems does purpose solve?
Businesses that make the most of purpose know it’s more than just a statement. That it’s a living, breathing part of their brand and culture. That it can engage anyone from employees to investors, customers to consumers. That it’s incredibly powerful. And they use it to answer big questions…
How do we attract and retain talent?
Talented people can choose where they go. More and more, we’re seeing evidence that a paycheck is important but not the ultimate goal. What really motivates and attracts people is autonomy, mastery and purpose.
- 74% of LinkedIn members place a high value on work that delivers a sense of purpose (source: LinkedIn)
- 88% of CEOs and 90% of postgraduate students say a business needs a clear purpose to attract the next generation of talent. (Cranfield School of Management)
How can we engage our people?
Purpose is a powerful culture tool you can use to engage your people – it gives them something to believe in, it shows you care about more than profit, and it gets everyone working for the same thing. And that generates big results.
Gallup found that:
- a 10% improvement in employees’ connection with their company’s mission leads to a 12.7% reduction in accidents, 8.1% decrease in staff turnover and a 4.4% increase in profitability
- 89% of executives cite a strong sense of collective purpose as a driver of employee satisfaction (EY & HBR)
- 84% of employees working for organisations with a shared sense of purpose are engaged, compared with 32% of those working in organisations without a shared sense of purpose (CIPD – Chartered Institute of Personnel and Development)
How do we get people to believe in our strategy?
You can use purpose to get people to care about your goals and strategy. It links corporate processes to human values and can help employees see beyond the 9-5 to become more committed and an increase in profitability.
- 82% of employees and executives have more confidence in companies with a strong sense of purpose. (Deloitte)
- Companies with highly engaged employees achieve 2x the annual net income of those with disengaged employees. (Qualtrics)
- 84% of executives believe an organisation that has shared purpose will be more successful in transformation efforts. (EY & HBR)
How do we get people to understand our commitment to the SDGs?
Research shows businesses that recognise the link between sustainable development and success do better in the long run. Putting your purpose at the heart of that connection will help you tell a joined-up, simple story that’s easy for people to engage with.
Purpose gives businesses a platform for engagement with stakeholders, from employees to consumers and investors. Yet 75% of companies still don’t link the SDGs to their purpose. (Deloitte)
In the last five years, companies making a strong commitment to sustainability are estimated to have outperformed competitors in the stock market by 11%. (GreenGiants Book)
How do we improve our business performance?
Purpose should live within a company’s strategy, culture, marketing, CSR and reputation management. The quicker brands understand this, the faster the whole business can benefit from it.
“Nearly two thirds of CEOs told us that emphasising purpose within their business had helped improve the top line: 63% indicated it contributed positively to revenue growth compared to just 4% who felt it had detracted. But this is only part of the puzzle and only one measure of performance. As well as improving revenues, CEOs told us that purpose helps build better employee engagement, brand reputation and customer loyalty, as well as attracting new business partners”. (PwC)
Purpose works. It’s proven. So why the disappointment?
Despite the well-documented business case that proves the value of living purpose, most organisations still aren’t doing it.
In a recent survey by EY: 91% of people said their company has a purpose or is developing one. But less than half believed their strategy was aligned with the purpose. And only 37% believed their operating model and operations were aligned with it. That’s a huge missed opportunity. And it’s something we’ve seen echoed in our research.
Most of the brands we looked at are still struggling to live purpose properly. Yes, they were using it in campaigns. Yes, they had it on their website. But few went beyond marketing. Few put purpose at the heart of their business strategy; few made it part of their performance KPIs; few had it formally acknowledged by leadership as a critical part of their business.
Too many businesses have rushed to achieve the massive cultural, performance and reputational benefits that living purpose can bring. And in this rush, forgotten to consider the impact their purpose should have on what they do, what they measure and how they make decisions.
The rush to be ‘purposeful’ will mean everyone loses
Businesses that are all talk but no action are making it harder to get the very benefits they seek. They’re undermining the value of purpose for the brands that do it properly. Purpose has become nothing more than meaningless marketing jargon. And our research backs this up.
Let’s start rebuilding what the word ‘purpose’ actually means. It’s not just a statement on a website; it’s a commitment made by the business to the people who matter most. It’s not owned by brand or sustainability teams, it’s embraced by the whole business – starting with the CEO. It’s not an idea for a marketing campaign; it’s the reason people choose to work, buy and do business with you, time and time again. Because, with 81% of people believing businesses should improve society (Edelman), it’s time to do something about it.
Purpose is alive. Let’s live it.