CEOs and economists agree: Purpose-driven organizations are the future. But what does it mean to be a company with a purpose and what are the benefits?
Giving our existence and actions a purpose and meaning is a basic human need. As generation Y entered the job market, having a purpose began to grow from an individual personal desire to a complex economic factor: Workers search for employers whose principles align with their own. Simultaneously, consumers are increasingly aware of the purpose (or lack thereof) of a company when making purchase decisions.
In reaction to this development, many companies have started to shift from focusing solely on their economic value in terms of sales, growth and profit, to contributing to a bigger purpose as a part of society. They are not just offering a service or product anymore: They also establish strategies that have a social or environmental impact. This “purpose-beyond-profit” approach means that not only the company itself thrives but that it also helps others thrive – be it their employees, their customers, other organizations or society at large. The key to success is authenticity and longevity: Corporate purposes like sustainability or social justice cannot be mere marketing tools or singular campaigns, they need to be embedded into the organization’s DNA and act as a main guideline for all corporate decisions.
Standing for something as an organization is not just about creating a nice image: It can set a company apart from the competition, make it relevant and lead to long-term success. Studies have shown that purpose-driven brands grow up to three times faster than brands without a clearly communicated and owned purpose. The two main factors contributing to this growth are:
Purpose-driven initiatives are most effective when they are individually tailored to a company. Still, there are universal ways in which every organization can contribute, e.g.:
Becoming a purpose-driven organization is a long and complex process that often requires fundamental changes in a company’s practices and principles. This can be a big challenge for established organizations with vast numbers of global branches. One of the results of these difficulties is an “intention-delivery gap”: There is a discrepancy between the proclaimed goals and the actual actions implemented to get there. The inability to close this gap can have serious consequences: Through the growing transparency and flow of information via social media, the public is well informed about corporate behavior and quick to take action when unsatisfied.
The beginning of the Covid pandemic was an abrupt economic turning point: While more and more employees question the purpose of their work, many of them did not have the luxury of choosing a purpose-driven job or work environment anymore. While this crisis should remind us that you don’t have to rely on a job to give your life meaning and fulfillment and that every kind of work has value and dignity, it gave purpose-driven organizations the chance to follow up their words with actions: Many companies chose social responsibility over short-term profit by setting up assistance and relief programs for their employees and those in need.
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With our short interview series we want to give you an insight into the daily work of our clients and partners. First off is Una Clifford-Bahçecik, who works as Senior DE&I Advisor at the European Investment Bank (EIB).