TUESDAY 13 JUN 2023 11:01 AM

WHAT IS THE PURPOSE OF PURPOSE?

Bladonmore CEO Richard Carpenter, and director of sustainability David Willans, argue that purpose-driven entities need to think beyond - and deliver more than - just a statement.

There was a time, a few years back, when you couldn’t move for purpose statements and purpose thinking. Every company wanted a purpose – a reason for being. They wanted to show how on point they were with the times; how connected they felt with their employees; or how, say, they drove thinking on climate change, Black Lives Matter or some other issue that made them feel connected to a wider social or environmental being, rather than simply a business in pursuit of profit.

All well and good. And we don’t want to knock it – we and many other agencies have done very nicely out of helping executives realise that there should be a wider rationale for being.

Many of these initiatives resulted in simple purpose statements that paid little attention to what was going on inside the business on a day-to-day basis. The feeling seemed to be that you could tick a box with a shiny new statement and then it was job done.

The reality – a few years down the line – is beginning to show. Some companies fast forgot their purpose when times of economic woe hit. Some of those changes of heart were engendered by the pandemic, other by resultant supply-chain squeezes, inflationary tendencies or a variety of economic and geopolitical challenges of recent times.

But that misses the point. Purpose should be a statement of the value a business creates beyond profit. Sometimes that is about sustainability; sometimes it isn’t. Whatever the approach, it shouldn’t rule out a profitable business – that is the raison d’etre for business as a whole. You can’t have a purpose as a business if you go out of business.

In truth, purpose should set the direction beyond profit. Combined with values it should create a framework to help align decision-making across an organisation. It is a statement of direction and commitment, which, when done well, inspires the people inside the brand. A good one has two key components — role and outcome. Examples include Disney’s ‘to make people happy’, Ikea’s ‘to create a better everyday life for the many people’ and Zappos’ ‘to provide the absolute best service online, not just in shoes — in any category’.

These statements, together with brand values, are internal tools that build culture, which drives innovation and enables aligned decision-making that improves productivity and employee retention. They become part of the brand in the same way a sense of purpose shapes an individual’s brand. Gandhi said it best: ‘Your beliefs become your thoughts, your thoughts become your words, your words become your actions, your actions become your habits, your habits become your values, your values become your destiny.’

Unfortunately, we’re increasingly seeing purpose being used as an excuse for bad behaviour and bandwagon jumping. Make your logo rainbow, put out a statement for Black Lives Matter, run a panel for IWD. These gestures, while well-meaning, tend to be quickly called out when the diversity of boards and leadership teams are assessed, or gender-pay comparisons are seen, or budgets for speakers at IWD are asked about.

So, a few years down the line, what is the purpose of purpose in today’s world? For us, purpose remains a tool. When well defined and communicated internally, the benefits keep on coming. Linked to that, we believe that communicating it externally is a must from a recruitment perspective, at the very least. But whether that helps define and drive the business for the leadership teams of the future is a decision that needs to be made and constantly re-evaluated. You need to think about it – and then, where appropriate, demonstrate it, too. Just having a purpose statement does not mean that either is a given.