- How to transform your organisation with a purpose beyond profit.
- Having a goal beyond making a profit can be a more sustainable and powerful employee motivator.
- Organisations that drive a common goal from the top will outperform competitors.
By Zach Mercurio.
Purpose is so powerful it could help you live longer. A 2015 study by Dr Randy Cohen of Mount Sinai Medical Center found that people with a clear, other-centred purpose in their lives had a 23% reduction in mortality and lived up to seven years longer.
It’s not surprising then that a clear, other-centred, organisational purpose inspires increased employee engagement, satisfaction, and performance. Purpose is also the number one factor in predicting job satisfaction, with the qualities of a firm’s leadership coming in a distant second.
This interesting research indicates that a compelling common purpose may be the most powerful and influential leader in any organisation.
Purpose drives the people who drive the profit
When a purpose beyond profit compels the people who drive a business, profit follows.
In Built To Last, author and researcher Jim Collins found that companies with a higher purpose outperformed the market by an average of six-to-one. Those companies also experienced growth rates three times that of their competitors.
Jim Stengel, a former marketing director at Proctor & Gamble, found similar results in his study on the relationship between a higher purpose and market growth. Stengel’s research demonstrated that purpose-driven brands perform ten times better than others in similar categories and grow at significantly faster rates than the overall market.
Why purpose works: Driving versus striving
Basic physics tells us that when we push something, we add to the weight of that object, making it more difficult to push. When you pull, however, your force works against the weight of the object. In the simplest terms, it’s easier to pull than to push.
Purpose works the same way in psychological terms, by pulling people forward. Classic results-focused motivation tactics may give us short pushes but they typically don’t last. For example, people can achieve a sales goal – then what? People can get that salary increase – then what? Companies can hit a quarterly target – then what? We end up in an endless cycle of short-term motivation tactics and quick fixes. People then lean on these pushes for satisfaction, which leads to more, often expensive, pushing.
Because it is detached from results, purpose works differently. Instead of driving people, purpose inspires a collective striving and can be an ultimate unifier.
How to start building a purposeful organisation
Purpose doesn’t just happen; it takes long-term intentional strategy. But here are some researched ways to start building a purposeful organisation.
1. Focus on your problem, not your solutions
Revenue and profit aren’t problems – they are solutions to help continue creating the products and services that solve a human problem. When we switch the narrative to focus on the person at the end of the supply chain, we emotionally commit people to our companies. The most committed stakeholders don’t just like what you do, they believe what you believe.
2. Focus on why the work matters
Before you teach or tell people what to do, show them why it matters. More specifically, telling human stories of the impact of the work can transform performance.
In a controlled experiment, Adam Grant, a management professor at Wharton School, found that callers at a university fundraising centre who spent just five minutes directly listening to a scholarship recipient’s story spent more than double the amount of time on the phone and generated triple the donations compared to the callers who had no contact.
Stories are powerful, and committing to being storytellers and story collectors can activate your employees’ belief that they matter and their work matters. Mattering is one of the most powerful predictors of satisfaction and engagement. Bring in customer or user stories as much as possible, especially at key points in an employee’s lifecycle. These stories reinforce your true purpose.
As your organisation works towards being purpose-centred, it is important to keep these thoughts front of mind.
- Is your leadership team on the same page?
- Is every person at every level of the organisation on the same page?
- Can every employee answer the question: why am I here?
Business Forum 2017
Zach Mercurio will be speaking at the Chartered Accountants ANZ Business Forum 2017 in June, where the theme will be "purpose beyond profit". The two-day Chartered Accountants ANZ's Business Forum 2017 takes place in Sydney on June 5-6 at the newly refurbished International Convention Centre Sydney, and in Auckland on June 8-9 at SKYCITY Auckland Convention Centre.
As well as Mercurio, the Business Forum 2017 speaker line-up includes Ricardo Semler; Gus Balbontin, former executive director and chief technology officer for Lonely Planet; Abigail Forsyth, entrepreneur and founder of KeepCup; and (Auckland-only) Daniel Flynn, co-founder of thankyouwater.