“The only constant is change” said the Greek philosopher Heraclitus, and if there was ever a time when this was relevant, it definitely is nowadays. In a time where organizations are scrambling to find the thin thread that will keep them going and see them through this shifting market and economy, there is ever-growing significance in reassessing organizational leadership and ensuring that they’re experiencing purpose-driven change.
Photo by Jamie Street on Unsplash
Today, an increasing number of successful organizations are revising the way they view leadership. As events unfold, organizations are understanding that leadership is not a top-down model but rather a democracy that should be allocated evenly across teams and stakeholders.
This is where purpose-driven leadership becomes crucial. It should start with management coining the organization's purpose, then communicating it and supporting team members in understanding their purpose at the heart of the organization; this assists in joining the two to create a foundation out of which the business and people can grow.
The Small Giants’ community, which stems from the renowned book by the author Bo Burlingham “Small Giants: Companies That Choose to Be Great Instead of Big” defines purpose or value-driven leadership as “the practice of prioritizing purpose and people over profit and greatness over growth.”
Now more than ever, there is a clear interest in founding a purpose-driven company and promoting a positive company culture because when new hires decide on which company to join, they are more likely to join the purposeful, positive one.
Previously, cutthroat businesses could get away with everything and pay little to no attention to their employees and still be considered "fierce" for it while today's successful businesses are all about purpose. Businesses following the old "my way or the highway" model are falling off the grid; now, each company's reputation and journey is defined by its people.
“It is not enough to be industrious; so are the ants. What are you industrious about?” – Henry David Thoreau
Being purposeful or not is the key differentiator that will separate the organizations that will survive these uncertain times and the ones who will fail to do so. The step further that will differentiate them is why do they do business? This is what will make organizations resilient and triumphal over others.
Do not confuse purpose with CSR
While corporate social responsibility (CSR) can positively impact all stakeholders, it is not to be confused with an organization's purpose.
Purpose is what organizations stands for, and while this should include CSR, it doesn't only revolve around it.
You can think of your organization’s purpose as revolving around the Five Ws outlined as follows:
1. Why: working for the delight of the end-user.
2. Who: engaging your team members by ensuring their purpose is clearly communicated to create value and drive operations, while bringing stakeholders into the discussion to ensure responsibility towards the community.
3. Where: ensuring ethical practices when making decisions as a part of being anchored in your society.
4. What: committing to fair practices inside the organization to guide teams in a productive environment.
5. When: embracing innovation, acknowledging uncomfortable situations, communicating in a timely fashion all early on to ensure being ahead of the game, and thriving.
79% of business leaders surveyed by PwC believe that an organization’s purpose is central to business success, yet 68% shared that purpose is not used as a guidepost in leadership decision making processes within their organization.
So, what makes up an actionable purpose-driven leadership environment framework?
Along with your purpose, vision, mission, and values, there must be tangible daily systems and processes put in place to bring to life your organization's manifesto.
This is where leadership plays an integral part in driving the purpose on a daily basis. When confronted with any decision, leaders must set aside their personal biases and review the company's purpose and values to ensure they are being taken into consideration while making their decisions. They must lead with value.
The driving force behind your purpose is your employees, by genuinely caring for them and introducing a family-like culture of understanding you allow to build a positive company culture and reinforce your purpose.
Once you empower your employees with positivity, this will directly reflect on your customer experience since driven, and engaged employees are more prone to cultivate meaningful relationships with customers, suppliers, and all stakeholders.
Your workforce also enables you to understand the value of establishing deep roots in the community and acting with a positive impact.
According to the same PwC study, millennials who have a strong connection to the purpose of their organization are 5.3 times more likely to stay. And 73% of employees who say they work at a “purpose-driven” company are engaged with the jobs they do, compared to just 23% of those who say they don’t in a survey conducted by Deloitte.
In the latest Global Leadership Forecast conducted by EY, The Conference Board, and DDI, the importance of purpose-driven leadership was brought forward as being essential to businesses.
The forecast described purpose as “North Star a fixed point to help navigate through change and uncertainty” (Global Leadership Forecast 2018).
And even though the forecast was published in 2018, it tackles the very issues and situations we are facing today. In a time where everything is uncertain, and teams are losing a sense of purpose while working remotely and not being physically engaged at the workplace, it is more important than ever to focus on the sense of purpose to refocus organizations aim and reason to exist.
As per the forecast, the EY institute has overtime shown that “purpose enables organizations to perform well in time of volatility." The study also "joins a growing body of evidence demonstrating that a strong and active purpose raises employee’s engagement and acts as a unifier, makes customers more loyal and committed to working with you, and helps to frame effective decision making in an environment of uncertainty.”
The Global leadership forecast finds that getting purpose right builds organizational resilience and crucially improves long term financial performance, as seen in the figure below.
Of the 1500 global C-suite executives surveyed in the forecast, 84% say their business operates in an increasingly disrupted environment.
The study also insisted on the fact that having a purpose statement isn’t enough, but rather organizations with active leadership support get an optimal performance and are better equipped to deal with disruptions.
One significant advantage of having a purposeful leadership is in direct correlation with today's shifting business landscape: resilience. The study goes on to mention that purposeful companies enjoy higher levels of trust and loyalty, making them more resilient during change.
The study highlights that weaving purpose into daily operations comes for the creation of a learning environment where leadership skills are built by focusing on experiences coaching and mentoring. “Leaders learn from leaders, and they coach and develop their people.”
Digital pioneers were defined as the top 25 percent of organizations with the most influential digital leadership capabilities and who financially outperform other companies by 50 percent.
In correlation with today's crucial demand in navigating the virtual matrix to manage remotely, the impact of the digitally transforming workplace influenced nearly every aspect of the research, revealing that organizations that are ahead in the digital game are significantly outperforming the average. As a result, this will define the organizations that will emerge more unified out of the global pandemic tomorrow.
The key findings from the study show that purpose-driven leadership can be conveyed and employed in different ways:
1. Communicating purpose, peer coaching and success stories, to reiterate and link purpose with daily activities.
2. Using purpose as a lens for all organization's operations and letting it guide the solutions offered, customer experience, and how to engage the workforce.
3. Focusing on leaders and helping them articulate their purpose as it relates to the overarching purpose for the business, then supporting them in doing the same for their teams and employees.
4. Developing essential skills purpose-driven leaders forming teams and motivating in a fast-changing world where they can improve psychological safety and agility.
As per Deloitte, “purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors, all the while achieving higher employee and customer satisfaction.” Today's consumers often identify with a brand's purpose, seeking to connect at a deeper level even as the brand reciprocally aligns with who they are and whom they want to be.
People want to work for organizations whose values align with their own. They want to navigate the work environment knowing that the organization cares about them, their career path, and even their personal life. Today, employing purpose-driven leadership to bring together teams and create a sense of community while everyone is working remotely is more important than ever. A diverse, purpose-driven culture defines success.
Looking to find your organizational purpose and drive successful leadership and build resilience during uncertain times? Contact us for a consultation.
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