While the twentieth century dream of limitless growth, profit and maximising shareholder value gave many organisations their purpose, the resulting wealth inequality, financial crises, depletion of planetary resources and climate change have shifted priorities dramatically.
Confidence and trust in businesses have been undermined and organisations are now seeking a purpose other than profit-making, particularly in Volatile, Uncertain, Complex, and Ambiguous (VUCA) markets.
But what does organisational purpose mean in this new world?
The question is fundamental, because understanding purpose is a prerequisite to leading and managing any organisational change.
According to a study based on the views of 44 global experts[1], our VUCA world has not only led to people craving for meaning and purpose in life and work, but also led organisations to discover or re-evaluate their purpose.
It found that organisational purpose can be defined as “an organisation’s reason for being characterised by five dimensions: significance, aspiration, direction, unification, and motivation.”
Each of these points can be useful to consider when conceiving and implementing a change programme:
1. Significance: This is the degree to which the organisation has a substantial positive contribution to or impact on the lives or work of people, whether employees inside the organisation, or outside in local or global society. It is about solving human problems or fulfilling human needs, and the impact can be large, for example ending world hunger, or small. One interviewee gave the example of the importance of a car wash that has a dual benefit, improving the prospects of its uneducated apprentices while also providing a service for the community – cleaning cars – that made its customers feel good.
2. Aspiration: It is interesting that interviewees associated purpose with the hope or ambition of achieving “something” in the future that is worthwhile and worth pursuing for its own sake. Although this is strongly desired, it may be difficult or even impossible to achieve. So aspiration is something to be continually striven for – rather than a mission or goal that can actually be accomplished. In the words of one Human Resources professional interviewed: “… you cannot end world hunger, but every action you take, you do something in the short term that contributes to your purpose.” So aspiration differs from vision (an imagined future state when the purpose is being lived and the mission accomplished), as well as from concrete, achievable organisational goals.
3. Direction: This is defined as “the path or course to fulfilling the significant and aspirational aspects of purpose, thereby guiding decision-making, promoting goal-orientation, and providing order and coherence of actions.” Some interviewees specifically highlighted its importance in the context of today’s highly VUCA world.
4. Unification: Interviewees stressed that organisational purpose is necessary for rebuilding fractured human connections by giving people a shared purpose. It can unify, bind and connect people inside and outside organisational boundaries, promote collaboration and increase cooperation between the organisation and stakeholders. “An organisation that’s got a really clear and inspiring purpose connects with you on an emotional level,” another HR professional said.
5. Motivation: Organisational purpose is a motivational force that is energising, inspirational and action oriented, the study found. “[Interviewees] considered organisational purpose literally as a valued source of energy, a force that sets people within and outside the organisation at all levels in motion, that drives action, and that pulls into the future.” In the words of an academic specialising in this field: “Even employees that don’t have very exciting jobs, if they know that they are part of alleviating world hunger that’s going to make their boring job a little bit more motivating.”
Origins of organisational purpose
What drives purpose? The researchers pinpoint three major reasons behind it:
Human needs: organisations can serve and advance society by fulfilling human needs or society’s wider needs to foster wellbeing.
Human problems: taking this a stage further, organisations have a role to play in tackling social problems (such as racism, poverty, crime and wealth inequality); environmental problems (climate change, pollution and scarcity of water and food); and economic problems (depletion of resources, overconsumption and disengagement at work).
Founding values: the values, beliefs, ideals and aspirations of an organisation’s founder(s) are intrinsic to its purpose and cannot be violated without dismantling it.
What is the impact of organisational purpose?
Purpose is what gives an organisation a licence to operate, the study found. It legitimises its activities to provide value for stakeholders, whether they are shareholders, customers, partners or potential employees.
Including purpose as a key component in change management increases the chances of embedding success.
- At organisational level, living the purpose can improve performance, innovation and resilience. Having an overarching purpose helps leaders set their mission (short-term achievable goals), devise strategy and take decisions. “The purpose is what drives everything in the organisation. The mission, the vision, the strategic planning,” in the words of one interviewee specialising in strategy.
- At individual level, purpose leads to meaningful work and increases engagement.
But to achieve this, purpose must be authentic, balanced and well communicated.
Read Part II of this blog to find out what this means for organisations seeking to be their best in today’s VUCA world.
If you’d like to explore how purpose can transform change and elevate your organisation’s transformation journey to new heights, ChangeQuest is here to help. We believe that infusing purpose into change initiatives can bring about a profound positive impact, not only on your projects’ success but also on your employees’ engagement and commitment. Let’s embark on this transformative journey together. Reach out to us, and together, we’ll discover the true potential of purpose-driven change for your organisation.
[1] Exploring the Meaning of Organisational Purpose at a New Dawn: The Development of a Conceptual Model Through Expert Interviews, Frontiers in Psychology, May 2021
