In our challenging VUCA (Volatile, Uncertain, Complex, and Ambiguous) world, individuals are not alone in seeking more purpose in life. Organisations too are discovering or re-evaluating their purpose. Part I of this blog described how a study based on the views of 44 global experts found that purpose is what gives an organisation a licence to operate and legitimises its business activities. Crucially, it also improves performance.
Defining and understanding purpose is therefore a vital step in any change programme. It can help change managers consider the impact of change on their organisation’s purpose, as well as how they might change their purpose to better suit their current priorities.
Why does organisational purpose improve performance?
The study identified three factors:
- Meaningfulness: purpose allows an organisation to provide a sense of meaningfulness and thereby engage purpose-driven people. Need fulfilment: purpose can fulfil employees’ psychological need to do meaningful work, to do something significant for others and to belong to something greater than themselves.
- Person-organisation fit: this works in two ways. First, purpose can be motivational if individuals believe there is a strong match between their own purpose, their team’s purpose and the organisation’s purpose. Second, this can become a self-fulfilling prophecy because people are more likely to be attracted to an organisation when its purpose fits with their own values and their sense of who they are.
The positive impact of organisational purpose cannot be taken for granted, however. Without authenticity, balance, communication and proof of impact it will fail (it is no coincidence that these factors are also essential to successful transformation programmes).
Authenticity: interviewees stressed that it is vital for an organisation and its leaders to authentic, with close alignment between purpose, words and actions. This should be obvious in everyday behaviour. One leader explained: “It’s not a marketing trick. It’s an extremely high standard to live up to as an organisation. If you say you commit to this, you better do it because otherwise you can understand why people don’t trust you. … But then it has to be real, words and actions have to go hand in hand.”
Balance: there is a careful balance to be achieved between altruistic purpose that focuses on others, and the self-interest egotistic aspect that focuses on the organisation’s survival and continuity. Interestingly, interviewees suggested that what is good for others can also be good for the organisation, so that an apparently counterintuitive focus on benefitting others actually leads to more profit. This is challenging to carry out, however, in times of economic downturn.
Communication: for a positive outcome, purpose must be communicated concisely, consistently and frequently – and it must be clear to all stakeholders. In the words of one strategist: “A purpose-driven organisation inspires and provides a shared narrative that connects people and provides them with a sense of meaningfulness.” This is essential to making sure that purpose is understood, and its potential impact recognised, by individual stakeholders.
Perception of impact: impact is defined as “the degree to which employees are aware that their actions affect others” and feedback is pivotal in this context. For employees to be motivated they need to see that focus on organisational purpose leads to concrete impact and has results that affect their work. If they do, this leads to higher levels of perceived meaningfulness and therefore higher levels of positive outcomes.
The study has broken new ground in defining of organisational purpose as “an organisation’s reason for being characterised by significance, aspiration, direction, unification, and motivation.” (See Part I).
This work can have practical benefits for organisations of all sizes and in all sectors. It can help change practitioners manage organisational change better because leaders are able to distinguish between:
- organisational purpose (why you do business or what you are here for)
- mission (what you want to achieve in terms of specific activities, specific goals and a specific timeline)
- vision (an imagined future state of what it will be like when the purpose is being lived and the mission accomplished)
- (shared) values (how you do business, not why).
The impact of this can be significant, particularly for organisations wrestling with VUCA challenges. The findings:
- enable people to recognise “purpose-washing” i.e. where there is no authenticity behind the words, and actions are purely based on self-interest
- allow practitioners to evaluate how organisations actually demonstrate social responsibility and whether they act according to their purpose
- enable leaders to devise and communicate a purpose statement, set clear objectives and offer employees meaningfulness and even spirituality in their work
- help people understand that every organisation has a purpose, but this does not have to be “do-gooding”, nor does the societal, environmental and economic impact need to be big
- show that even the smallest organisations can have impact on people’s lives.
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.