Abstract

In his 2018 letter to the chief executive officers (CEOs) of some of the nation’s largest publically traded organizations, Larry Fink, the CEO of BlackRock (a global investment management corporation), said “Without a sense of purpose, no company, either public or private, can achieve its full potential”. 1 Simon Sinek refers to an organization’s purpose as their WHY. 2 In essence, it’s a company’s fundamental reason for being 3 —how the people inside it are making a difference 4 and how their work is meaningful. 5
Though few companies clearly articulate “WHY” they do WHAT they do, 2 it is increasingly clear that there are numerous benefits of doing so, such as more energized and engaged employees. 4 -6 Being aware of the organization’s purpose helps team members see meaning in their work and understand the broader contributions they are making to society. 7 In a recent survey of more than 2200 employed Americans, more than 9/10 reported that they would accept a lower salary for meaningful work. On average, respondents were willing to sacrifice almost 25% of their lifetime earnings in exchange for work that was consistently meaningful. 8 And on the flip side, those who find their work meaningful work 1 more hour per week, take fewer paid days off, and have higher job satisfaction. 8 Given the link between satisfaction and productivity, the authors estimated that meaningful work could translate to more than $9000 per employee per year. 8 The shared values and beliefs derived from the company’s purpose provide a sense of protection, belonging, and trust within the organization. 2
Being clear about purpose also has a very positive impact on recruitment and retention. 7 -9 As demand for top talent escalates, millennials and Generation Z have high expectations about purpose-driven organizations that address societal and environmental challenges. 3,7,9 A company’s purpose can and should be used as part of the recruitment strategy. 7,9 Employees who derive meaning and significance from their work were more than 3 times as likely to stay with their organizations—the highest single impact of any variable in one survey. 6 Another study reported that the likelihood of staying with an organization was 2 to 5 times higher among employees with a strong connection to the company’s purpose. 7
A clear sense of organizational purpose also contributes to customer loyalty. 2,4 Based on a recent purpose study, Porter Novelli reported that 79% of consumers are more loyal to companies with a purpose: 78% would tell others to buy from them, 73% would share content about that brand, and 73% would defend them. 10 People are drawn to organizations that can communicate their beliefs, so if organizations clearly communicate their WHY, consumers will go out of their way to include those products or brands in their lives. 2
The company’s purpose also becomes a guiding and driving force for innovation, strategic planning, and day-to-day decision-making. 2,3,7 It acts as the foundational principle that is used to evaluate strategic questions, such as pursuing new products or expanding to new markets. 7 Using the organization’s WHY as a filter makes decision-making more efficient. 2 And when decisions are made, purpose elicits support from within. 5 Charisma and the ability for leaders to inspire come from clarity of WHY. 2 Furthermore, the WHY can facilitate successfully weathering adversity or struggle as members of the organization at all levels are committed to the higher cause. 2
Perhaps not surprisingly, then, purpose also often drives profit. 9 Purpose-driven organizations have larger profit margins and higher valuations. 3 -5 A wonderful case in point is Southwest Airlines. A recent tribute 11 to Herb Kelleher, the co-founder of Southwest Airlines, noted that to Mr. Kelleher, Southwest was a cause, not simply a company. He was driven to “democratize the skies” for average Americans by fulfilling the purpose of giving people the freedom to fly. The purpose came alive inside the company as well, embodied in the 8 freedoms for team members (referred to by one of Kelleher’s business partners as Freedom Fighters), such as the freedom to learn and grow, the freedom to create and innovate, and the freedom to create financial security. Kelleher knew team members could thrive and excel if they recognized that their work made a difference. 2
Patagonia is another exemplary illustration. For many years, their purpose and mission has been to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” This clear WHY has informed many decisions, including the tough choice to shift their supply chain from the conventionally grown cotton that comprised 20% of its product line to organically grown cotton because of the harm it created to soil, air, and groundwater. 12 Another powerful example was their commitment to donate 100% of annual Black Friday sales to nonprofits working to protect air, soil, and water. They expected $2 million and got $10 million. 12 In late 2018, the company updated their mission statement to more directly state their purpose: “Patagonia is in business to save our home planet.” The company’s founder advised their human resource team, “Whenever we have a job opening, all things being equal, hire the person who’s committed to saving the planet no matter what the job is.” Their purpose also influences a number of other internal strategic and marketing decisions, such as their brand ambassador selection process—and more fundamentally—investments to tackle regenerative agriculture, endorsements of specific political candidates, and international work to protect lands. 13
The actions of both of these organizations underscore that an organization’s purpose only works when it is lived out with true authenticity 5,12 —when it drives every decision. Purpose is not about isolated corporate social responsibility gestures, 9 taglines, or marketing campaigns. 3 It is not an initiative, but rather a way of doing business. 7 Organizations must walk the talk—demonstrating authentic commitment to how their purpose is at the very core of their identity and how they are contributing to society. 10 Unfortunately, a recent report illustrates a wide gap between the stated importance of purpose and the extent to which organizations are relying on purpose as a guidepost for decision-making: Though nearly 80% of leaders agreed that purpose is a critical element of success, only approximately one-third said that purpose informed their leadership team’s decision-making. 7
One way to address that disconnect is to continually reinforce and clarify the WHY, 5 using purpose as the compass for every decision, every conversation, every solution to a challenge 7 —and giving permission to say no to things that are inconsistent with it—such that the purpose becomes a shared conscience, transforming the culture. 5 That may entail, for example, weaving the purpose of the organization into onboarding, training, corporate meetings, and culture-building activities by underscoring the relationship between the organization’s purpose and the development process. 5 Or helping team members see how purpose connects to their day-to-day tasks by sending them a video message that incorporates storytelling about how their work benefits end users and society. 5,7 It likely goes without saying that it is essential that mid-level managers embody the purpose of the organization and lead through that lens. 7 Another often overlooked strategy is to look for bright spots—places in the organization where purpose is driving excellence—and try to replicate them in other parts of the organization. 5 Similarly, any meaning multipliers in the organization who readily connect their work to the purpose of the organization could be invited to mentor others. 8
There are a number of other steps an organization can take to ensure that their WHY unleashes its potential. 4 Many such steps are well articulated by a line-up of amazing contributions in this issue of The Art of Health Promotion.
As you consider the influence of purpose in your own organization or the organizations with whom you work, be on the lookout for other companies that can provide inspiration. Some worthy of consideration are those who have achieved B Corp certification. This certification process evaluates an organization’s social and environmental performance, as well as how its operations and business models impact employees, customers, the community, and the environment. According to their website, Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy.
14
Simon Sinek captured it well when he said, No matter the size of the organization, no matter the industry, no matter the product or service, if we all take some responsibility to start with WHY and inspire others to do the same, then together, we can change the world.
2
