Purpose, and make it authentic

Gone are the days when running a business was only about profit and loss. There’s a new generation of people starting businesses, looking for jobs and looking within their own organisations for something more than that.

Purpose-driven companies make more money, have more engaged employees and tend to have more loyal customers. But who cares about purpose if you can’t pay your bills?

Yesterday we got a group of change-makers and senior leaders together to talk about purpose at our monthly Exchange event: As a recession potentially looms, what’s the role of purpose during a cost of living crisis? Will it be enough to weather the storm — or will organisations and their leaders have to do more?

Here’s some of the conversation highlights:

Purpose has to be truly authentic. No-one has a better nose for the authenticity of your purpose than your employees. Done right it can attract top talent and be a powerful motivator much more potent than pure cash rewards. Done wrong it can undermine confidence and seed a toxic cynicism.

Demonstrating commitment to purpose through actions and priorities helps to demonstrate that authenticity. This is where purpose can align you when times get tough. Look at the rise in B Corporations — a business standard that focuses companies on having a positive impact on the world — during Covid. It went from 82 certified B corps in 2007 to more than 3,500 B Corps in over 70 countries worldwide. With a 64% chance of surviving previous recessions — being more purpose-led helped to orientate companies in disorientating times. It also acts as a framework for businesses:

“It needs to be driven by a real want for purpose. We’ve decided to give structure to our purpose by using the B Corp framework. Everyone’s interpretation of purpose is different — by using B Corp we’ve found a structure everyone can get invested in.”

It can also make your business more resilient. It can act as a bulwark against reactive — and often destructive — short-term decision making. You can keep your eyes better focused on the long-term if you’re all aligned on why you’re there in the first place.

There are, we heard, two kinds of purpose. Purpose as an overarching guiding principle — one that motivates, inspires and helps orientate people — and purpose as a contributing element of everyday decisions. What’s important and what’s not? The decision in front of you might not be a big strategic trade off.

“Purpose can and should play a part in thousands of small decisions every day.”

The price of perfection. Having a purpose can feel like a lofty intangible thing. It can also get tied up in notions that companies have to be perfect if they are purpose-led. That’s not the right approach, we heard. The perfect can very much be the enemy of the good when it comes to purpose. Some of this is tied up in how people can be sneery and judgemental of companies that try to orientate around purpose. It’s easy to cast them as hypocrites as soon as a chink in the armour appears.

“We should celebrate the fact they are doing something and acknowledge that getting things right always starts with small steps and sometimes means making missteps. Purpose should be the thing that ensures we’re heading in the right direction, we mustn’t let an imagined ideal state stop us taking the first step.”

Bringing people with you in that process — both employees and customers — can be a valuable part of having a purpose too. Creating a community around your efforts to change and acknowledging mistakes helps people invest in your drive to be better. A purpose led company can create momentum around change by presenting it as a work in progress, but also create a safety net for when those missteps inevitably happen.

“Nuggets of good intention can help lead to a more purpose-driven mindset. All the small ways that leaders are listening to their employees”.

What’s the point of purpose when times get tough? If you truly commit it can galvanise and guide, motivate and inspire, and create strong and lasting connections between employees, customers and companies.

This is a quick wrap up of the conversation. There was a lot to capture so if anything above spurred some thoughts get in touch ed.curwen@wearemagnetic.com.

Many businesses — and consumers — are facing up to some harsh truths about whether they can afford to pay for their well-intended sustainability plans. Our next Exchange is all about what’s next for net zero. How can the public and private sector effectively collaborate to do more with less, and at what cost? Join the conversation by registering for free tickets here.