Key Benefits Of The Purpose Driven Workplace
Serendipity struck this week.
Firstly, in regards to last week’s blog, a lot of feedback I received acknowledged the role of purpose yet the pertinent question centred on what are the real benefits in regards to transformation? Secondly, I wrapped up a Purpose project with a Global company that has emerged from 5 separate companies. And with the next step being embedding the unified purpose across different countries, the challenge identified was selling in the benefits to each different region (Asia Pacific, Europe and Americas).
The ‘nested’ why concept resonates as it allows flexibility of purpose across organisation, team and individual. It is particularly relevant for on boarding new hires
The average person works 1,842 hours a year. That adds up to 92,100 hours over a 50-year career. And during those hours, sometimes it’s easy to forget why we do what we do.
Purpose is one of those topics that can be viewed as ‘fluffy’. But the research is clear, individuals are more fulfilled and organizations perform better when they’re rooted in an authentic purpose.
When a company focuses on making meaningful change in the world, it stokes employees’ passion, inspires them, and injects powerful significance into their work. A clear purpose defines why your organization exists; it guides people through change and volatility, encourages emotional commitment, and motivates people to lead from wherever they are. Beyond strategies, mission statements, and goals, purpose is why people get out of bed in the morning and come to work every day. Purpose will help you lead, motivate, and inspire others by establishing a guiding light for your team and organization.
Having a sense of purpose in our life is critical to well-being. In fact, in a longitudinal study, researchers conducting the 2015 U.S Purpose Index study, found that people who demonstrate a sense of purpose in their lives have a 15% lower risk of death compared with those who said they were more or less aimless. And it didn’t seem to matter when people found their direction. It could be in their 20s, 50s, 70s. Now this may be overly dramatic for a blog on a Monday morning: but could there be a bigger benefit?
The 2015 U.S. Purpose Index study found that purpose-oriented employees have 64% higher levels of fulfillment in their work.
Research from Deloitte shows that “mission-driven” companies have 30 percent higher levels of innovation and 40 percent higher levels of retention.
84 percent of millennials say that making a difference is more important than professional recognition.
In the book, Firms of Endearment, the authors built an 18-firm index of purpose-driven companies and tracked their financial performance over 10 years. They found that the 18 FoE companies showed an average annual return on equity of 13.1%—that’s 9% higher than the S&P.
Companies like Starbucks and CVS recognize that it’s in their best interest to focus on a higher purpose. With the latter, CVS’s purpose is to help people on the path to better health. Realizing that cigarettes weren’t consistent with their company purpose, CVS banned their sale in any of their stores as of October 1, 2014. Tobacco products provided a huge revenue stream of over $2 billion in annual sales, but CVS recognized the hypocrisy of their sale if they really wanted to become a health-centered brand.
And BlackRock Financial, the second largest investment firm in the World, is actively encouraging companies in the private sector (in which it’s a significant shareholder) to find a purpose that meets people’s unmet needs. What Larry Fink, chairman and chief executive officer of BlackRock, and others argue is that there’s currently an imbalance that exists between what the market is providing and the needs of society.
In The Wealth of Nations and The Theory of Moral Sentiments, Adam Smith introduced the idea of “the invisible hand,” how markets and their self-interests can benefit society. Whether companies and markets can deliver on the needs of people will be put to the test in the coming years with the acceleration of technology, automation, and complex issues like climate change. The Circular Economy is one example of how purpose-driven companies can lead the charge towards more sustainable systems and solutions. Will your company and others deliver on meeting the needs of people?
Finding a purpose that can be a rallying cry for your team is one of the first steps in how to create transformational change in your organization. Why does your company exist beyond making money? And who are you trying to serve? As you explore the answers to these questions, remember that people on your team and company are more likely to own your purpose if they have a part in creating it.
Please find previous blogs that explore the Power of Purpose.