Sustaining natural resources. Respecting diversity and individuality. Considering employees well-being. Taking a stand on civic rights. Supporting social justice. Aligning words, policies and actions. As the landscape for business is evolving, the social contract between business and society is necessarily transforming and Purpose 2.0 is emerging.
Customers, employees and investors alike now insist that companies step up to save the planet and create a more equitable and just future for everyone. They demand that the business sector operate with an eye toward a greater purpose. Toward becoming the best version of itself. And as brands face an increasingly long list of social and environmental concerns, purpose – alongside sustainability, CSR, ESG and the SDGs – has evolved to be catchall for a stakeholder approach to business and doing good.
The challenge
So it’s no surprise that many business leaders and individuals I speak with feel pressure over the perceived need to develop perfectly well-crafted purpose statements and grand “whys.” And as we’ve discussed their concerns in the context of the Great Resignation, quiet quitting, the politicization of ESG and escalating greenwashing, it’s become clear that for many purpose is more a marketing communications or check-the-box strategic exercise for many brands – rather than a means to create value.
What if during the 2023 planning season we reframed purpose and placed it in a new context? What if in doing so integrating purpose across an organization seemed less onerous, easier to leverage as a tool for cultural and operational transformation? And what if we understood purpose as a means for brands (the human face of a company with which we form a relationship) to become their best selves, creating value by respecting that business is part of an interconnected whole and embracing the unique value each organization can bring to the system through honoring its talents/capabilities and moving from a sense of belongingness?
This is not to say that pursuing a company’s best self is easy. Indeed, it’s not….
Moving from why to how: Purpose 2.0
The 2023 planning season offers an ideal opportunity to usher in a new phase of purpose – a Purpose 2.0 of sorts centering more on how than why. On setting realistic, measurable goals and optimizing purpose as a strategic tool that unifies cross-functional teams, motivates behavioral change and unlocks growth and innovation.
How an organization behaves is intertwined with and essential to why it exists. Every action – whether big or small, seemingly opaque or transparent – adds up. When an organization knows its why and then doesn’t holistically live by it, it’s not fulfilling its implicit promises to customers, employees, partners… and yes, investors. It’s not serving itself, stakeholders, communities, society and the planet in the best way it can.
Be intentional and courageous
Pursuing the how of purpose takes intentionality and courage. It requires a trusting partnership between a brand (the human face of a company with which we form a relationship) and all the people that deliver it every day through their every gesture at work. And by necessity, it insists on recognizing when a company can do better, acknowledging which core competencies and skills need upleveling and connecting words with actions – rather than editing these things out.
Continuously learn as you move up the curve
The pathway for the how of purpose is not always linear and demands continuous learning and improvement. Few, if any, organizations align purpose with policies and procedures and integrate it into operations right out of the box.
I’ve observed that companies generally go through five stages as they move from the why to how of purpose.
- Brand communications and campaigns – This is the way in for many brands. Brand leaders agree to and communicate the organization’s purpose statement. Marketing and communications craft a story in the brand’s voice that feels true to the mission and resonates with employees, customers, investors and other stakeholders.
- Employee engagement – Activating purpose as a means to motivate employees is often the next step on the pathway to living purpose. As people are calling for brands to be honest about the progress they are or are not making with sustainability and ESG, employees are looking to join their employers on the purpose journey. Thos who do are empowered to make a difference and thereby more engaged, satisfied and productive.
- Cultural transformation – For many companies, the “how we do things here” standard is the pivot point for purpose being more than a communications exercise. When purpose is the foundation for beliefs, values, priorities and policies, it serves as a motivating force, engaging employees in the mission, influencing their behaviors and guiding how they form relationships. When embedded into culture, purpose aligns learning and development, performance management, rewards and incentives and the hiring process.
- Operational integration – The choices each leader, manager and worker make in each moment determine how deeply purpose is integrated into day-to-day activities. When embedded into operations, purpose is clearly linked to the fundamental business strategy (the what) and the operating model (the how) as well as communications and brand development. This includes developing strategy and business plans, KPIs and other performance measurement, allocating capital and ensuring ESG frameworks deliver on the commitments purpose sets – both implicitly and explicitly.
- Growth and innovation – When central to a brand’s value proposition, purpose is about more than doing things better and reflecting a raison d’etre beyond profit. It is a source of inspiration to expand into new revenue streams and attract new customers, unlocking hidden value in unexpected ways. It is a tool for decision making about brand experiences and product and service portfolios, ensuring alignment, uncovering areas for growth and developing entirely new core capabilities, all with a higher order sense of doing good in mind.
Be your brand
Purpose doesn’t require shouting out the why of a brand. Nor is it about deriving success by chasing a competitor’s lead in doing good. While another company’s strengths or pathway to balance profit with a social mission may offer inspiration or even insight, each brand must benchmark its success based on its own potential best self, on its own unique combination of goals, values and capabilities….
When a brand – in other words, the human face of a company – is its best self in harmony with its customers, employees, partners, investors, other stakeholders, communities, society and the planet, it is being its purpose and values – because it is living them. This is Purpose 2.0.