Why every business needs a Purpose
The world of business has undergone some major changes over the last several years. Evolving needs and priorities of the workforce, Covid, as well as the current economic instability have contributed to a renewed need for businesses to be agile in their modes of operating. “Purpose” plays a big role in an organisation’s capacity to overcome these challenges.
A Purpose can be defined as an articulated reason as to why a workforce should care about a business’s growth, and why consumers and clients should buy into the continuation and growth of that organisation. A company taking the steps to clearly define its Purpose internally, and through external communications, contributes greatly to its future success and can help mitigate the effects of any potential obstacles, such as those referred to above.
There is copious evidence that a business with a Purpose can achieve accelerated levels of growth as opposed to a company that does not. In Simon Sinek’s best-selling book Start with Why, the author and thought-leader suggests that when identifying the Purpose of your company and its mission, business leaders should begin by asking the most important question – why are we working towards this goal as a firm? He suggests that ascertaining the ‘why’ in all actions taken by a business, and its workforce, is the key to unlocking the corporate inspirational direction.
The conclusion that Purpose is an essential component of a business is purported by academia too. The Harvard Business Review published a study that concluded that companies with a Purpose that their team embraces consistently, outperform those that don’t. Moreover, it has been found that a 1% increase in Purpose activation predicts a 0.9% increase in eNPS. When a shared sense of Purpose underpins the vision, mission, and values of an organisation, the team in question can contribute to the collective Purpose of the business in a more meaningful way.
Further to the study from the Harvard Business Review, renowned finance professor Alex Edmans has published research and a book on the importance of clearly establishing a business’ Purpose. He found that a strong Purpose can enhance employees’ satisfaction with their experience of working at an organisation and concluded that it also heightens their trust in management. Purpose can promote appropriate and consistent behaviours within a firm.
Demonstrably, a variety of sources have come to the same conclusion – a company having a Purpose is essential. At Gerald Edelman, we are launching our own clearly defined Purpose which will be announced in February. We know this is a seismic step in reimagining the way that we will collaborate as colleagues as we move into a new era of business, and we hope that our readers will stay abreast of our development as a firm. This announcement encompasses the steps we are taking towards elevated diversity, equality and inclusivity, and, separately, sustainability.
As a new year has begun, we hope to see many other firms following the evidence and join us in working towards a more Purpose-led business world