August 22, 2023

The importance of having a purpose: the best drive for an organization

The secret ingredient to extraordinary companies is purpose.

Kenneth Frazier.


Each generation comes with new consumption habits, changing how and where you spend your money. People belonging to Generation Z and Millennials do research before buying and, if a brand does not match their ethical values, 33% would be willing not to buy from a brand. They are interested in sustainable and responsible products, such as cosmetics not tested on animals or second-hand clothing. Companies that make their purpose an ultimate objective can obtain a competitive advantage (Mackey and Sisodia, 2013).

What is organizational purpose?

Organizational purpose is what motivates, drives and guides an organization to achieve a goal that is meaningful to itself but also has an impact on the rest of the world. It is the reason why something is done or exists and that helps the organization stay focused on what is important. That is, the north star that guides all the company's activities.
If we focus on employees, purpose is the drive that keeps them motivated to meet their short- and long-term objectives, what gives meaning to their work and what unites them to the organization, generating commitment and pride.

Organizational culture as a reinforcement of purpose

Is it enough to tell a team what the purpose of the organization is? No. And if someone believes that with a communication campaign they are going to achieve it, they better not be scared when they discover the enormous gap between the company's purpose and the employees' feelings. The key is always in the same factor: culture.
Culture plays a very important role. It is the foundation on which purpose can take root and, with it, corporate strategy. It is the vehicle in which the purpose is integrated, the context of committed employees and the basis for giving meaning to each day-to-day task. For companies trying to develop a purpose-driven organization, culture is identified as the “strongest competitive difference” (Sisodia et al., 2007).
Until 2014, Microsoft had a reputation for having a culture aggressive and competitive and, coincidentally (not), the company was losing ground in technological innovation. What happened in 2014 is that Satya Nadella became the CEO. Nadella not only updated Microsoft's purpose, he reinvented the organizational culture that supports that purpose. And yes, the culture went from being combative to being empathetic and open.

Having a purpose is beneficial

A study published by Harvard Business Review revealed that 52% of companies that have a clearly articulated purpose, experiences more than 10% growth compared to companies that had not developed their purpose. Purpose-driven companies benefited from greater global expansion (66% vs. 48%), more product launches (56% vs. 33%), and success in transformation processes (52% vs. 16%) .
Purpose also benefits work experience: a study of the Northwestern University showed that when companies have a greater sense of purpose,the Employees feel that their work is more meaningful. Furthermore, the University of Sussex found that when Leaders demonstrate a clear purpose, your team is happier and more productive.

The impact of purpose on our tasks

Where do we spend most of our time? How do we want to spend that time? According to a survey by LinkedIn, 52% of candidates say they would not accept a job offer if they did not know or agree with the company's values and purpose. As we mentioned at the beginning, generational changes imply different ways of seeing and understanding not only what we want to consume, but also the places in which we want to work. Social and environmental movements concern us more and more, and this makes us think differently about the lives we lead and the work we do. We want and need to personally contribute to a more responsible world.

How is the gap between employees and purpose calculated?

Within your evaluation of Organizational Culture or Work Climate, you can evaluate the purpose to detect possible gaps. Some indicators that you can take into account are:
· Communication. Are employees clear about the purpose of the company?
· Alignment. Are leaders, management and employees aligned with this purpose?
· Pride. Do employees feel proud to work for this organization?
· Commitment. Do the members of the organization feel committed to the values of the organization, to the purpose, to the culture?
· Confidence. Do employees feel emotionally safe to act freely with purpose?
The theory that people have a need to do meaningful work is supported by motivation theorists and humanistic psychologists (Alderfer, 1972; Herzberg, Mausner and Snyderman, 1959; Maslow, 1943; McClelland, 1965; McGregor, 1960; Rogers, 1961), so when are you going to start making your organization's purpose shine?