Part 1: Purpose
Victoria Hurth is Associate Professor in Marketing & Sustainable Business and Faculty of Business Lead: Student Satisfaction at the University of Plymouth in the United Kingdom.
Editor’s Note: This is the first of a 5-part series on the interconnected linkages between purpose, governance, marketing, a culture of purpose, and leadership as they relate to sustainability and the GRLI’s broader inquiry into global responsibility. Read Part 2, Part 3, Part 4 and Part 5, or access the full series.
I have been following developments in sustainability and responsibility closely since the Johannesburg Summit in 2002. In this time, I have seen some advancements that make me shocked and even down-right frightened, while others give me a keen sense that we are starting to shake the foundations that have held up our unsustainable system.
It is in the realm of foundational shift that I have focused my personal efforts. If the problem is systemic then there are some changes that can be made at the epicentre that can have a bigger effect than others.
My overarching question across this time has been ‘how can organisations become forces for good’. Organisations are the primary systems that we in society give permission to capture precious finite resources on our behalf and transform them into something that can enhance our wellbeing. This fragile social contract is only sustainable if the decisions organisations make fit this umbrella-purpose frame in the long-term. It also requires us to hold organisations to account.
However, the reality is that this is not what organisations are doing, and we do not currently have the governance, marketing, cultural conditions or leadership to bring this about. We govern, lead, market and nurture organisational cultures that produce money but not wellbeing. Although this is precisely the worst place to be given the crises we face (precisely because of this system) I do feel there is a growing mainstream view that massive change needs to happen and an emerging consensus of what change is needed.
In this series of blogs I have been invited to outline my current reflection about the above preconditions of sustainability (purpose, governance, marketing, culture and leadership in organisations) — and what I see emerging for the future.
When it comes to business and sustainability, one foundational area is ‘Organisational Purpose’. If you can get this right you have a chance of motivating the right kind of governance, marketing, culture and leadership. However, organisations are systems and each of these factors is interdependent, so, for example, you can’t implement purpose without the right marketing and marketing can’t be truly purpose-driven without the company having a fully functional organisational purpose.
Defining ‘Organisational Purpose’
It was about 3 years ago that I started on a journey to understand what people meant precisely when they said ‘we are a purpose-driven organisation’ or ‘x organisation is starting to become a leader in ‘purpose’’. It began as a result of a roundtable discussion about sustainable marketing (which I will cover in a later blog) at the Chartered Management Institute (CMI).
I had been commissioned by Friends of the Earth to research how marketing could be reformed to deliver sustainability — which for me is defined as ‘long-term wellbeing for all’.
A well-known advertising company employee kept bringing up how ‘purpose’ was the language organisations were starting to use for this goal. Having spent 15 years in sustainability from a range of stakeholder positions, I was surprised this had passed me by. It started me wondering what this term really meant, if this was just another PR stunt, if it was the same thing as sustainability, and if not, what was its potential to deliver long-term prosperity?
I was connected by Friends of the Earth with a fantastic marketing Professor in Cambridge (Jaideep Prabhu) who was thinking on similar lines, and after undertaking a thorough literature review, we started a collaboration with Blueprint for Better Business. Bringing on a brilliant PhD student (Charlie Ebert) to walk the path, we started the research journey together. The aim was to help those trying to reshape their organisation’s relationship with society to gain more clarity about what ‘purpose’ could do to help them — this is something practitioners kept saying they needed, and if there is something academics are good for, its bringing clarity (yes ironic I know).
We wanted to find out what the current concept of ‘organisational purpose’ really meant to the community of practice, why organisations were looking at it now and how they were innovating around its implementation. The core aim was to pin down a precise definition –making it easier to measure purpose, drive purpose, and to hold organisations to account when they say they are ‘purpose-driven’.
We interviewed a number of high-level executives in some detail and scoured the literature (old, new, academic and non-academic). The result is an academic paper that is being prepared for publication and a summary White Paper that has recently been published by the CMI and Blueprint for Better Business:
We conclude that ‘organisational purpose’ as used in practice today can be defined as: “An organisation’s meaningful and enduring reason to exist that aligns with long-term financial performance, provides a clear context for daily decision making and unifies and motivates relevant stakeholders.”
By the same token, an organisation that has the above, is one that is ‘purpose-driven’.
Aside from the fact that this is about the very core reason why an organisation exists not being about producing as much money as possible for a few people, there are two mutually-supporting aspects in this definition that make it such an important concept.
Firstly, that it is about having real clarity of direction. Purpose gives a clear sense of what the very point of an organisation is. This creates a clear ‘north star’ — something that everyone in the organisation can visualise, allowing dispersed dynamic decision-making and greater agility.
Secondly, purpose at the same time gives the deep motivation to walk in the direction of the north star. Purpose is about the reason for an organisation’s existence being deeply motivating at a human level. The combination of these two is what makes the concept very powerful. It cannot just be about a clear direction OR an ambitious goal that is not humanly meaningful. It has to be both.
Purpose as raw human motivation
The key word in the definition that needs unpicking to really understand purpose is ‘meaningful’.
Various authors have interrogated the deep relationships between meaning, purpose and between these and transcendence and intrinsic values. With this lens, purpose is about the buzz we get from feeling our lives are in service to something positive beyond ourselves. In other words, having a purpose which increases the wellbeing of others (and this can include the non-human) gives our lives meaning and reduces our sense of ‘anomie’ (meaninglessness). Given that sustainability is about long-term wellbeing for all, this is a happy coincidence that we have not yet harnessed properly in organisations.
We know the power of serving others to be true when we reflect on the ‘warm glow’ we get when we feel we have made someone’s day better — even in a small way of saying good morning, or picking up something they have dropped. As long as we are not highly dysfunctional humans, and we get some feedback that we did good (like a smile), then we get this buzz — and a boost to our desire to repeat the positive action.
Hence, organisational purpose is highly motivational because it taps into our unlimited human desire to serve others — extending the Forum for the Future/ IIRC capitals model, we call this Emotional Capital. This untapped potential has, in the main, been thoroughly ignored, if not repressed, within mainstream businesses in the past half a century as we have assumed self-service and monetary reward are the keys to productivity and tried hard to strip emotion and humanity from our working environments.
Forum for the Future 5 Capitals model (https://www.forumforthefuture.org/the-five-capitals Retrieved 12 Oct 2018)
If our global shared purpose frame is long-term wellbeing for all, then organisational purpose is about being really clear about what the organisation’s particular role to play is within this ‘wellbeing market-place’. Who can the company serve, better than others, in ways that are financially sustainable (via enough profits) over the long-term?
The answers come from a classic auditing process — reflecting on the internal (including values and world views) and external environment (including values and worldviews of stakeholders), but with purpose as the lens. Purpose should reveal, and develop, the deep character, values and therefore identity of the organisation.
The combination of a shared purpose frame and a clear sense of a unique contribution to that agenda is what makes purpose highly unifying and at the same time highly differentiating.
Delivering real wellbeing in the long-term for any group requires a technical understanding of the system-level interactions and feedbacks. This is one core aspect that purpose and sustainability share -– they are systems concepts because they share the focus on ‘long-term wellbeing’ as the ultimate ‘ends’ of various activity. However, purpose is not the same as sustainability. Rather, it complements sustainability by focusing on the ultimate means of what we call ‘emotional capital’ rather than ultimate means of natural capital. So, I believe that implementing purpose still requires an eye on the concept of sustainability — just to check that a company’s purpose is really implemented within the global system of natural and social limits.
This systems focus is also why serving the stakeholders (that in turn help a company deliver its purpose) is vital. Serving stakeholders is both a responsible action so that one person’s wellbeing doesn’t destroy another’s, but is also a necessary for being able to deliver purpose. This will of course result in dilemmas and trade-offs, which the purpose will help navigate.
There are lots of other skills that are required by organisations wanting to be purpose-driven — beyond merely mapping out the material aspects of the organisations system. It requires organisation to own and innovate the notion of ‘value’ — value being the term most often used (rather than ‘preference’) as a catch all to mean whatever rocks someone’s boat.
Therefore ‘value’ shifts from being something the company can discern from how many sales and how much profit it makes, to something that is carefully defined and measured in a variety of ways (as are being advanced through social value, social impact, and ESG domains, as examples). This includes recognising value as a proxy for wellbeing that has can be looked at objectively as well as subjectively. As a result, purpose requires an organisation to think about how the suite of human needs and other wellbeing drivers that we require to flourish as humans. It then needs to understand how these needs are being delivered currently through products and services, and how those this can be shifted overtime to further increase actual wellbeing in a way that can be sustainably delivered over the long-term.
Purpose is a rich concept. I have just scratched the surface here with some of the most important aspects that stand out from my reflections on our research. I would love to know any thoughts you have on purpose as a concept (old and new), why it is brimming to the surface now and how we ensure it is not lost to the realm of ‘purpose-washing’.
Victoria Hurth is Associate Professor in Marketing & Sustainable Business and Faculty of Business Lead: Student Satisfaction at Plymouth University in the United Kingdom.