The risk of purpose wash
There is a danger that the increasing talk of purpose results in a series of rebranding exercises and the opportunity for real change is lost.
There is a growing evidence base linking purpose and profit, although some of this is survey based, superficial and not academically robust, there is evidence that being purpose-led delivers better for society and people. Some of the best evidence is set out in the Additional resources below.
In some, the desire to demonstrate a link between purpose and profit betrays a desire to simply use purpose as a way to make more profit. This fundamentally misunderstands and undermines the whole idea/movement/potential for system change. Using purpose as the latest profit maximising strategy leaves the real purpose of business unchanged, and simply means purpose becomes the latest brand, marketing or employee engagement tool.
The FRC’s report in January 2020 on the adoption of the 2018 Code by the FTSE100 highlights the problem – it said that:
Too many companies substituted what appeared to be a slogan or marketing line for their purpose or restricted it to achieving shareholder returns or profit. (page 9)
Much of the evidence linking purpose to profit demonstrates that a clear meaningful purpose makes for better, happier, more productive and innovative business. This is not about purpose as the route to profit it is about purpose as the source of a happier, more collaborative business that you are proud to run – and that may lead to profit as one outcome if pursued with authenticity, consistency and courage.
Purpose engages the humanity in people to contribute to a joint worthwhile endeavour, it engages with peoples’ need for meaning and that results in better productivity and growth. This is about more than morality, justice or an organisation meeting their responsibilities (although that is of course important) and more than about finding new opportunities in a new economy (which is also important) – it is also about recognizing that when people understand why the company exists, can feel proud of that and are empowered to take ownership of it, they are hugely happier, more motivated, productive and creative because it matters to them. And this can apply not to just employees but to others who contribute to the success of the business such as customers, suppliers, communities and investors.
These ideas are explored in more detail in other parts of this knowledgebase in particular What it means to be Human, Understanding the Blueprint Framework and Understanding the Blueprint Principles.
Being purpose-led is also about much more than having a purpose, the purpose statement itself is less important than the work the company does to create a shared understanding of what the purpose means for the business and how it then goes on to create the conditions for the purpose to come to life
The remaining courses in the Inspiration section of this knowledgebase explain in more detail Blueprint’s view of what it means to be purpose led. The other three sections of the Knowledgebase explore how to incorporate this thinking in practice. The sections reflect an illustrative journey that we feel can help companies understand what might be involved:
- Creating a Shared understanding of what it means to be purpose led and what it implies for the future of the business
- Articulation of why of the business exists – its purpose – starting to create a link between the purpose, strategy, decision making and culture and avoiding purpose wash
- Creating the conditions for Bringing purpose to life, including through strategy, culture and governance