What are the Benefits of being a Purpose-Driven Organisation?
This article looks at the Benefits of being a Purpose-Driven Organisation and how it can have a positive impact on the bottom line.
There is a growing realisation among successful companies that the idea that the purpose cannot be about making a profit or on shareholder value. They understand that making a profit (and adding shareholder value) is the result of being purpose-driven, it is not the purpose in itself.
Purpose-Driven businesses perform better, make more money, have more engaged employees and more loyal customers. This is because they are better at innovation and transformational change.
You are more likely to succeed when you care about the outcome. Organisational purpose gives people the sense of being part of something greater than themselves. This can lead to high levels of engagement, high levels of creativity, and the willingness to partner across the various boundaries that exist within a company (e.g. functional, product, geographic, etc.). These outcomes are very powerful drivers that help the organisation achieve its goals and vision.
This goes against the assumption made by many leaders and managers that their people are primarily focused on money. While people do work to make money to create or sustain a certain lifestyle form themselves and their families. However, once their financial needs have been met, people tend to be more motivated by intrinsic meaning and the sense that they are contributing to something worthwhile. This is where the organisation’s purpose overlaps with personal purpose.
Organisational Purpose streamlines the way decisions are made and ensures that everyone is pulling in the same direction, acting like a compass to direct the decision-making process. Without the shared purpose, organisations tend to run in circles, never making forward progress but always rehashing the same discussions. In purpose-driven organisations, they ask “does this decision fit with our purpose?”. This will ensure that decisions are made that are aligned with purpose, values and vision.
It is important to note that these decisions are not always going to be positive. They may result in not doing something, even though that decision may not benefit the organisation in the short-term but are the correct thing to do for the long-term success of the organisation.
Research has shown that purpose-driven companies have highly engaged and motivated people, more satisfied and loyal customers, and fulfilled shareholders. They see themselves as market leaders with a brighter future than their competitors. And they indicate that they are reaping major rewards for their efforts. In short, they are more efficient, focused and driven and all of this had a positive impact on the bottom line. In addition, purpose-driven organisations create a competitive advantage that is very difficult to replicate.