Purpose is considered one of the cornerstones of New Work. In “Reinventing Organisations” Frederic Laloux speaks of “Evolutionary Purpose”, that companies of a new type are trying out. At first glance, this may sound a bit esoteric, but it touches upon an essential survival strategy for organizations in a world in which requirements and needs are constantly changing. Because if companies keep returning to their core values, to what drives them, and to WHY they exist, they can always align their actions with these principles, regardless of the external influences they face.
Purpose according to Apple: The apple doesn’t fall far from the…reason.
Simon Sinek’s TED Talk “Start with Why – How great leaders inspire action” was clicked a million times. In it, he explains, among other things, the secret of Apple’s success. How does the company manage to turn millions of people into passionate fans of its products when, objectively speaking, they are no better than PCs, laptops, and smartphones from other manufacturers (sometimes even less powerful) – and expensive to boot. The explanation: an emotional connection to a brand is not created by WHAT, but by WHY. In the case of Apple, their constant departure from the status quo makes their followers feel like they belong to a special movement, the avant-garde so to speak.
What does Purpose have to do with HR and employee retention?
Basically, the external effects described above can also be applied to the organization internally. Employees, who commit themselves to an organization, who strive to put their skills at the service of the company must understand the WHY (Why am I doing this?). They need answers to questions like
- What is the overall goal my colleagues and I are working towards?
- Why is my work important?
- What problems are we solving as a team and what role does my work play in this?
Unfortunately, purpose is often confused with a higher or individual meaning of life for the employees. Or even cast aside as a “nice-to-have” instead of putting it at the top of the priority list as a corporate “must-have”. Therefore, we want to do away with some prejudices and create a little more clarity about what purpose is (and what it is not) and why it is so important for organizations to know their own purpose.
1. Purpose can not be mandated “from above” – it must be modeled by example.
If you imagine a pyramid, the purpose of an organization is at the top. The corporate culture is anchored in the lower part, the base. Both are mutually dependent. In order to achieve a common mission in the best possible way, using all the heads and hands in the company, a culture of cooperation, openness, and collaboration must prevail. Conversely, a common goal, a vision, and the collective internalization of the WHY promote the development of this sort of culture.
So is purpose a leadership task? – Yes and no. On the one hand, there has to be absolute clarity about the core values of the company at the management level. This should also be reflected in the management style, but must also be clearly formulated and communicated, for example when hiring new staff. At the same time, it is important to involve all employees in visualizing it, developing it further, and just generally being aware of it. With an emphasis on ALL employees – from the manager to the employee in production or the warehouse. Regular formats, where the entire workforce comes together to reflect on the WHY and develop ideas for cooperation, but also for new products, are an important instrument of modern business management.
2. Purpose is generated by proximity.
Silo mentality and territorial behavior make it difficult to work towards a common goal. The stronger the human connection between managers and employees or among colleagues from different departments, the more likely it is that everyone will do their best and deliver work that fulfills the company’s purpose. This implies that managers need to be approachable, open to suggestions and ideas, have a sense of the dynamics in their teams, and a good understanding of the potential their employees bring to the table. Effective instruments for developing a deep understanding of each other and strengthening the bond amongst colleagues are, for example, job rotation, job shadowing, or internships in which employees can get a glimpse of completely different areas of the company on a daily or weekly basis. These constellations not only broaden the view of processes and tasks but also of the challenges others face – the best conditions for learning from and supporting each other.
3. Purpose can be unpleasant.
A vision, a mission, an overarching goal – that’s all fine and well. But coming to terms with your own WHY can also require hard decisions. For example, when the meaning of certain tasks and positions is suddenly questioned. Reflecting on the values and the reasons for the existence of the company may, in some cases, mean having to redefine or even dissolve some work areas completely. Especially in transformation processes where the question of purpose is a major issue, it is important to talk to employees individually. This is where managers need to formulate the company’s purpose very clearly and at the same time be receptive to individual purposes that each employee brings with them. Organizational purposes (e.g. “We want to build a new working world”) do not always match 1:1 with the individual’s purposes (“I want to do a really good job in accounting”). And yet there should be a recognizable overlap in terms of the organization’s orientation and values. The same applies to recruiting. Candidates who agree with the purpose of the company will most likely do a better job and feel personal fulfillment and happiness at the same time, therefore staying committed more long term. Conversely, it is also okay to go separate ways if it becomes clear that individual goals and the purpose of the company are not aligned.
4. Increased profit is not a Purpose
Why are we doing this? – To make money, of course!
When talking about purpose, we are not talking primarily about turnover or profit maximization. Those who focus exclusively on profit are unlikely to develop particularly innovative products. But that’s exactly what it’s all about: offering something that solves real problems, satisfies needs and/or appeals to people on an emotional level. Something that creates real added value. This incentive has a much stronger effect on the motivation of employees than profit. Studies have repeatedly shown that with the prospect of higher salaries, both motivation and performance levels actually decline. People want to see that their work actually makes a difference. For workers whose role in the fabrication process of a product is limited to very small steps, it can be difficult to see the effects of one’s own actions. This is where managers are needed who make the contribution of each and every individual visible and tangible repeatedly – through targeted exchange, feedback, content, etc. It is clear that meaningful work requires appropriate pay. The same is true for companies – they want and need to make money. And they will, on the one hand, if their product touches a nerve in (consumer) society and, on the other hand, if they are able to bind motivated people who know why they do what they do.
5. In times of crisis it is even more important to talk about Purpose
Purpose-driven work requires employees who pull together. At the same time, employees need to understand the WHY in order to pull together. A feeling of connection to each other, but also to the organization, is essential – and has become much more challenging since the beginning of the Corona crisis. This is especially true for companies that have, until now, relied mostly on physical encounters and exchanges in the office. For them, it is crucial to create digital spaces in order to let employees feel a sense of connection, but also to engage in discussion about what each individual can contribute in the current situation. More than ever, companies need a clear idea of why they exist, what they stand for and WHY they do what they do. Communicating this to the employees in their home office is the greatest task of good leadership these days.
But managers don’t have to deal with all of this alone. Employees who have internalized the purpose and who are connected to each other become digital leaders for their colleagues. They support each other, motivate those who have fallen into a state of low motivation due to the crisis, and draw energy from this new situation – to learn something new, take on responsibility and develop their own skills even further. In this way they develop their own individual purpose. Exactly this mindset is in demand now and tomorrow!
“Great companies don’t hire skilled people and motivate them, they hire already motivated people and inspire them.”
Simon Sinke: Start with Why