The FINANCIAL -- Purpose is high on the management agenda these days, but many organizations don’t give it the attention it deserves. By tackling it superficially, they not only fail to realize their explicit purpose but also miss out on the many powerful benefits purpose offers, according to a new report by The Boston Consulting Group and BrightHouse.
The report, Purpose with the Power to Transform Your Organization, is being released today.
The report marks the first joint publication by BCG and BrightHouse, the Atlanta-based creative consultancy that helps organizations uncover their purpose to grow their people, profits, and social impact. BrightHouse, acquired by BCG in 2015, has advised global brands and Fortune 500 companies for more than 20 years.
The report describes a common pitfall in the pursuit of purpose, a phenomenon the authors call “surface purpose.” “We find that for many organizations, defining purpose amounts to writing a catchy slogan or a generic statement that could apply to just about any company,” says Doug Shipman, the CEO of BrightHouse and a coauthor of the report. “But even among those that articulate their purpose well, we find they do almost nothing to integrate it into the day-to-day experiences of employees and customers.”
Why Purpose Matters
Beyond the growing desire among leaders and employees to derive more meaning from their work and have a positive impact on society, purpose matters for several lesser-known reasons. BCG analysis shows that purpose driven organizations perform better: purpose correlates strongly with ten-year total shareholder return.
Another powerful, but equally overlooked, benefit: purpose supports “always-on” transformation. The demands of serial, often parallel, transformations can be draining for employees. Organizations need to appeal to head and heart to motivate and sustain their people. “Purpose acts as a fuel, providing an emotional connection that energizes people and inspires greater commitment,” says Jim Hemerling, a BCG senior partner and a coauthor of the report. “It also serves as a North Star, providing direction and alignment to everyone.”
Bringing Purpose to Life
The authors clarify true purpose, offering a litmus test of five properties to help organizations steer clear of surface purpose. They then describe a rigorous, four-step approach organizations can use to bring purpose to life and ingrain it in the organizations: discover, articulate, activate, and embed. The report draws on the experience of clients from a broad range of sectors, including financial services, retail, consumer goods, and industrial goods.
The two final steps in the purpose journey are critical to ensuring that purpose endures. Activating purpose requires, among other things, that leaders embody purpose in their words and deeds, including through symbolic acts. Embedding purpose calls for longer-term changes in the organizational environment, such as its learning and development programs and its performance management and incentives systems. “By following these steps,” notes Hemerling, “organizations can realize the kind of purpose that will anchor and guide them through challenging circumstances and changing times.”