“You keep using that word. I do not think it means what you think it means.” Inigo Montoya, The Princess Bride.
We’re not doing things on Purpose
I remember sitting in a conference hall, listening to some of the most esteemed Non-Executive Directors from a variety of industries sharing their insights on good governance and board leadership. One of the panelists commented that “Absolutely, purpose is important, but sometimes we just don’t have the luxury of prioritising it”, and others nodded along, sagely. Of course, the commercials must come first! Around the same time, I was involved in a different conversation with a team of strategy consultants working on a corporate strategy refresh - when I asked how they were looking to embed purpose in the new strategy they just looked puzzled. “The purpose is still the purpose; we’re here to talk about strategy, which is a different thing”. They went on to talk about capabilities, growth and competitors. And I groaned... hopefully just with my internal voice, but my poker face isn’t great.
I’m pretty sure this isn’t just my experience. Multiple surveys by the likes of EY, Deloitte and McKinsey will tell us things like “71% of employees think their leaders still ‘always’ or ‘often’ make critical decisions solely based on financial considerations such as profit, costs and growth.” And let’s be clear, this is not just a commercial sector issue; without naming names, a recent discussion in a government context uncovered that one of the strongest drivers of decision making in a government context is often “to maintain a defensible position and manage risk” - not, as you may have been hoping, to create better outcomes for more people.
And so, I got to thinking... have I just got the wrong end of the stick on what the word ‘purpose’ means? I had to doublecheck myself, but fortunately Collins Dictionary had my back - ‘purpose’ really is “the reason for which anything is done”. And yet. We’ve created a space in corporate land where we have these things that we call ‘Purpose’, which we seem to feel exist quite separate from both governance and strategy.
It feels to me like we’re missing a trick. How can we make good decisions or decide which actions to take unless we are clear on the why, and what our ultimate goal is? Wouldn’t a purpose-led approach make decision-making so much clearer? And of course it does... amongst others, the Harvard Business Review will tell us that clarity of purpose leads to better prioritisation of actions and more effective decisions. Not to mention that people have pretty well-tuned bullshit radars – when we say one thing and do another, they know. And they don’t like it.
Guided by a ‘lurking purpose’?
So what’s going on? Why make life harder for ourselves by clouding the basis for good decision making? My belief is that there almost always is a ‘why’, a purpose, that shapes the things that we do – but sometimes it lurks beneath the surface of the more palatable Purpose we put on our websites. Since Milton Friedman offered that “The social responsibility of business is to increase its profits”, we seem to have taken that idea and internalised it in everything we do, to the extent that maybe we really do believe that to focus on anything else besides profit is bad business, if not downright unethical. Meanwhile government has its own baggage, collected through decades of Whitehall tradition, New Public Management approaches and an increasingly fraught relationship with media and information systems – today, to prioritise anything other than managing risk and efficiency can feel a little bit too ‘edgy’. And so, a modern notion of corporate purpose sits uneasily alongside a set of hand-me-down purposes that have been encoded into strategy, management and governance practice over generations. Perhaps we really are centering purpose within our operating models... it’s just that sometimes it’s not really what our website says our Purpose is.
Fuel for the rocket
Now, I’m not arguing that we need to throw out goals of making money, and keeping our reputations safe – those things are totally important. I like how Brad Bird of Pixar puts it, “Speaking personally, I want my films to make money, but money is just fuel for the rocket. What I really want to do is to go somewhere. I don't want to just collect more fuel.” The same goes for brand and reputation.
What I am arguing is that we can be both bolder, and more authentic in thinking and talking about what our purpose is, and we can work much harder to make sure we embed it in our strategies and decisions. It’s a mindset shift more than anything, which to be fair, is easier said than done. Not least because we, and strategy consultants across the land, have been taught to do strategy, management and governance in a way that takes a universal goal of maximising profit/surplus as a given. It’s what leads to puzzled faces on consultant faces when you ask how purpose drives the strategy.
This is where I think we have a lot to learn from the social sector. For the last 5 or 6 years I have shifted the focus of my work from corporate and government worlds and towards social impact. In many ways the work is the same – people working in complex contexts are trying to organise work to solve important problems. What is different is the context and the available set of tools. My NFP and social impact colleagues will immediately recognise the ubiquity of a “Theory of Change” in systems work. This is a way in which we can articulate the change we want to see in the world, and the role our organisation or initiative will play in contributing toward that change. We can then start to align activities, investments, capabilities and resources against the priorities that will help us to work toward our vision. Essentially theory of change is a strategy tool that allows us to keep purpose central and situated in a real-world context. And it’s been strangely absent as a notion in corporate spaces.
Reclaiming Purpose
So why does this all matter? Our current strategy processes work fine, no? Eehh. The World Bank reckons that global poverty reduction has slowed to a standstill; improvements in shared prosperity have stalled, and climate change poses a fundamental risk to poverty and inequality reduction. Whoops! The point is that businesses and governments both have the potential to change the world in positive ways. And we need that. Whilst we remain slaves to lurking purposes, we’re going to keep nudging things in the wrong direction.
My plea is that we need to think more intentionally about how our Purpose shows up every day, and stop using outdated models of strategy and governance that confine Purpose to a ‘nice to have’. Sure, it’s a change, and change is hard, but it’s not risky – we’ve all seen enough articles that tell us that purpose-aligned businesses have better employee engagement, innovate more and outperform on revenue growth. However, let’s be really clear; that *shouldn’t* be the reason we align to purpose. The headline we should really be shouting about is that “Purpose-aligned businesses actually stand a chance of successfully delivering on their Purpose”... and that matters.