What is organisational purpose?

We know that a positive culture and purpose makes a business attractive to customers, employees and investors. What’s less clear is how to create a purpose driven organisation. So far, there’s no one-size fits all, plug and play solution to organisational purpose.

What is organisational purpose?

Organisational purpose isn’t simply what a business does. It addresses the why too. At its simplest, purpose is a company’s raison d'être.

A Harvard Business Review of The Business Case for Purpose defines organisational purpose as:

“[A]n aspirational reason for being which inspires and provides a call to action for an organisation and its partners and stakeholders and provides benefit to local and global society.”

The report says companies with a strong sense of purpose are able to transform and innovate better and deliver consistent revenue growth.

This is supported by research from King's College London, which details that "purpose-driven consumer companies produce annual growth rates that are triple the size of the annual growth rates of non-purpose driven organisations within their sector."

Much of the research and discussion around organisational purpose suggests that companies perform better when they have a clear sense of purpose. We also know that employees perform better when they're invested in business goals.

What are the key aspects of organisational purpose? 

• Creating value for the customer

• Positively impacting wider society and the local community

• Inspiring innovation and change

• Providing employees with a sense of fulfilment

• Generating revenue for shareholders

• Contributing to ethical business practices and sustainability

• Reducing the business’s impact on the environment

• Encouraging and supporting employees to persevere through challenges

So how can SME leaders build a purpose-driven organisation?

7 tips to create a purpose-driven organisation

There are two broad stages of creating a purpose driven organisation. Step one is to create and communicate the purpose itself. Step two is embedding that purpose within your business.

1. Don't assume

Don’t assume every employee knows what is happening in the business and why you are doing it. Take a step back to understand how well you are currently communicating to employees. How much do your people understand about what you do - and more importantly - why you do it? 

2. Identify your organisation’s purpose

What do you do and aspire to do? What would be lost if your business closed tomorrow? Unearth the details of your purpose by conducting surveys with consumers and staff.

3. Articulate your purpose effectively

Craft and communicate your organisation’s purpose so that it resonates with your employees and your customers. Using a variety of tools such as talks, imagery and music will help you share the messages to everyone involved in your business.

4. Investment

Creating a purpose-driven organisation means investing in your business culture and leaders. This makes it easier to communicate and embody purpose throughout your enterprise.

Nominate and train ‘organisational purpose leaders’ to live and breathe the behaviours that align with your company’s purpose.

5. Make purpose more than hype

Some businesses communicate purpose brilliantly but fail to integrate it into their employees’ day-to-day experiences. This can become damaging.

Regular employee surveys are a good way of understanding how close your employee experience is to your aspiring culture and purpose.

6. Remember that organisational purpose lives in every interaction

Pay attention to all aspects of your business’s environment. A purpose driven organisation provides opportunities for meaningful work as well as personal growth.

Consider introducing rewards and incentives for behaviours that embody and advance organisational purpose.

7. Engage your employees

Give your employees the opportunity to engage in your company’s purpose and you’ll find it easier to create a purpose driven organisation. Encourage your people to contribute ideas and provide creative solutions; chances are they’ll have ideas you’ve never considered.

Creating a positive culture and organisational purpose pays off. Not only do you get a working environment that's meaningful to your staff, but you also attract and retain the talent you need to make your business a success.

Creating a positive organisational purpose is one of the key motivators in attracting people who want to work for you. People are more likely to invest time, energy and enthusiasm in things they believe in.

Download innovative research & insights in the 4th edition of Breathe's People First Culture Series - How co-creating culture can transform your SME.