Designing a Purpose-Driven Organization

The purpose-driven organization is drawing greater attention as employees seek more meaning in their work and corporate leaders align their corporate missions with larger social goals. Organizations built around a strong central purpose that goes beyond simply making a profit offer employees the opportunity to contribute to society as a whole, creating better outcomes for workers and organizations alike.

“A higher purpose is not about economic exchanges,” authors Robert E. Quinn and Anjan V. Thakor wrote for Harvard Business Review. “ It reflects something more aspirational. It explains how the people involved with an organization are making a difference, gives them a sense of meaning, and draws their support.”

Purpose-driven organizations enjoy a number of competitive advantages over those that are not aligned with a meaningful mission. They have highly-motivated employees who work harder, bring more creativity to their tasks, and stay in their jobs longer. The influx of millennials into the workplace has further emphasized organizations’ social and environmental impacts and responsibilities. Gallup polls indicate only one-third of U.S. employees find their work meaningful, suggesting recruitment and retention advantages for purpose-driven organizations in the job market. A PWC survey found 79 percent of executives believe purpose is central to business success. Other studies found “purposeful” companies outperform the stock market by 42 percent, while companies without a purpose statement underperform by the same margin.  

To illustrate the benefits and challenges of a purpose-driven organization, I recall an experience several years ago with a healthcare organization that is one of our clients. When I first arrived, I was impressed by all the people in the organization who seemed highly committed to helping other people through their work activities. In every meeting I attended, I got the sense that people really seemed to care about health and well-being, and that the organization focused on serving families and family members.

As I spent more time in the operations units of that organization, I continued to feel that sense of purpose — particularly among the frontline workers. People said they joined the organization to make a difference, to serve other people, and because they believed they could help make people healthier.

At the same time, I also began to discover there was a healthy cynicism in the organization. The reality we saw throughout the organization was a disconnect between that purpose, and the tools and structures that should support employees working to fulfill that purpose. There was a lack of investment in the necessary processes and systems that would make it easier and more helpful to do business with the organization. The employees witnessed constant scrutiny over headcounts and the costs of delivering service. They also saw an organizational structure that was highly fragmented. Ownership and accountability for one part of the customer experience and interaction was assigned to one part of the organization, while other parts of the customer experience were owned by other areas. As a result, people began to doubt the organization’s real commitment to its purpose and its mission, fueling further cynicism.

This organization was fortunate that it had built this truly meaningful connection for people. However, through the way the leaders managed and ran the organization, they had lost that competitive advantage that being purpose-driven often brings.

For example, if someone worked in a factory, you could easily see how employees might think, “I’m just here to make money. I question whether the company is concerned about our well-being or helping people build better lives. They are probably just in it for the profit.” These types of businesses are often highly focused on their own profitability. We might say they do not have a greater purpose: they are just a profit machine or a means to get something done.

The organization I was associated with did enjoy many advantages. They had a purpose, and their people were passionate and committed to that purpose. However, in spite of that purpose, the organization basically squandered those intrinsic advantages by not being organized in ways to take advantage of people’s real passion and commitment.

Leveraging a purpose-driven organization requires leaders to do more than simply talk about the purpose. They also need to make the right moves to make it easy and acceptable for people to deliver on their promises to customers, fellow employees, and themselves.

What can leaders do to take advantage of the intrinsic value their organization can offer? Here are a few methods they can use to avoid squandering those opportunities:

  • Don’t put the wrong leaders in the wrong roles.
  • Assign accountabilities clearly and appropriately.
  • Make the right investments in systems and processes.
  • Align corporate strategy with purpose.

Examining the sides of our organization Cube Model suggests several key considerations to help ensure you deliver on the potential of the purpose-driven organization. Major factors such as structure, culture, talent, metrics, leadership, and how the work is done can drive more than just an effective organization; they can enable an organization to tap into the intrinsic energy and purpose that people want to have when they are at work – the desire to contribute to something larger than themselves.

As the disruptions of the pandemic ease and leaders begin to think about returning to a “normal” environment, they should also examine whether their organizations are reaping all the benefits possible by properly aligning purpose and profits.