“Simple, clear purpose and principles give rise to complex, intelligent behaviour. Complex rules and regulations give rise to simple, stupid behaviour.”

– Dee Hock, founder and former CEO of Visa International

Leaders who make purpose the beating heart of their organisations create more and more effective leaders, more engaged employees, more committed customers and more supportive stakeholders. By doing this, they create greater value, as well as thriving businesses, communities and environments.

As I have discovered while researching my new book “People with Purpose,” leaders everywhere are paying more attention to purpose, and increasingly understand how and why their purpose must be more widely beneficial than simply to make profit and provide a return to shareholders.

Of course, making a profit is crucial, but awareness is growing that today you have to create value for a wider range of stakeholders, and clearly communicate what that value is, if you want to continue to grow. Businesses that express their purpose in a way that shows how they improve people’s lives do much better than their peers, by 400 per cent. Organisations with a shared sense of purpose outperform those with no sense of purpose, on both hard, financial measures and soft, intangible measures.

One reason is because employees with purpose are more motivated and deliver better results. Leaders who make people’s work meaningful, and make their people feel worthy, inspire their people to be more passionate, engaged and flourishing employees, driven to make a difference.

I interviewed more than 30 CEO’s from a wide range of companies for my book and they tell their own stories about how they have used a purpose framework as a ‘North Star’ for long and short-term decision making. They talk about how purpose has encouraged their people to look for solutions that deliver durable value and returns. These are leaders who have used powerfully articulated purpose statements to bring companies back from the brink of collapse, or rapidly grow businesses into global giants, or simply enable their organisations to thrive over long periods of time. They describe how purpose has helped them to transform performance, motivate people through meaning, not fear, and create cultures of high energy and high performance, often from the very edge of disaster.

From what they have said, and from my study of countless purpose statements, I find that when you combine purpose, values and goals into an integrated framework, and communicate it all on a single page, you create a powerful tool that can help you deliver a more agile, empowered, energized and aligned organisation – the prerequisites of high performance.

Whether you are a CEO of a large organisation, a leader of a division of that business, or a leader of a small team, the benefits are the same and the principles are the same.

Research commissioned by the EY Beacon Institute among 500 global business leaders, and conducted by Harvard Business Review Analytic Services (HBRAS), highlighted how global executives view the power of purpose to grow and transform their organisations. It also realised that purpose was a powerful but vastly underutilized asset.

The institute found that:
•Most executive believe purpose matters: 89 per cent of executives surveyed said a strong sense of collective purpose drives employee satisfaction.
•84 per cent said it can affect an organisation’s ability to transform;
•80 per cent said it helps increase customer loyalty.
•However, only a minority of executives said their company currently runs in a purpose – driven way:
•Only 46 per cent said their company has a strong sense of purpose; and 44 per cent say their company was still trying to develop one.

So, the challenge is not having a strong purpose, it is in how to generate a sense of purpose that is truly shared by everyone in the organisation. Here’s what the best leaders were doing:

1.A long-term vision

A long-term vision gives employees a sense of security and this has a powerful impact on their engagement. If you want your people to have a greater sense of purpose, you must give them an audacious goal 10–20 years away – so audacious it gives them a sense of urgency today. If you want to transform the world, you better get started right away.

2. For a truly authentic purpose, start with the customer to truly engage with people inside and outside your organization

Defining common purpose is a key task of leadership. Purpose stays constant while strategies and practices constantly adapt in a changing world. Research shows that leaders who focus their purpose on making customers’ lives better are more likely to inspire truly customer-centric staff, who work hard to keep those customers coming back, thus outperforming competitors. Only by meeting the needs of customers can you fulfil the wider purpose of creating value for all stakeholders.

3. Culture is your competitive edge.

Organizations with a winning culture have given people a shared purpose, shared values and shared goals. Those organizations with rich, healthy cultures achieve income growth seven times higher than those with less well-defined cultures. As a result of their strong cultures, those companies are also better at attracting the talent that enables them to keep generating growth and value. Leaders must choose their values with care, and use them to drive conversations everywhere about not only their purpose and goals, but also the way in which they will be achieved.

4. Strategic Priorities

To achieve your three-year ambition requires you to focus on no more than five or six strategic priorities – fundamental things you have to get right in order to achieve your revenue, profit and relationship goals. These will be high-level tasks that will take you at least three years or longer to achieve, but which are the building blocks of success.

All subsequent operational; or tactical planning and resource allocation decisions will be based on these strategic priorities. Defining these will enable you to decide which projects or initiatives to continue and which to stop or delay. If this or that project does not help you to achieve one of your strategic priorities, then why are you doing it? Defining these goals is to bring your strategy to life, and enables employees to understand the various initiatives that are under way, what those goals will contribute to the vision, and why they are of value to the organisation.

Success, however, depends on ensuring that employees have an understanding of and a commitment to corporate goals, as well as an ability to set their own goals to align with those corporate goals. And they must be regularly reviewed. Understanding goals is one thing, but feeling that you can do something about them is even more important.

5. Use your ‘Purpose on a Page’ to have the powerful conversations that embed vision and values and align the organization

Without alignment, the best strategic plan will never be fully achieved. Alignment is the glue that binds an organization to its purpose, its values and its goals and enables it to get things done faster, with less effort, and with better results. However, you cannot create a fully aligned organization if you don’t spend the time aligning and enabling your managers, so that they can have the purposeful conversations that embed a sense of purpose in every employee. Unless you do this, your vision and values break down at the front line. Here, employees see only the gap between your aspirational language and their daily working lives, and they become cynical rather than motivated.

When articulated and communicated well, a purpose framework can help to direct, align and inspire the right actions on the part of large numbers of people. Without this, change programmes quickly dissolve into a list of confusing, competing and contradicting projects that absorb time and money and take you nowhere at all. When you combine purpose, values and goals into an integrated framework, and articulate it all on a single page, you create the tool that liberates high performance.


To download the True North Diagram go to the ‘Speaker page’ Downloadable Resources section.