A wide-scale survey shows your company’s purpose matters more than ever to employees and customers.
Purpose is driving decisions at top companies. Harvard Business Review and the EY Beacon Institute surveyed 474 global executives to look at the business case for purpose. The majority of executives agreed—purpose is important. But fewer than 40% of the executives surveyed said their company had actually articulated a strong sense of purpose.
There’s a need to define purpose. For many companies, it might mean creating customer or shareholder value. For others, it might be about making a social impact or driving innovation. But whatever the direction, developing a sense of purpose is never a simple rebranding exercise—it must be baked into the company’s core. Raj Sisodia, the author of “Conscious Capitalism,” puts it simply:
“Purpose is certainly not just a marketing issue or positioning of your brand image. Purpose should impact every aspect of the firm.”
Purpose is also different from corporate social responsibility. A great example can be found with The LEGO Group, as outlined by Dan Pontefract, author of “The Purpose Effect.” LEGO’s corporate social responsibility efforts answer the question of “What are we doing better?” They opened a sustainability research center to develop new products from more eco-friendly materials. Meanwhile, the company’s purpose is more holistic, answering the question of “Why do we do what we do?” For LEGO, that reason is to “inspire and develop children to think creatively, reason systematically and release their potential to shape their own future —experiencing the endless human possibility.”
Executives surveyed by EY said their companies need to do more to embed their purpose in the organization, especially when it comes to areas like leadership development, training, and employee rewards. Ready to be an advocate for purpose at your company? Here are four powerful reasons to get started now, inspired by the EY Beacon Institute’s findings:
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1. Purpose-driven companies grow faster.
Fifty-eight percent of companies with a clearly defined purpose have experienced growth of 10% or more over the past three years, compared with just 42% of companies where purpose is not well understood or communicated. Companies with a clearly defined sense of purpose are up to 50% more likely to successfully expand into a new market.
2. Purpose makes a difference to employees.
Without a doubt, meaningful work brings employees fulfillment. Sisodia, the author of Conscious Capitalism, and other experts say employees may be the most important stakeholders to which to communicate your company’s purpose. That makes sense—the company starts with its employees, who spread its message to customers and suppliers.
3. Purpose increases customer loyalty.
Your company’s mission and values make a difference to customers, too. Eighty percent of executives surveyed agreed that “an organization with shared purpose will have greater customer loyalty.” Increasingly, brands are taking stands to let their customers know they care.
4. Purpose matters to millennials.
The spending power of millennials grows every day. Research from Enso suggests 68% of millennials care about social issues compared to just 42% of their baby boomer generation counterparts. Learn more about how a partnership with GlobalGiving can help your company define its purpose.