THE BUSINESS CASE FOR PURPOSE
Businesses face an accelerated pace of change as digitalization, disruptive business, and rapidly changing consumer expectations reshape their world. At the same time, the demands of a new generation of employees for meaning in their work, the declining levels of trust in companies, and a wider debate about the role business can or should play in society are reshaping expecta- tions of organizations. Over the past few years, a growing number of corporate leaders and experts have spoken out about how a strong shared sense of purpose can help companies meet these new challenges and transform their organizations. In order to understand why, and more importantly, how, com- panies are employing purpose to guide and lend impetus to their transformations, Harvard Business Review Analytic Services conducted a survey sponsored by the EY Beacon Institute. The global survey of 474 executives found that although there is near-unanimity in the business community about the value of purpose in driving performance, less than half of the executives surveyed said their company had actually articulated a strong sense of purpose and used it as a way tomake decisions and strengthenmotivation. Only a few companies appear to have embed- ded their purpose to a point where they have reaped its full potential. figure 1 But in those organizations where purpose had become a driver of strategy and decision-making, executives reported a greater ability to deliver revenue growth and drive successful innovation and ongoing transformation. THE RESULTS The survey defined organizational purpose as “an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society.” And although 90 percent of executives surveyed said their company understands the importance of such purpose, only 46 percent said it informs their strategic and operational decision-making. This survey suggests that purpose is a powerful though underutilized tool: • Most executives believe purpose matters. Eighty-nine percent of executives surveyed said a strong sense of collective purpose drives employee satisfaction; 84 percent said it can affect an organization’s ability to transform, and 80 percent said it helps increase customer loyalty. • … but only a minority said their company currently runs in a purpose-driven way. Forty-six percent said their company has a strong sense of purpose while another 44 percent said their company is trying to develop one.
THE BUSINESS CASE FOR PURPOSE
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