Earlier this year, 21% of UK CEOs and 45% of global CEOs said their business might not be financially viable in 10 years. PwC found that executives are struggling with uncertainty and economic challenges and have low confidence in business growth.
The incredible and shocking lack of organizational longevity can be addressed by companies that develop purpose statements to drive strategic and operational clarity. To create future-proof, resilient businesses that people want to work for and customers want to buy from, CEOs must embrace the power of purpose.
However, these purpose statements need to be written so that they can guide people's decisions and serve as a means of connecting business to the world.
“It's about figuring out who you are and the impact you want to make,” says Joan Kerr, head of purpose at business consultancy Brandpie. Purpose enables companies to act as problem solvers beyond themselves.It's not a question of purpose or Benefits – It's about doing well while taking into account the world you want to live in.
“Five years ago, purpose was results. Companies had a purpose and they put it on the wall. Here we talk about purpose as an input to strategy and day-to-day decision-making. And ultimately is about operationalizing that purpose across the organization,” Carr says. “Purpose motivates employees to work more than the fundamental pursuit of shareholder value. But that emotional connection, the intangible, is what drives higher returns on assets and equity.” There is a possibility that
Brand Pea's recent situation purpose is important In this report, we investigated the purpose of the FTSE 350. We have found that purpose statements are most effective when they make clear the connection between the business's activities and the problems it is trying to solve in the wider world. Companies that look to the horizon and ask themselves what their role in the world is, rather than a myopic focus on shareholder value, will ensure not only shareholder value but also long-term growth.
This report proves that there is a clear link between purpose and performance. Companies with clear, strategic and impactful purpose statements are more financially resilient and have better return on assets, return on equity and ESG metrics than companies without a purpose statement.
However, to achieve this financial benefit, companies must operationalize their objectives. Professor Nick Barter is a research and co-author of the strategy book. Future Normal: 8 questions to help kids create a business they can be proud of.. He said: “Companies with a purpose statement have a clearer story about who and what they are. That leads to operational efficiency. and how can I make it work externally?”
Barter believes operationalizing corporate purpose fosters alignment and makes business decisions easier. “An organization's philosophy is its purpose, vision, mission, and values. People understand what they do, why they do it, and where the organization is going. “So that translates into great results in terms of numbers,” he added.
Carr agrees. “The magic really happens when you find that connection. It unlocks a ton of innovation and new thinking.” My advice is to think about what you're putting into it and where you can ultimately drive value. Forming your purpose around these concepts can unite your business and create the spark needed to instill purpose throughout your organization.
In its annual CEO survey, Brandpie found that 89% of CEOs say their organization has a purpose, but struggle to make it actionable and relevant across the business. discovered. Barter says that while organizational culture is “amorphous,” a company's vision, mission, values and purpose help people understand their roles and motivate them to take action to achieve more for the business. He says it helps wake him up.
It seems simple. Create a strong purpose. Connect that purpose to your organizational culture. Understand your company's role in the world and how you plan to improve it in the future.
It may be easy in concept, but it's not easy in practice. For many CEOs, profits are a top priority. “Every CEO wants a high-performing organization that produces great results,” Barter says. In today's uncertain economic climate, that's becoming increasingly difficult. By reframing the conversation around purpose, leaders can transform purpose from an added burden or nice-to-have, and create real, actionable value from purpose. Only if it is developed in the right way.
According to Brandpie research, purpose statements should be concise. The average for the FTSE 350 is 16 words. Companies with purpose statements less than this number performed better than companies with longer statements.
“Showing customers, employees, and investors that your organization is more than just self-serving will drive long-term value,” the report says. Shorter statements, a focus on the future, and a connection to the outside world and the company's goals all lead to stronger financial performance. The purpose is profit.
“People believe in strong statements of purpose that actually serve something bigger than themselves,” Barter says. Purpose is part of the story an organization tells about itself. This is an opportunity for businesses to shape their thinking and drive the outcomes they want to achieve. If it fits your company's culture, meets stakeholder needs, and provides a broad and resilient vision for the future, it can be the foundation of a promising future.
Learn more about Brandpie's purpose and productivity
