10 October 2017
Glenn Jacobsen
The thoughts, feelings and emotions of internal and external stakeholders are central to any organisation’s success. Stakeholders are not simply passive recipients of all that organisational life offers. They are sensitive, they challenge and they engage. They seek to understand the soul of the organisation and create a meaningful relationship with the organisation, and enter a kind of psychological contract with the organisation. Stakeholders make the intellectual and emotional buy-in in both heart and mind. The corporate purpose should capture how the organisation feels, thinks and acts, and relate to all stakeholders. Leaders should identify with and personify the corporate purpose through their communications and interactions with stakeholders. They should lead with purpose.
Like many other business concepts, there are many definitions of “corporate purpose”. “Corporate purpose” is closely related to the organisation’s mission, vision, values and principles, and the organisation’s brand and reputation. But as we will explain below, it is not just a new label to describe the meaning of an organisation.
The mission is what the organisation does, what business the organisation is in (and what it is not), and what really matters to the organisation. The vision is what the organisation wants to achieve and become in the long term. It identifies what the future holds. The vision is the projection of the organisations future belief. Out of reach, but within sight. Values are the behavioural compass that describes the organisation’s fundamental beliefs and attitudes. Values are what people really believe in and what guides them. To achieve its strategic objectives, the organisation also needs guiding principles to give people a set of directions.
In a world where organisations and people struggle to handle the challenges they are facing due to the complexity, speed of change and unpredictability in organisational life, well-defined and motivating mission, vision, values and principles are central to success. Whereas mission, vision, values and principles relate to the organisations identity from an inside-out perspective, brand and reputation relate to its image from the outside-in.
The corporate brand is how the organisation positions itself and promises to make a relevant and attractive difference, both externally and internally. This could be to customers, clients, shareholders, media, society, employees etc., basically whomever it has chosen to serve. And internally it’s about cultivating the employee experience and building the employer brand. The corporate reputation is the image it has in the minds of its stakeholders. And in this case, perception is reality.
So, what is corporate purpose? Corporate purpose is the answer to the fundamental question: Why?
With organisations seeking to look beyond the “how” they operate, “what” they do and “where”. Corporate purpose is the “why we do what we do”. It is why the organisation exist. In many ways, the corporate purpose looks and sounds like a mission statement. But it doesn’t just reflect what the organisation aims to do in the market, it focuses on all the stakeholders the organisation wishes to impact. It is defining the overarching purpose as something larger than the organisation and the individuals. It expresses the soul of the organisation and unifies all stakeholders by explaining the ultimate role of the organisation in a broader context.
Comparable organisations could often share similar ways of expressing their mission statements, whereas a strong corporate purpose would be distinctive and unique. It is not just a formal announcement and memorable statement. It is beyond words. It depends on the employees submersing themselves in the brand. Totally believing in- and living the corporate purpose.
The corporate purpose is larger than the organisations current capabilities. Its reach goes further than the vision. And its roots go deeper than the values. It’s something than can be felt deep down. It potentially has more impact on future success than any strategy. It is not just who the organisation is, it is who the organisation is becoming. Corporate purpose is what some people call the organisations “philosophical heartbeat”. It is about putting people at the heart of the organisation. Words on a wall are not enough, feelings will not cut it either. The corporate purpose must channel a strong, meaningful spirit and soul. Compared to the corporate brand, the corporate purpose is more like an unsaid promise to the people and society the organisation serves. It can remain informal and unarticulated. More intuitive, than instructive.
The corporate purpose works both internally and externally. Everyone the organisation has chosen to serve must be able to feel it. It’s a psychological contract between the organisation and its stakeholders. A strong corporate purpose engages, inspires and motivates people. The corporate purpose is the watermark in everything the organisation feels, thinks and does. Connecting the dots. It links everything together and helps to create consistency. This includes activities, behaviour and other artefacts. Every touchpoint matters, both internally and externally.
From the organisations point-of-view, a strong corporate purpose cultivates meaningful and sustainable growth. It can help an organisation to fulfil its business, societal and stakeholder objectives.
Internally, a strong corporate purpose creates a sense of coherence in the organisation. A deeper sense of meaning and commitment. It ties the organisations members together. It creates a collective understanding of the organisations reason for being and direction. It creates both intellectual and emotional buy-in. It energises employees. It is “why” they wake up in the morning and prefer to work in this organisation.
From a stakeholder’s point-of-view, an organisations strong corporate purpose, if it is relevant, attractive and distinctive, is the point-of-difference that makes it stand out from the competitors. It makes the organisation even more competitive in every sense of the word. Attracting customers, clients, shareholders, talents and much more.
Externally, a strong corporate purpose builds strong relations and bonds with various stakeholders. It can set the organisation apart from the rest.
There are different routes to purpose statements. Here are some examples. Coca-Cola convey a mindset/feeling, more than a product: “To inspire moments of optimism and uplift”. Starbucks bring more to the world than a cup of coffee: ”To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. Egmont bring stories to life at the heart of all activities: “We bring stories to life”.
Corporate purpose is a holistic concept. It must embrace both the internal and external stakeholders. The corporate purpose must connect with both the hearts and the minds of its stakeholders. A corporate brand, just like a simple chain, is only as strong as its weakest link.
The corporate purpose must be authentic. What you see is what you get. Every touchpoint is a proof point. It is where promises meets needs and expectations. It must be real. A true purpose. Living and breathing. It is like a strong, winning personality.
It must be visible and embedded in both the development, anchoring and execution of the corporate strategy. The various stakeholders must be able to feel it. In every way, and in every touchpoint the organisation interacts with them. It is both what the organisation does and how it does it. Like the mission, vision, values and principles, it must guide discussions and decisions in organisational life.
Leadership is critical to ensuring that employees live the corporate purpose. Leaders must create consistency between the organisations mission, vision, values, principles, branding, activities and behaviour. Leaders must acknowledge that they carry, communicate and amplify the corporate purpose’s message. They must take both intellectual and emotional ownership of the corporate purpose to live and deliver it effectively. They must align their own professional purpose with the organisation’s purpose.
