5 minute read 4 Oct 2019
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9 steps to become a Purpose-led organisation

By

EY Ireland

Multidisciplinary professional services organization

EY Ireland, a leading global professional services organisation providing assurance, tax, audit, transaction and advisory services.

5 minute read 4 Oct 2019

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Purpose describes the very core of what a company does, and for whom it creates value.

In an era of rapid globalisation and dramatic disruption, the expectations of business have changed. Today, companies are expected to stand for more than just profits.

For organisations big and small, that means creating a Purpose-driven working world that goes beyond profits and shareholder dividends to serve employees, customers and society as a whole.

Leading with Purpose is good for morale and for business but as the world’s leading companies are finding, employees often sense a gap between what leaders say and what the business actually does.  

Here are some steps to help close the say-do gap and truly embed Purpose in all you do.

1. Make sure leadership is engaged

To build a Purpose-driven businesses, it’s vital that leadership is engaged. If the CEO doesn’t live and breathe Purpose, it will be harder to produce the desired results.

Leaders often firmly believe they are articulating a compelling Purpose and using it to lead and make decisions. However, research by the EY Beacon Institute suggests that an overconfidence bias can leave leaders viewing their organisations’ commitment to Purpose far more optimistically than their employees.

2. Understand the sources of disconnect

Purposeful companies recognise the importance of truly engaging their employees on the firm’s Purpose journey. There are distinct benefits in attracting talent, spurring innovation, navigating disruption and making a profit – all key for surviving and thriving in today’s volatile world. 

Yet while many understand the power of Purpose, they find that integrating it into their strategy and realising its full value much more challenging. The “say-do” gap between promise and experience disenfranchises employees and harms morale. It undermines reputation and prevents firms realising the benefits of being Purpose guided.

Two primary sources of this Purpose disconnect between leaders and employees exist - poor communication and misaligned incentives.

3. Improve communication

All too often, employees believe their organisation’s broader Purpose hasn’t been properly explained to them. For example, workers at the front line may think of their jobs in terms of immediate tasks rather than the larger Purpose for which leadership claim the company exists.

In these cases, business leaders have failed to convey how the broader Purpose relates to the work of the employees, resulting in lack of clarity and buy-in.

4. Connect the incentives - be consistent

Even in organisations in which Purpose is well understood and embraced, many leaders have failed to empower their employees to act on it. Research by the EY Beacon Institute found that 37% of employees think their performance isn’t linked to their organisation’s Purpose. Almost three in ten employees say that salaries and remuneration incentives are not connected to their firm's stated Purpose.

When they feel like their company’s Purpose is just a slogan on the wall, employees are less likely to go the extra mile on behalf of their employer and more likely to look for a job elsewhere. Determined companies that attack the “say-do” gap from different angles are more likely to reap the benefits of Purpose-driven business.

5. Reinforce the message

Purposeful companies with a well-embedded purpose demonstrate how their Purpose is connected to what their business does commercially. They can show how their Strategies are aligned to their Purpose. To take hold, a Purpose needs to be repeated and reinforced continuously by leaders at all levels. Employees should be in no doubt about the link between what they do every day and the organisation’s purpose.

6. Empower employees

Companies that get it right empower their employees to live and act on the firm’s Purpose by demonstrating that Purpose is something lived, not just lectured. Real-world examples can make that Purpose authentic for employees by serving as Purpose “proof points,” conveying the firm’s authentic commitment through actions, not words.

7. Remove the barriers to understanding

When employees in different parts of the world have different understandings of Purpose, how do business leaders build Purpose into a multinational firm? Cross-cultural and physical distance are both challenging barriers to Purpose.

Hiring people who share the same core values as the organisation, regardless of location is one solution. Even if the specifics vary, those people can be trusted to uphold the spirit of the organisation’s Purpose. Establishing a core set of values while also allowing employees to operate independently and take ownership of the Purpose journey works well.

8. Measure what you treasure

If it really matters, Purpose must be incorporated into the performance metrics of individual employees. For organisations who have put Sustainability at the core of why they exist, this could mean basing executive bonuses on how effectively they help meet sustainability goals. Purposeful companies also align Purpose and performance metrics at an organisation-wide level. EY Beacon Institute’s research found that more than 90% of best-in-class Purposeful companies regularly evaluate whether they’re making progress toward their Purpose.

In short, organisations need to build a means of tracking progress on their Purpose journey.

9. Live your Purpose

Purpose isn’t a programme launched at a board meeting and left to top executives to make a reality. All levels need to be involved and incentivised, not only to talk Purpose but embody it in their actions and empower employees to take action.

Smart executives channel energy and engagement by transforming employees into a driving force for Purpose to help their people find fulfilment in their work and redefine the business as a force for good.

Summary

Today, companies are expected to stand for more than just profits. For organisations big and small, that means creating a Purpose-driven working world that goes beyond profits and shareholder dividends to serve employees, customers and society as a whole.

About this article

By

EY Ireland

Multidisciplinary professional services organization

EY Ireland, a leading global professional services organisation providing assurance, tax, audit, transaction and advisory services.