5 minute read 28 Sep 2022

How to attain purpose-led business transformation

By Diani Wilmot

Senior Research Consultant EY Lane4, EY Professional Services Limited

Carries out impactful primary and secondary research into occupational and performance psychology.

5 minute read 28 Sep 2022

Being purpose-led is no longer a nicety, but a business necessity. Discover how to transform purpose ambition into action.

In brief
  • Being a purpose-led organisation requires much more than a compelling purpose statement.
  • A purpose that leads to successful transformation is authentic, practical and inspiring.
  • This research draws on insights from 20 trail-blazing purpose-led leaders, a survey of over 2,000 employees and a rigorous literature review.

In today’s working world, organisations are facing complex, interwoven and unique issues that demand a re-examination of organisational purpose and the expectations of leaders. Therefore, for organisations to survive, it is imperative that leaders let go of outdated business models that focus purely on shareholder value. Instead, they must adopt a holistic, 360° stakeholder approach that considers the wellbeing and complex interests of all people that are directly involved, as well as those of the planet and the future generations. Purpose-led organisations adopt this approach, allowing leaders to serve the wider stakeholder ecosystem and enabling their businesses to thrive within the complex environment they are operating in.  

Combining insights from 20 interviews with trail-blazing purpose-led leaders, extensive literature and a survey of over 2,000 employees, this white paper aims to provide a practical guide on how to develop leadership practices to facilitate purpose-led transformation.  

 

From ambition to action: how to attain purpose-led transformation (PDF, 5 MB)

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Purpose-led businesses place their organisational purpose at the core of everything they do and use it as the compass to guide decision-making and deliver wider stakeholder value.

Extensive research has highlighted the benefits of being a purpose-led business, demonstrating how it leads to higher levels of growth and resilience to disruption.1,2 However, beyond the compelling business case, the expectations and priorities of employees and prospective talent pools have shifted and there is an increased demand for organisations to provide more meaningful work. This is supported by our data, which showed that 84% of employees feel it’s ‘very important’ or ‘important’ to work for an organisation that positively impacts society, demonstrating the critical role purpose will play in attracting and retaining talent. 

This shift towards being more purpose-led is also mirrored by customers and investors. 72% of consumers feel it is more important than ever to buy from companies that reflect their values,3 and 88% of institutional investors claimed to hold an organisation’s ESG metrics to the same level of scrutiny as financial and operational reports.4 However, despite this, purpose-led transformation for many organisations remains surface-level. Our survey found that 71% of employees think their leaders still ‘always’ or ‘often’ make critical decisions solely based on financial considerations, such as profit, costs and growth. 

Pitfalls of purpose-led transformation

Being purpose-led requires much more than a great purpose statement. To become truly purpose-led, organisations require tangible action to accompany their declared intent. However, with companies increasingly being recognised as proactive drivers of global change, a common pitfall is failing to deliver this authentically. This so-called ‘say-do’ gap can lead to a disconnect between the articulated purpose and day-to-day lived experience. For example, our survey highlighted that 86% of employees say their organisation has a purpose statement, but almost half (42%) of them didn’t know what it was. Leaders play a critical role in not only stating purpose ambitions, but also in following through with action.

From ambition to action report

84%

of employees feel it’s ‘very important’ or ‘important’ to work for an organisation that positively impacts society.

Purpose-led leadership: what leaders need to do differently 

Our research revealed certain behaviours and ways of thinking that underpin great purpose-led leadership. From these findings, we have identified three key behaviours that will enable high-performing purpose-led leaders. Below is an overview of each – download our white paper (pdf) for a more detailed insight.  

How to activate and embed purpose-led practices

Best practice for getting on the right track

A critical aspect to ensuring successful purpose-led transformation is identifying an organisational purpose that inspires, is practical and authentic. Getting this first step right is pivotal in realising purpose-led ambitions and enacting real change. Below are two key principles that will help an organisation get its purpose on the right track:

  1. The purpose statement should be co-created – leaders must consult their people in the creation and development of the organisation’s purpose, using diverse minds to craft an effective purpose.
  2. Purpose must be coupled with strategy – having a business model and strategy that places purpose at the core will enable purpose-led action.

Best practice for staying on course

Ensuring sustained purpose-led activity is critical in enabling successful transformation. Below are four top tips on how to effectively implement purpose-led transformation across the business. 

  1. Engage senior leaders and role model new habits in decision-making - consider how each function must be modified to enact positive purpose-led change, then ensure these changes are filtered through the organisation. 
  2. Create personas to inform decision making – forming a purpose-led persona creates a tangible way to visualise the impact of the day-to-day decisions that are made.
  3. Establish how to measure and report purpose – integrate purpose-led metrics, such as environmental, social and governance (ESG) and long-term value reporting, into annual reports. 
  4. Reward people for driving purpose-led transformation – clearly link purpose with how people and the leadership team are rewarded to demonstrate commitment. 

Summary

As purpose-led transformation is becoming increasingly integral to long-term business survival, understanding the role that leaders play in driving this is critical. Purpose must infiltrate the core of organisations’ operating models, creating an environment in which purpose-led decision-making and action are inevitable. To discover more about how to develop leaders that facilitate purpose-led transformation, download the full research (pdf).

About this article

By Diani Wilmot

Senior Research Consultant EY Lane4, EY Professional Services Limited

Carries out impactful primary and secondary research into occupational and performance psychology.