David Bach, Dean of Innovation and Programs and Professor of Strategy and Political Economy at IMD and Alyson Meister, Professor for Leadership and Organizational Behavior at IMD, are leading executives in an interactive session to delve into their companies’ purposes and look at how and why this matters in the bigger picture at IMD's OWP liVe June 29-July 1.
Why are people talking about purpose?
Purpose is more than just buzz. The reason there is so much talk about it is because it will likely be the defining factor of businesses in the coming years.
We are about to experience the largest demographic wave in history, with millennials making up 75% of the workforce by 2025. Research shows this generation of workers is looking for purpose in their lives and careers above all else. They want to work for leaders who share their vision, who can inspire them and make them feel like they are part of a larger mission. In fact, three quarters of these people want to work for an organization that has social impact, so much that they are willing to take a cut in pay to work for a company that has social responsibility.
With numbers like that, it’s clear these workers aren’t just engaging in wishful thinking. If companies want to attract and retain the best talent, they are going to have to show purpose behind their mission and a reason for existing beyond the bottom line.
This has been recognized by management scholars who say purpose should be at the core of an enterprise. They are calling on businesses to require management to state the company’s purpose and demonstrate their commitment to it, and this is not just coming from academics. According to the 2019 Business Roundtable statement, “The purpose of a corporation is to promote an economy that serves all.”
What happens when you lack purpose?
Meister asks “Is a brand without a purpose just a logo?”
If it is just a logo, it may not be a very effective one. If you look at the ad campaigns of major companies across the globe, they are all embracing the need to show greater meaning behind their brands. Their ads demonstrate how they are helping society, fighting climate change and becoming more sustainable because this is important to not only their employees, but the consumer as well.
How do you find your purpose?
Colin Meyer, author of Prosperity: Better Business Makes the Greater Good lays out clearly what he believes the purpose of corporations should be “to produce profitable solutions to the problems of people and the planet, and not to profit from producing problems from people or the planet.
Bach and Meister have linked research about personal purpose to business strategy and how it can activate purpose at the organizational level. They are helping leaders define their purpose and integrate it into their business model. They have identified several pathways to finding your purpose. People do not find purpose through their actual day to day activities at work, but rather through connecting with the values and identity of the company. This is why it is important for leadership to clearly define their values for all stakeholders. For instance, inspired workers believe that they are making customer’s lives better through their efforts.
So if you haven’t yet identified your organization’s purpose, it is critical to move forward with it now. This isn’t just a mental exercise, as your purpose will heavily influence both your customers and your employees. Companies that fail to do this may find themselves not only lacking purpose, but existence as well.