Putting purpose on the board agenda
Purpose isn’t your mission statement or your vision or values, it is why your business exists and it is now firmly being put on the board’s agenda. The new Corporate Governance Code emphasises the importance of ‘a clear purpose and strategy aligned with a healthy corporate culture’.
The evidence for having an organisational purpose is compelling: 65% of employees go the extra mile in purpose-driven companies, companies with a clear purpose deliver a 16x higher return and companies with a strong sense of purpose are able to transform and innovate better. A compelling purpose acts as an organisation’s north star and expresses the organisation’s impact on the lives of customers, clients, students and patients — whoever you’re trying to serve.
A good organisational purpose is simple. It gives everyone a strong sense of what you are about and is clearly differentiated from your mission, vision, values and strategy. To be effective it has to be built with a cross section of employees and tested on customers and stakeholders. People need to believe in it, both inside and outside of your organisation, that way it becomes a shared sense of purpose.
A purpose that resonates with your people also has to be authentic to your brand, clearly communicated and a non-negotiable — it should drive all actions and decisions. In essence, it’s your DNA. When defining your purpose, you are really asking ‘What is the world looking for from us?’
When organisations get purpose wrong it is just a slogan — it is not lived in the organisation and behaviours, attitudes and ways of working are not congruent with the purpose. If it’s only a marketing tool, advertised on banners and billboards and not a ‘lived experience’, then it’s not going to be seen as authentic. People should be able to feel your purpose in the interactions they have with you.
As board members we have a responsibility to ensure the purpose is well articulated and test leadership commitment to the purpose, ensuring it is being ‘lived’ at all levels. A good test for any board is for each member to independently write down what your purpose is and what it means. It is also helpful to survey a cross section of employees to test alignment. There is no doubt purpose should have a bigger role on the board agenda — as a topic it gets short changed currently. Going forward as board members we need to be strong advocates for purpose being a regular feature on the agenda.
Are you putting purpose on your board’s agenda?
Based in London and with over 24 years’ global experience, Karen Thomas-Bland is often cited as one of the top business transformation consultants and coaches in the world. She is a trusted, global board-level advisor and non-executive director, creating sustainable, long-term value for FTSE/Fortune businesses and PE funds. She writes for many publications including The Times, FT, Association of MBAs and Management Today.