The Purpose Of A Company Must Be Much More Than Just Words
The purpose of a corporation extends beyond its mission statement or chief executive officer’s vision. In fact, according to Gallup, actions speak louder than words when it comes to conveying an organization’s mission to its stakeholders, consumers, and employees.
A company’s purpose is fundamentally an outspoken declaration of why it is in business. It expresses the organization’s values in terms of history, ethics, emotion, and application. The driving factor behind a company’s ability to define its actual brand and establish the ideal culture, regardless of how it is expressed to employees and customers, is its mission.
Making that mission a reality, however, is a constant struggle for leaders, and it begins with their workforce. Gallup frequently discovers discrepancies between what organizations want their purpose to be and the brand and culture their workers actually produce through their activities when researching the significance of purpose alongside brand and culture — the linked factors that make up an organization’s identity.
According to Gallup research, just around a third of American workers strongly think that their company’s mission or purpose gives them a sense of importance in their work. Only 28% of employees in the hotel sector strongly agree with the following statement: “I know what my company stands for and what makes our brand(s) different from our competitors.”
These results imply that businesses are having trouble making a strong connection between their stated mission and the goals for their brand and the work environment they foster for their employees. Misalignment is also expensive; Gallup research at a client organization shows that employees who are more in line with their company’s identity outperform employees who are less in line on important business performance criteria.
The ability of an organization to uphold its brand promise and create loyal patrons is also influenced by its purpose. Businesses create, develop, and expand thriving brands based on compelling, well-stated goals. Customers notice inconsistency between a company’s brand promise and its brand behavior when gaps exist between the company’s aspirational culture and its actual culture.
Customers give a brand twice as much of their wallets (47%) as those who aren’t associated with that same brand (23%), but, when promise and behavior are in line when they are aligned with a brand promise. Having and using a purpose as an anchor can provide you a competitive edge: Competitors may be able to copy a firm’s goods and services, but that company can successfully stand out from the crowd by enlisting the help of employees who can carry out and uphold its mission and brand in the marketplace.
How a Company Can Show Its Purpose by What It Chooses Not to Do
One of the most effective ways to make a company’s mission come to life is to let it guide important choices. Although statistics and projections are frequently used to inform strategic decisions, an organization’s purpose serves as a long-term constant guidance. Decisions made in the short term frequently conflict with the mission and long-term strategic objectives of an organization. Sometimes a corporation must forgo immediate financial rewards in order to establish and position itself for long-term success.
Case Study: Three instances
Southwest Airlines has decided not to charge passengers for checked luggage in the past. Yes, charging such a tax would bring the airline a quick windfall. In contrast, the airline’s mission statement reads, “To connect People to what’s important in their lives through welcoming, trustworthy, and affordable air travel.” This aim is congruent with the decision not to charge a client for her first two pieces of luggage, and the company distinguishes itself and shows its dedication to this mission in its national advertising campaign, “Bags Fly Free.”
CVS made the decision to stop selling tobacco products at its retail outlets in the United States, forgoing billions of dollars in potential profits. The CEO of the business at the time asserted, “Put simply, the sale of tobacco products is inconsistent with our purpose,” which is unwaveringly defined by the pharmacy as assisting individuals in achieving better health. It might have cost CVS money to prioritize mission over profit in a competitive market. According to a Gallup Panel research, however, five times as many consumers claimed they were more likely to shop the brand (25%) than not (5%), even though 51% of consumers indicated they were neither more nor less likely to do so as a result of the company’s choice. By making the decision to stop selling cigarettes, CVS furthered its mission and increased its chances of attracting new customers. The business is still steadfast in its choice, recently giving up its membership in the U.S. Chamber of Commerce to avoid any potential conflicts with its mission to “help people on their path to better health.”
A sizable local bank changed its practice of charging clients for debit cards. The penalty was actually eliminated by the bank when customers satisfied specified minimum deposit and balance requirements because it was comparatively minor. However, unintentionally, individuals with lower financial means frequently ended up paying the price. The bank’s mission, which focused on fostering great financial well-being for its consumers, was at odds with charging a fee to this particular customer segment. Following employee feedback to the company’s leaders, the decision was made to totally abolish the fee, making it apparent to both customers and staff that the bank was committed to its stated objective.
These businesses have a strong commitment to purpose, one of the four essential components (the others being clarity, alignment, and consistency) required to create an effective organizational identity. Though the majority of executives can easily describe the ideal identity of their business, they frequently struggle with making the strategic choices that strengthen the firm’s dedication to its purpose.
Every choice a leader makes puts them up against the task of living up to the mission of their organization. Sometimes businesses demonstrate their deepest dedication to their mission by refusing to accept short-term profits that are at odds with their declared goals. These choices present chances to enhance an organization’s reputation among existing and potential clients.
The Ideal Culture Is Not Just Concerned With Employee Satisfaction
Making employees happy or content isn’t what it takes to have a strong workplace culture with superstar employees who know how to win new business; firms struggle when they believe it is.
It’s true that motivated people have a positive outlook on their jobs and working environments. However, involvement is not based on a vague emotion. Measuring employee happiness or contentment levels and meeting their needs frequently fall short of achieving the core objective of employee engagement, which is improved company results.
When employees are treated as stakeholders in both the company’s and their own futures, organizations are more successful in increasing engagement and achieving better business performance. This entails concentrating on practical performance management tasks including outlining job requirements, supplying individuals with the tools they need to complete their tasks, offering development opportunities, and encouraging productive working relationships.
According to Gallup’s State of the American Workplace study, the majority of the American workforce (51%) is not engaged. These workers are uncaring and have no strong feelings about their work. They pose a risk, one that might lean either positively or negatively.
Many disengaged workers seek inspiration in their work. They are the “show me” group who require more encouragement to deliver their best work. Positive emotions, including happiness, are frequently byproducts of participation but shouldn’t be mistaken for the main results. Instead, the main focus should be on factors that motivate employees and influence outcomes, such as expectations that are clear, opportunities for employees to do what they do best, development opportunities, and voice in decision-making.
Clearer and better results are obtained when engagement is approached as a business strategy. In order to ascertain the association between engagement, as determined by Gallup’s employee engagement survey, and business-/work-unit profitability, productivity, employee retention, and customer perception, Gallup conducted the ninth iteration of our meta-analysis (a study of studies) last year.
The results of the most recent meta-analysis are consistent with the results of every prior edition, despite significant changes in the economy and technology. Simply put, engaged workers outperform non-engaged workers in terms of business results across industries, firm sizes, nationalities, and both good and bad economic times.
Based on a composite of financial, customer, retention, retention, safety, quality, shrinkage, and absenteeism measures, business or work units that score in the top quartile of their company for employee engagement have nearly twice the odds of success compared to those in the bottom quartile. The success rate for individuals in the 99th percentile is four times higher than for those in the first percentile.
Business units in the top quartile experience benefits in the following areas, among others, when compared to those in the worst quartile of engagement:
Showing up and sticking around: Highly engaged business units experience a 41% drop in absenteeism and a 17% boost in productivity because highly engaged employees make it a point to show up to work and accomplish more work. Additionally, engaged employees are more inclined to stick with their company. Highly engaged business units experience a 24% decrease in turnover in organizations with high turnover. Gains in low-turnover organizations are much more striking: Business units with high levels of engagement turn over 59% less. Organizations with an annualized turnover of 40% or above are considered high-turnover, whereas those with an annually turnover of 40% or less are considered low-turnover.
Customer outcomes: Engaged staff members often show up for work and are more dedicated to quality and safety. Naturally, these personnel support their companies’ excellent organic development and efforts to enhance customer relationships. Business units with high levels of engagement enhance sales by 20% and customer ratings by 10%.
Profit: The above results combine to boost an organization’s profitability. Employees who are more engaged are more attentive, productive, and aware of client needs. They also pay closer attention to procedures, rules, and procedures. The collective actions of highly engaged business units lead to a 21% increase in profitability.
The Right Culture Can Be Created
Employee engagement has long been a problem in the American workforce, but it may now be more important than ever for attracting and keeping top talent. A stimulating workplace is a basic expectation and a prerequisite for the modern workforce. Many workers won’t accept working for a company that doesn’t strategically value engagement. This means that for leaders, fostering an engaged culture is no longer an option—it is essential.
It takes more than just completing an annual staff survey and handing it off to managers in the hopes that they would take something away from it that will alter the way they manage. It necessitates a detailed examination of how crucial engagement components fit into an organization’s performance growth and human capital plans.
It takes effort and dedication to engage staff, but it is not impossible. A third of the total U.S. workforce is actively employed. The typical level of involvement among our first-year clients is 30%, and many businesses come to Gallup with engagement levels of much lower percentages.
However, as they alter their strategy, these firms start to see gains in performance. The degree of involvement among most recent Gallup clients—the recipients of the Gallup Great Workplace Award—is 44%, and it is much higher among clients with the highest levels of engagement. In these firms, there are 14 engaged employees for every actively disengaged person, a ratio that is seven times higher than the national average, and an average of 70% of employees are engaged.
Organizations with high levels of engagement have similar beliefs and procedures. include the following:
• They understand that fostering an engaged culture begins at the top • Their leaders prioritize engagement as a competitive advantage.
• They are transparent and reliable in their communication.
• They give the utmost attention to selecting the appropriate KPIs and to selecting and training excellent managers.
Additionally, managers are held responsible for their teams’ measurable levels of engagement as well as how it connects to their teams’ overall performance in highly engaged businesses. They make certain that supervisors engage workers from the very first minute of their first day on the job.
These organizations put a strong emphasis on the development of both individuals and teams, and they offer well-defined, comprehensive programs for leaders and managers. Employee engagement is not a yearly “check-the-box” activity, but rather a vital factor in their people strategy.
Develop Your Organization’s Brand
Purpose, value, and culture are the three components of a cohesive and full identity that can support an organization’s long-term success.
Have you ever questioned how businesses can display lovely vision and values statements on their walls while giving you a different image as you walk through their hallways? What is said and what is real frequently feel like two distinct worlds.
Organizations, however, cannot afford this misalignment because, without it, they will struggle to connect their mission (reason for being), value agenda (what they stand for), and culture. By establishing an identity, translating it from the organizational to the individual level, and explaining the significance of the identity for each member in the organization, organizations of the future have closed this gap. These three components—purpose, values, and culture—combine to form a coherent and comprehensive identity.
1. Create an achievable goal to discover your “why.”
A company should begin with a clear and motivating declaration of its mission that explains how it will use its superpowers to improve the world. A worthwhile goal is both inspirational and doable. A purpose requires three things in order to be actionable:
o A small group of purpose themes—about three—that highlight the people and causes that matter to an organization.
o A series of audacious, ten- to thirty-year commitments for each theme. Reaching carbon net neutrality by 2050 might be a brave goal.
o Each bold promise has one to five-year metrics associated to it. A corporation could set a deadline for installing green technologies in order to attain carbon net neutrality.
By using this strategy, a company can transform its long-term goals into a list of doable, understandable present goals that are related to the value agenda.
2. Integrate your mission with your value agenda
Only when a company converts a purpose into a strategy with a value agenda that connects the organization with value creation can a purpose deliver outcomes. The strategy should outline the workstreams and activities required to attain the metrics outlined in the purpose, relating them to the actual tasks that need to be completed in order to benefit individuals who are important to the business.
As a result, the purpose and value agenda are logically linked from the purpose statement all the way down to the initiative charters