Organizational Governance

Why Most Companies Are Failing at Purpose (And How You Can Succeed!)

This is the third in a series of articles examining how business leaders and companies can transform their corporate culture in order to succeed in the midst of the impending Purpose Revolution. Find links to the full series below.

By John Izzo | Published 6 years ago | About a 5 minute read

Image: Jamie Street (via Unsplash)

Why do some companies’ best efforts to embed purpose fail while others don’t? In our forthcoming book, The Purpose Revolution: How Leaders Create Engagement and Competitive Advantage in an Age of Social Good, we describe four reasons why some companies and leaders fail at purpose and offer proven practices to help you avoid these same pitfalls.

Purpose is not a strategy

Many leaders make the mistake of treating purpose as a business strategy to win talent and customers. At face value, this seems reasonable. But there is a catch with this approach — and it turns out to be a pretty significant one. The fact is, employees and customers can see straight through the focus on purpose when it is used solely for the sake of business.

Know too that, sooner or later, choices will need to be made between short and medium-term business interests and your higher purpose. Take the Volkswagen emissions scandal, for example. The decision to deceive regulators on emissions from diesel cars seemed good for business in the short term, by promoting and selling vehicles as “clean alternatives.” But what allowed that decision to be made? Was VW staffed by evil people who don’t care about the environment? Probably not. More likely than not, it was because VW’s focus on clean vehicles was driven by business interests rather than a belief in doing what’s right to make the world a better place.

The distinction between “doing what’s right” and the business case may feel like mere semantics, but we believe it makes all the difference. Your purpose must be authentic — not another short-term business strategy or gimmick to garner customer attention.

Making money is not a purpose

This is not to say that a purpose-driven company should not be focused on making money. On the contrary, research shows that companies that activate purpose are even more profitable than those that don’t. The point is whether profit or purpose is the main driver.

What leaders need to know is that most of the people who work for them probably don’t care how much money the company makes, how fast it grows or the increase in sales year over year. Employees do, however, care about being on a winning team, they want the company to make enough money to keep jobs secure, and want opportunities to contribute to making better products and services.

A strong driver of employee engagement is feeling pride in a job well done, of producing something that meets a real need. More than profit, employees need deeper satisfaction in line with their personal values and goals, and purpose-driven companies can help them achieve this.

Purpose is stuck on the wall

Years ago, we consulted a large company that had a grand purpose and values posted prominently on the wall of every office, framed behind a nice pane of glass. One day a middle manager casually said, “That is exactly where the values are in this company — on the wall and under the glass but never alive in the room.” Unfortunately, we see this situation all the time: companies failing because their purpose is stuck on the wall.

Many companies mistake idealistic statements for purpose. Such declarations are nice — and useful in many cases — but unless they are, as Walter Robb of Whole Foods told us, “a living document, alive in

the daily work and decisions,” they won’t activate purpose in your organization.

A principle to keep in mind is that the conversation about purpose is more important than the articulation. A well-articulated purpose is good, but what determines its effectiveness is how alive the conversation about that purpose is throughout the company.

Purpose is not a marketing program

Another reason companies fail to activate purpose is because they treat it as a marketing program. Like viewing purpose as a means, if you don’t believe in it and support it, it won’t pass muster. Leaders at companies such as 3M and Ford, who are working hard to foster purpose-driven cultures, emphasized to us the importance of embedding purpose into every job, especially on the operational side of the business.

The reason is simple: if you want to truly activate purpose, it’s best for marketing to amplify a purpose that already exists rather than promote one as a strategy. If your marketing team professes a vision out of line with the company’s reality, cynicism will be bred among the ranks of employees, and customers will sniff out your ingenuousness, setting up a game-changing disconnect between the “marketing purpose” and the “lived purpose.”

Five practices to activate purpose in your organization

Shift the dialogue from profit to purpose. Dedicate time in meetings for purpose, create purpose metrics or add purpose targets to scorecards.
Emphasize a long-term view to keep your purpose present in major decisions.
Align your brand’s core competencies with your social platform by making a clear, authentic purpose statement.
Every leader and team member should own purpose, sustainability, and social responsibility —not just the marketing team.
Systematically take purpose “off the wall” and into the work — read the mission statement at meetings, tell purpose stories in onboarding, and vet every big decision with purpose in mind.

In Creating Engagement and Competitive Advantage in an Age of Social Good, the series:

John Izzo

President, Izzo Associates
Purpose Revolution Group

Dr John Izzo provokes greatness in people and companies. He stretches leaders to dream even bigger through intentional leadership. He recently co-founded Blueprint, an NGO at the University of British Columbia that seeks to create a more sustainable world through enhancing men’s contribution to communities. A bestselling author, John’s books include the international bestsellers "Awakening Corporate Soul," "Values Shift," "The Five Secrets You Must Discover Before You Die," "Stepping Up" and "The Five Thieves of Happiness." His latest, "The Purpose Revolution (How Leaders Create Engagement & Competitive Advantage in an Age of Social Good)," was published in March 2018.

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