Corporate purpose and purpose driven leadership 

Purpose is the higher value of a company, it goes beyond profit. It is the why of your organization and  gives work its meaning. 

Purpose is about where your companies’s journey is taking you, the core element of your strategy. Culture is the combination of values and habits that will get you there.  

A purpose statement defines the purpose in order to direct the company’s activities. It needs clarity, honesty and positioning to be effective. 

Clarity: Customers not familiar with your brand should understand what you do and intend by reading the statement. 

Honesty: Exaggeration or including false information can harm your business. Be aware of overpromising and under delivering – the quickest way to alienate customers.  

Positioning: An honest purpose statement highlights what makes your company stand out from the competition. Know well your industry and analyze competition. Line out your advantages without putting down others.  

 Purpose describes why an organization exists and what it stands for. Proper purpose should make a significant contribution to the value-creating constructive coexistence of business, society and environment. 

Purpose will serve shareholders, customers, employees, suppliers and the community.  

It can be defined in two different ways: 

1. Social and ethical responsibility of companies. This is a normative approach in which companies should show attitude and make a contribution to overcome major global challenges on earth and in society. 

2. Identity and creation of meaning due to changed expectations of employees. Purpose in that sense will add to employer branding and can help drive and accept transformation in a company. 

Human individuals, society, governments and the market nowadays ask to shift the single thought of only profit in a company towards sustainable action, towards a more sustainable world.  

The confrontation with and clear definition of corporate purpose is consequently essential. 

Corporate purpose becomes economically, ecologically and socially relevant and crucial to the success of a company and its product. 

In October 2022 Morgan Philips Germany hosted one of its well-known MP talks – executive networking dinners in Frankfurt. Theme was sustainability. One of our expertise speakers was Xenia Barth, CEO of Merz Consumer Care.  

Mrs. Barth talked about Purpose Marketing and the importance of a brand to contribute in a positive and sustainable way to today’s society. She considered connecting a brand with its appropriate purpose crucial to its success. Mrs. Barth also talked about herself feeling the responsibility to contribute to sustainability and she was authentic and convincing. Under her guidance, teams working on sustainability at Merz, form intrinsically without being implemented from outside. 

This is what you want. Everybody in the economy and society benefits.  

Let’s have a look at the challenges of organizational purpose and a more sustainable life.  

Most companies so far are built with a structure and culture that remains static during lifetime. This may have been feasible in the past but today with a constantly evolving market, changing technological conditions and not to be foreseen occurrences like the pandemic, which changed the  world of work, it is outdated. Today we need to adapt to these changing situations, we need to be flexible and agile, we need to accept change in order to remain competitive and resilient in situations of crisis.  

Defining, creating and implementing purpose constitutes significant change. It is easier to change the ‘body or mind’ of your organization like restructuring teams or proposing a feedback culture. This will take a moment but it will be accepted and work out. To implement purpose means to touch the spirit. You have to connect deeply with employees in order to find a shared meaning.  

Not all work is equal and you may find resistance or difficulties in engaging somebodies mind. Think of very repetitive and simple kinds of work or certain industries, products or services.  

To engage somebody and find a common purpose to identify with you have to embed a single role in a connected whole. Sometimes a stronger narrative is needed and the manager or leader has to articulate this.  

Also, imagine a rather infancy product as the plastic cover of a car screw. What purpose do you transmit, how do you translate this manufacturing to a greater sense of being for your team?  

Purpose creates engagement, the lack of it may create the opposite, non-engagement. Lots of companies did not have a strong sense of purpose as this had never really been cultivated. Thus, employees did not consider purpose. They came and worked to be paid. This is changing with new generations and the call for sustainability.  

Another important factor is time. Most companies, especially when they depend on investments and need to focus on numbers quarterly, do not think long term. Purpose is a longer-term thinking and strategy.  

The Management style also contributes to the successful establishing of purpose. Purpose requires a different approach of how we think about work. Leading from purpose instead of KPI’s is new, not to say revolutionary in a product or service selling company. The managers do not simply give orders. They will instead enhance autonomy and engagement. They do need to acquire that new mindset themselves without being afraid of having to give up a position.  Purpose driven leadership is a management form supporting the core purpose, culture and values of a company when making business - or decisions as for innovation. 

This requires awareness and insight of a leader: what are your beliefs and values, what are the drivers and how do they respond to internal and external stimuli?  

Self-awareness is the difference between a reactive and a proactive leader. Once a leader is aware he/she will easily communicate, follow and guide by these values and the purpose, forming not only better employees within the team but also defining the company as a place of better humans beings. It is not enough to sell a great product or make profit. Purpose driven leaders create brands with values shared by all. Purpose driven leadership means creating motivating and fulfilling work, it means empowerment, fostering engagement, retention and loyalty as well as overall happiness, it means providing the organization a competitive edge. 

The base of implementing purpose is to revamp the company culture. Culture and purpose go hand in hand. Culture represents the ideas, beliefs, values and attitudes between all in the company. Culture change, innovation and market competition are among the leading company challenges and require charismatic aware leaders.  

Purpose inspires. Values guide. Habits define.