Purpose is more than a cause. It is a wholesome way of being and operating for any organization. As I argue in my book, The Purpose Effect, purpose is truly the secret sauce between financial success, business longevity and ‘doing good’ in society. It even aids employee engagement.
When global giant Unilever, for example, shifted course in 2009 and decided to put purpose on par with the need for good profits through its ambitious Sustainable Living Plan, its employee engagement rose from the low 50s to the high 80s. But the company also witnessed its market capitalization rise from €63 billion to over €100 billion while its earnings per share grew from 1.16 to almost 2.00.
Purpose ought to become the reason a business is in business. Here’s why:
If an organization exhibits a high degree of purpose in its mission and objectives—taking a stand to benefit society—there is a very good likelihood that employees will more easily demonstrate purpose in their roles at work, become engaged, while adding to their own personal sense of purpose in life as well.
It is no coincidence that the organization, society and the employee greatly benefits when this occurs.
Another company that understands the purpose formula is Salesforce.
“When we started the company, we actually built giving back into the start-up process. We said from the very beginning we are going to create a company based on three things. Number one, software delivered over the Internet—basically unheard of in 1999. Number two, a new business model, which was buy software on a subscription basis— again, unheard of at that time. The third was a new philanthropic model—which is to bake it into your company as you begin your start-up process I started when the company was 50 people big and we’re now 20,000 employees globally. I think what we’ve learned is that it creates a great company of high performers.”
These were the words of Suzanne DiBianca, the Chief Philanthropy Officer and EVP of Corporate Relations at Salesforce, a company that has very high employee engagement, revenues exceeding $6 billion, and the no. 2 spot on Forbes’ “The World’s Most Innovative Companies” list.
Defining a higher sense of purpose at Salesforce was very important to Marc Benioff, founder, Chairman and CEO of Salesforce. Purpose is something that allows Salesforce to function as a leader in the CRM space, but also in society on the whole. “Companies can do more than just make money, they can serve others,” says Benioff. “The business of business,” he continues, “is improving the state of the world.”
Salesforce solidified its organizational purpose by instituting what it refers to as the “1-1-1 Model.” The model utilizes Salesforce’s technology, people, and resources to help improve communities around the world. The model breaks down as follows:
- 1% of Salesforce’s equity is set aside to deliver grants in the communities where Salesforce employees live and work;
- 1% of Salesforce’s product is donated to non-profits and educational institutions;
- 1% of Salesforce employees’ time is donated to communities around the world.
“We do it,” said DiBianca, “because we want to build a great company that serves all stakeholders, not just shareholders.”
An organization—as Salesforce and Unilever demonstrate—ought to be in business to serve society, not solely those looking for economic rents. That is why purpose is more than a cause. It should become the way to operate a business. As management expert and author Charles Handy once wrote, “Let us be clear, profits—and good profits—are always essential, and not just in business. But the myth dies hard, the myth that profit is the purpose.”
When I asked how Salesforce employees demonstrate a sense of purpose in their roles—for their organization and society at large—DiBianca beamed, almost anticipating the question.
“You have no idea how deeply embedded it is,” she began. “This morning, for example, I ran into a tour of fourth graders. A group in our finance team brought them in as part of the ‘Circles to Schools’ program. It was not a corporate initiative, just an example of a team coming together, rallying to support the community.”
When a new employee joins Salesforce, the 1-1-1 Model is the highlight of orientation. Once they receive their computer, company messages, and so on, Salesforce sends the new cohort of recruits into the community. On an employee’s very first day, they go out and spend time doing something useful as a volunteer. It is an example of the company’s intent to walk the talk of its higher purpose.
I believe that the enactment of purpose results in a higher calling for both individuals and the organization.
There are four key actions leaders could take to shift the organization’s purpose:
- Serve all stakeholders, not simply profit seekers or shareholders. When an organization redefines who it ought to be serving (customers, employees, community and society) the profit seeker or shareholder will be rewarded as an outcome of its higher purpose.
- Pledge a percentage of employee volunteer time, company profits and in-kind services and/or products to the community, one of your newly established stakeholders. As Salesforce demonstrates, when specific resources are dedicated to the community, all stakeholders end up benefiting.
- Craft a transition plan. Shifting the culture and operating practices of an organization does not occur at the flick of a switch. The organization must be prepared to change many processes and existing habits, thus a proper and long-term transition plan is needed.
- Write an organizational declaration of purpose. All team members—indeed all stakeholders—will benefit from a guiding statement that helps to define its stakeholders and “why” it is in business in the first place. This one or two-line statement becomes the new “North Star” of the organization.
When purpose becomes an organization’s DNA, purpose is no longer a cause, it simply becomes the way it has always done things. It’s the organization’s higher calling.
It’s also the right thing to do.