October 20th, 2020
Purpose is becoming a very trendy management concept and we often get the question: isn’t this just another consultant fad that will go away sooner rather than later? Fair question. The main reasons why we believe this has gained a whole new dimension were mentioned last week – from Larry Fink’s letter to surveys on talent attraction. But there is probably something quite deeper than that and harder to explain. Let me try: If Purpose is about the Why, typically the question really leads you (either in personal life or in the corporate world) to the very bottom of any issue. Three whys in a row and you normally get to a situation where everything is on the table – exposure and vulnerability show up. That is why is hard and uncomfortable. You ask why we exist as a Company, and I do not think one needs to get to the third why to be talking about the key stakeholders which justify the true reason for the Company to exist. Worthwhile doing the exercise as a Team.
By the moment you get to that/those key stakeholders, aligning a strategy and an implementation plan that makes sense comes naturally. It will be and sound authentic. Purpose and authenticity are two sides of the same coin and they seem to show very clearly as key drivers in search of sustainability (be it economic, environmental or social).
As referred last week a few studies seem to indicate the growing evidence that purposeful companies have better financial returns. But still a long shot for most leaders to feel at ease with the idea. There are a few phases when it comes to use Purpose on the decision-making process:
Purpose is not part of it
Purpose is enough to say NO
Purpose is necessary to say YES but not enough (meaning… it needs to come with a positive economic return)
YES to Purpose is enough
Those few Companies that have reached the last degree truly believe that if the Purpose is there, it is just a question of time to witness economic performance improvement.
As a Company, where do you sit right now? Have a great and impactful week!
Nuno Moreira da Cruz
Executive Director
Center for Responsible Business and Leadership at Católica-Lisbon School of Business & Economics
