The role of purpose in organisational success

Evidence tells us that organisations that have a clearly defined and actioned purpose are more likely to grow fast*. But what is really meant by ‘purpose’ and to what extent is profit a competing objective? What’s the compelling argument for boutique consultancies to be leading the charge towards a purposeful future?

We brought together three experts with different perspectives, one from a specialist consulting firm, one from a charity and one leader of a sustainable business, to explore the role of purpose in organisational success.

In summary, the role of purpose in organisational success is to: 

Why does purpose matter?

Purpose matters for both people and organisations. After all, as Sarah Evans points out, humans are tribal and businesses are just formalised versions of these tribes. If we can find purpose, both individually and collectively, we are better off. Sarah referenced studies such as The Blue Zones study by Dan Buettner and his team which show people who have purpose (i.e. know what they are there to do) live longer, happier, healthier lives.

Evidence has also shown that finding meaning and purpose has influenced lower mortality, less cardiovascular disease, less loneliness, and better lifestyle choices.  

The panel were all in agreement that this translates directly to the workplace: For businesses today, purpose means faster growth, better work experience/engagement, and happier, more productive staff.

Sarah Evans points out the place to start; “It all starts with human need. That should set the direction, your north star, get that right and everything else follows. People gravitate to meaning and that results in staff and client attraction and retention, which in turn leads to profitability, longevity and resilience”.

This is supported by a study published by Harvard Business Review  which found that when companies had a clearly articulated purpose which was widely understood in the organisation, they had better growth compared to companies that hadn’t developed or communicated their purpose. Specifically, 52% of purpose-driven companies experienced over 10% growth compared with 42% of non-purpose-driven companies. Purpose-driven companies also benefitted from greater global expansion (66% compared with 48%), more product launches (56% compared with 33%) and success in major transformation efforts (52% compared with 16%).

How to avoid the purpose pitfall

Retrofitting the ‘Why’ after they have already developed the ‘What’ can be done badly if it’s not core to your business or used simply for cynical commercial reasons. It must be authentic. 

Many of the challenges that companies encounter with purpose stem from a perceived lack of alignment between how they behave and what they say they stand for.  

There is a high risk of reputational damage if you are perceived to be doing things for the wrong reasons. Retrofitting the ‘Why’ after having already developed the ‘What’ can be damaging, particularly when driven by commercial reasons. The message; it must be authentic. 

Take for example Knorr (a brand known for stock cubes and gravy) suggesting that consumers could “change the world by changing what’s on [their] plate.” Or WeWork in its 2019 investor prospectus describing subletting office space as striving “to elevate the world’s consciousness.”  Statements like these give ‘purpose’ a bad name! 

As Sarah Evans advises, “Find the human need at the end of the value chain and keep that in focus. For consultancies this can be hard to identify. It’s not ‘feeding the nation’ but it might be ‘fuelling innovation that helps to feed the nation’ for example”. 

Try asking, “What is the point of our business?” Or “What have we got to give?” This can trigger a much more powerful conversation. 

Does it have to be about saving the planet?

Having a clear (and authentic) purpose rooted in social and environmental causes has become a commercial advantage.

The panel were all in agreement: We have an obligation as businesses to address long-term environmental and social challenges. Business leaders will be left behind unless we respond. 

The simple truth is we’re operating beyond planetary limits. The direction of travel is clear with a number of strong forces at play: Company boards are responding to increasing consumer awareness, increased shareholder pressure, and a new purpose-driven generation are demanding greater consciousness from business leaders.   

The number of British consultancies achieving B Corp status has doubled in the past year, citing its impact on winning business, attracting talent and bringing in investment. 

Having a clear (and authentic) purpose rooted in social and environmental causes has become a commercial advantage.  

Karen Sutton, founder of the Global Good Awards explains, “Companies that demonstrate a commitment to sustainability by considering factors such as their environmental practices, employee working standards, ethical sourcing policies, and community engagement initiatives are now seeing signs of a positive shift in winning contracts when up against those that don’t”.  

“Organisations asking you to tender for work now insist on seeing your measured carbon footprint. Failing to act now WILL result in business loss in the next 1-2 years, without a doubt”. 

Boutique consultancies are better placed than any to be ahead of the curve, lead their clients and other industries, and drive the change. As Mark Jankovich points out, “Consultancies are core to being able to navigate today’s challenges, if you like change, you’ll thrive on this”. 

For good AND for profit – a balanced view

While there is no doubt that the world needs business to take action, purpose and profit don’t have to be in conflict. This is a balanced view about long-term growth. As Peter Czapp, co-founder of The Wow Company and Beautiful Business says, “We will not get very far without profit: It is the fuel for the journey. The investment we make in our teams and in our people, which initially come at the expense of profit, we get back by a significant multiplier in future profitability. Sacrifice it for the short term, you’ll get it back in the long term.” 

What next? Top tips from the panel

1. Ask questions to be clear on your purpose. Read these questions from Sarah Evans at Cogent Action to get you started. 
2. Calculate your climate impact, start by measuring your Scope 3 emissions. You can’t manage what you haven’t measured. Consider using a consultancy like EECO2
3. Get a strategy framework in place to help you deliver on your purpose. The B Corp assessment and certification process sets a standard, find out more here
4. What does ‘doing good’ look like for business? Here are the top 3 changes you can make. Invaluable insight from Karen Sutton, founder of Global Good Awards

Our panel

• Sarah Evans, co-founder of Cogent Action, sustainable transformation specialists 
• Nicky O’Malley, Head of Corporate Partnerships at Global Action Plan 
• Mark Jankovich, Founder and COO of Delphis Eco, manufacturers of eco-friendly cleaning products 
• Marc Jantzen, Founder and CEO of The Consultancy Growth Network 

*The Consultancy BenchPress 2024 survey of boutique consultancies, showed that those consultancies that have a clearly defined and actioned purpose are more likely to expect fast growth next year. 30% of consultancies that have defined their purpose and used it in some way in the business saw fast revenue growth, compared to 21% of those that hadn’t defined their purpose or didn’t action it in any way.