What Makes A Purpose-Driven Organization? 4 Misconceptions About Purpose-Driven Companies.

The idea of purpose in organizations has been around for a while now. But the number of folks who believe they truly work for a purpose-driven organization hasn’t increased all...

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May 28, 2020
Team Engagement

And yet in the 20 years since Gallup started administering the survey, the percentage of engaged employees has hovered between the mid-20s and the low-30s the entire time. We know that people want a sense of purpose, and they want it for more than just their personal lives. They want it at work as well. But we also have to admit that a lot of organizations stumble in portraying that purpose in a way that helps their people feel their job is truly important.

In this article, we’ll review four misconceptions about purpose-driven organizations that cause a lot of those stumbles. And we’ll share how to know whether or not you’ve got a sense of mission or purpose that will truly drive motivation in your organization.

1. Purpose Is Not Corporate Social Responsibility

The first misconception is that a purpose-driven organization equals corporate social responsibility (CSR). And no one would say this outright. No organizational leader would just say, “We just give a certain percentage of our profit to social causes; therefore, we are now a purpose-driven organization.” But if you look at the way organizations talk about their CSR, it starts to reflect that opinion. They use phrases like “doing well by doing good” when they send out press releases about their donation to a local food bank as if that small percentage of their revenue is suddenly the justification for their entire business success.

It’s not. It’s just a donation.

Often times, the business model of the organization may actually be in contrast to some of those causes. Petrochemical companies buying carbon offsets, for example, or businesses that perpetuate inequality donating to homeless shelters and food banks.

In contrast, there are organizations whose business models—whose entire purpose—is in and of itself a form of corporate social responsibility. One of my favorite examples is a Vancouver-based company named Pela. Their most known for the debut product, a biodegradable smartphone case. Unlike nearly every other smartphone case, their products aren’t made from plastic. They’re made from pure organic materials that biodegrade when composted.

They found out how to take waste products from farming and turn them into a moldable plastic. And using that technology, they make products that consumers so often use for a brief time and then toss in a landfill for 10,000 years. But within 10 years, Pela’s products become waste-free.

That’s not corporate social responsibility; that’s true purpose.

If you ask anyone inside of Pela, what are you working for? They’ll tell you the same thing. “We’re working for a waste-free future.”

2. Purpose Is Not Just A Mission Statement

And while a strong sense of working for a positive outcome or cause is important, many organizations feel like re-writing the mission statement will do the trick. But that’s actually the second misconception about being a purpose-driven organization. Your purpose as an organization is bigger than your mission statement.

Mission statements are often a relatively terrible way to convey a sense of purpose to employees because we have a very one-and-done mentality around them. And that whole one-and-done process is itself flawed. We send off the senior leaders, or we send off a cross section of employees, to some off-site resort where we pay a consultant $20,000 to come up with phrase that gets engraved on a glass plaque and installed in the company’s office. And that’s about it. No long-term consideration, which is why its long-term effect on a sense of purpose is pretty minimal.

As evidence, consider a purpose-driven company that, for a long-time, had a pretty bad mission statement. For many years, The Hershey Company had a simple but meaningless mission statement: undisputed marketplace leadership.

It was the kind of mission statement that might inspire a Wall Street analyst, but wouldn’t inspire a sense of meaning in employees. Yet even while this was the mission statement, employees still had a strong sense of purpose to their work. Why? Because of the little-known fact that the majority shareholder of Hershey is a nonprofit school for orphans started by Milton Hershey himself. The school owns the company, and employees know who they’re working for.

3. Purpose Is Not Your Business Model

And it goes beyond just a mission statement. Installing a sense of purpose in your organization doesn’t even mean altering your business model—that’s another misconception. While most stories in the business media about purpose-driven organizations seem to inevitably lead to a profile of some BOGO company—buy our product and we’ll give a product to someone in need—it doesn’t have to be that way. Leaders can inspire a feeling of purpose by focusing on how the business model is executed, without changing the fundamental building blocks.

Consider Paul O’Neill’s transformation of Alcoa through the 1990s. When O’Neill took the helm of the struggling aluminum manufacturer, he didn’t change the business model or even engage in the typical cost-cutting that CEOs tasked with raising the stock price tend to focus on. Instead, he inspired a sense of purpose in employees by charging them to focus on the safety of their fellow workers. He aspired to make Alcoa the safest manufacturing company in the world, with zero accidents. Protecting the safety of themselves and their colleagues became the purpose, and the business model was left unchanged.

Except the business was changed dramatically. Because that new sense of purpose inspired employees at every level to study all elements of production, which led them to make production improvements and efficiencies. And when there are no accidents, nothing is stopping the production line, which makes the overall productivity increase dramatically.

Paul O’Neill never changed Alcoa’s business model, but the sense of purpose around safety changed the company. And that purpose stills drives Alcoa today.

4. Purpose Is Not What You Sell

And if purpose isn’t necessarily about your business model, then that leads us to the fourth and final misconception about purpose: it’s not what you sell either.

Yes. There are a variety of purpose-driven organizations whose sense of meaning and mission are drawn directly from the product offered—they sell a disruptive innovation or sustainably sourced consumer product with zero environmental impact. But for every company that makes headlines because of what it sells, there’s a purpose-driven company that sells something boring.

Consider The WD-40 Company. They sell one product, WD-40, that is basically just a special formulation of different oils. If you have a door that squeaks it might seem like a lifesaver, but fundamentally, it’s just oil. And there are lots of other oils that do largely the same job. But WD-40 has built a cult following around this one product, and much of their success comes from the sense of purpose the company has built. It comes not from what they sell, but from what they focus on: each other.

Led by CEO Garry Ridge, WD-40 has been focused on creating a “tribe” where individual employees see themselves as striving to build a work culture where everyone wins, where everyone feels taken care of, and where everyone can develop a meaningful career. It’s not about the product, it’s about the company culture. If you ask people at WD-40, what are you working for? They’re not trying to get more oil in the world to make door hinges less squeaky. That’s just a really strong side benefit. What they’re working for is to provide people with an organization that lets them thrive, that is supportive of them, an organization that is focused on us and taking care of each other, no matter what they sell. They just happen to sell WD-40.

How Do You Know If You’re Purpose-Driven?

So how do you know when you actually are one of these purpose-driven organizations? How do you know when employees actually do feel a sense of purpose that inspires them and motivates them every day?

Well, for most leaders, I think there’s actually a simple test that you can give. Do your people have a clear and concise answer to the question:

What are we fighting for?

Even if your leadership has never used “fight” rhetoric before, a question like “what are we fighting for?” cuts through the noise and asks employees to think of a better future the company is working towards, or a potential evil that they’re working against. When you look at the research on what truly drives an individual’s sense of meaning and purpose, you need more than just a product or “innovative” business model.

People don’t want to join a company; they want to join a crusade.

And purpose-driven organizations have made it clear what the crusade is, and what the costs of failure are. So the question to ask when trying to be a purpose-driven company is: Does the mission or purpose or your organization make it clear what better future the company is working for, or what evil the company is working against?

If not, then there’s probably one or more of these misconceptions that you’re still believing.

If you want to learn even more about the importance of purpose and a cause worth fighting for, check out my new audiobook Pick A Fight: How Great Teams Find A Purpose Worth Rallying Around.

Guest contributor David Burkus
Guest contributor David Burkus
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May 28, 2020
Team Engagement