Strong Organizational Purpose | Best Case Studies

In today's rapidly evolving business landscape, the significance of having a clear and compelling organizational purpose has never been more critical. An organizational purpose acts as the north star, guiding a company's strategies, decisions, and actions towards a common goal that transcends mere profit-making. It serves as a foundational element that not only inspires and unites employees across all levels but also resonates with customers, suppliers, and the wider community. This alignment around a meaningful purpose fosters a strong corporate culture, enhances brand reputation, and drives sustainable growth. As organizations navigate the complexities of the modern world, establishing a purpose that articulates why they exist and the value they strive to create is essential for long-term success and relevance.

What is the Aim of Organizing Around Purpose?

Organizing Around Purpose is a critical organizing principle. The remaining three principles, choice, change, and context, are important, but they are a means to an end. They better allow people to organize for the reason that matters. All organizations are created for a reason: to accomplish goals that we, as individuals, cannot accomplish by ourselves. Few things are more motivating than collaborating to achieve something we believe in. To be part of something bigger, something that matters. All organizations were created for these reasons. All organizations were created for a purpose. When organizations are functioning well, they instill in their members their purpose, a purpose that motivates these members to work together to achieve it. Vital purpose gives us a sense of belonging, a community to engage with, and a chance to create together. Organizations with a vital purpose perform better than weak or poorly understood ones. Solid purpose, motivation, autonomy, self-organization, etc. all become a matter of course. When people can contribute to purpose, the need for expensive and crippling bureaucracy slips away; people use values, not rules to guide their decisions.

Why Do Most Organizations Seem Bereft of Purpose?

Yet, these simple truths are lost in most of our larger organizations today. When asked, most employees need help understanding or explaining the purpose of the organization they belong to. Even where purpose is understood, most employees need to be equipped or empowered to contribute meaningfully. A wall of bureaucracy and an organizational labyrinth make Navigating how one's work contributes to any meaningful outcome impossible. The corporate purpose is often uninspiring and uninteresting, providing little cause for people to rally around. Your average employee is more likely to approach their everyday work life like a zombie, shuffling from one task to the next, than with a sense of passion or purpose. Many organizations belatedly respond by crafting lofty-sounding mission statements. Statements do not resemble how the organization interacts with its employees and customers. We can now add a healthy sense of cynicism to our organizational experience. Frederic Laloux, in his book "Reinventing Organizations," talks about the evolution of organizations that strive to place purpose at the center of everything they do. Frederic states that purpose-driven organizations are essential not only to combat the suffering and disillusionment caused by the traditional command and control hierarchical structures of today's organizations but also to overcome the daunting problems of our times. According to Frederic, purposeful organizations are far more likely to heal our relationship with the world and the damage traditional organizations have caused. Frederick even states that the very fate of the human race may rest on our ability to evolve organizations to ones grounded in strong purpose. Laloux, Frederic. Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness. Nelson Parker. Kindle Edition.

How to Get Started Towards Stronger Organizational Purpose

There are many great examples of organizations with a strong purpose. If your company isn’t yet one of them, there’s no better time than now to begin.  An organization without purpose likely impacts people's motivation and ability to self-organize around doing the right thing for the organization and its customers. So, start the conversation at whatever level you are in the organization! Ask questions! How can we elevate our organization's purpose? How can we better instill purpose into our values, corresponding choices, and actions? Where can we find examples where people are staying true to purpose? What are examples of when we behave counter to our purpose? Where, when and why? The good news is you can get the ball rolling and better organize around purpose regardless of your level, role, or position. The key to improved organizational purpose is to facilitate change in your sphere of influence, whether a single team, a department, a line of business, the executive group, or the entire organization. The other key is to approach improving organizational purpose incrementally; you can only move to the ideal state if such a thing exists in one go. A strong organizational purpose makes its members feel like they are answering a higher calling. It guides people's behaviour and serves as a rallying point in times of crisis. A strong purpose is a filter through which we can make decisions and a moral compass that shapes organizational values. Strong organizational purpose can be evaluated by asking -the following question: Is your organization's purpose meaningful and authentic enough for people to rally together to create value with maximum autonomy? We can say we are Organizing for a Strong Purpose when our purpose has the following qualities:

1. Meaningful

A purpose that inspires people to bring their best, one that motivates people to act beyond the self, a purpose that can adapt and survive across times of prosperity and crisis

2. Authentic

A purpose that is reflected in the values, beliefs, actions, choices and decisions made by everyone at all levels of the organization, especially that of leadership

3. Autonomy

A purpose that instills confidence to move away from antiquated bureaucracy, decentralize our control structures and allow people to self-organize and engage intimately with the market.

Hierarchy of Organizational Purpose

A reasonable metaphor, albeit an imperfect one, is to think of Organizational Purposes like Maslow's famous hierarchy of needs. It can be a lot harder to think about a higher purpose when organizations are struggling to simply survive. However, it is fair to state that organizations that attend to a higher purpose look at survival as an afterthought. As mentioned, it is not a perfect metaphor but a good visual to describe the increasing strength of purpose.

What Is the Profit of Organizational Purpose?

When asked what the purpose of their organization is, many leaders will answer simply "to maximize profit," even if subconsciously. This is perhaps the poorest form of organizational purpose. When profit is the sole motive, we get cynical and even craven decision-making. Joost Minnaar and Pim de Moree discuss the limitations of profit as a purpose in their inspirational book, Corporate Rebels. According to Corporate Rebels, when work is just about making money, then morbid, short-term thinking is the result. We get management that makes short-term decisions, Decisions that may bring a swift return on investment but are often at the expense of sustainable value over time. Moreover, the decisions that result in poor user experience and decisions that frustrate and anger people working on the front line. The result is decisions that are not good for the world and demotivating for everyone involved. Likely, at least some of you are rolling your eyes. How can profit not be the ultimate purpose of an Organization? How can an organization survive without profit? The obvious answer is an organization can't. Even public organizations require funds that can be reinvested back into the service they provide. Profit is important; it is critical, in fact, to organizational existence. But profit for an organizational purpose is like food and water to a human. We can't survive if we don't eat, but most of us would agree that we humans have all answered to a higher calling than the consumption of food for at least a couple of centuries. Likewise, most organizations don't survive without profit, but profit is fuel for purpose. Organizations that look at profit as a means to achieving purpose outperform organizations that accomplish outcomes solely to achieve profit. A popular saying in the Lean / Agile community is if you make money in order to run your business, you will make money, but running a business to make money won't keep you in business. There is plenty of research that profit is a poor motivator as well, with a recent paper in The Journal of Business Ethics, one that is backed by numerous studies, showing that the motivation of employees improved between 17 to 33 percent when profit is not the primary objective of the organization. We can say similar things about other critical levers of most businesses: growth, market share, competition, etc. All of these are necessary to run a large organization, but none of these are sufficient for an organization and the people in it to excel.

How to Make a More Meaningful Purpose?

Yet, an organization guided solely by market purpose can fall short in several ways. This is especially true in times of volatility and uncertainty. When a higher purpose guides an organization, people are able to act more effectively when faced with crisis or conflict. An easy improvement on the classic market-oriented mission statement is to restate the purpose of the value it brings to the community at large that the organization interacts with. For instance:

• Give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family - Facebook
• Gives everyone the power to create and share ideas and information instantly without barriers. Our business and revenue will always follow that mission in ways that improve – and do not detract from – a free and global conversation. - Twitter

The organizational purpose of Facebook and Twitter is more compelling because they emphasize the impact and power they provide to their customers. They are less focused on the products and services they create. An emphasis on community and a focus on customer empowerment can act as a much stronger rallying cry in the face of adversity and extreme volatility. Goods and services can easily lose relevance in a time of crisis, and leaders can easily make the wrong decisions for their employees and customers when market success is the sole guiding compass. Having people who believe in the organizational mission can serve as a rallying point in the face of extreme volatility. A meaningful purpose can have a profound impact on the willingness of people at all levels of the organization to engage in the difficult discussions required to stay on course.

Notable Purpose-Driven Organization Examples

We have covered the difference between having a weak or strong purpose, and how a strong organizing purpose transcends profit, revenue, and growth. Strong purpose is solely about the market or market outcome, and those are all a means to an end. Organizations are created to change the world, and organizations will base their decisions, actions, and choices on world-changing purposes. In this part, we'll come up with examples of Organizations that are guided by world-changing purposes. It would be fair to say that only a minority of large organizations use a higher, world-changing purpose as a moral compass that guides the actions of its people. But there are plenty of amazing examples where they do, and these examples are extremely compelling. In fact, there are a million creative artists thriving all around us.

1. Patagonia

Patagonia is one such compelling example. Its mission statement is ‘We’re in business to save our home planet.’ Whether donating the proceeds of  Black Friday sales (millions of dollars) to the environment or creating their new office space by restoring condemned buildings using recycled materials, it is clear that still, everyone's actions are infused with their purpose. It is an attitude that inspires actions on all levels of the organization. It was initially formed by its founder, Yvon Chouinard, who loves rock climbing and has a world-changing purpose. Starting with climbing pitons, he then slowly diversified the product line and grew his business to the worldwide brand it is today. Despite growing into a world-class entity, Yvon strives to keep his organization's results true to its purpose. Still an avid climber, Yvon became disgusted with the rock degradation he witnessed during an ascent of El Capitan. It was apparent, during his climb, that the rock faces he frequented were being disfigured at an accelerating pace, and they were being disfigured by the very pitons he started his business with and continued to sell. The response was the rapid design and market deployment of an alternative that would leave rocks unaltered: aluminum chocks that could be wedge by hand. Within a few years, the Piton business was done. The upside for Patagonia? They sold like hotcakes; people bought them faster than Patagonia could make them.An interesting attribute of purpose-driven businesses is that they often make decisions that appear risky, that are counter to common profit-making sense, and that are not good for the business's bottom line. Purpose-driven organizations take action based on accomplishing purpose-driven outcomes. One would assume that this would lead to poor organizational performance and poor financial results. Yet, this is often not the case. It seems frequently the following purpose leads to better financial results.This has often been the case for Patagonia and other organizations like it. There are numerous more examples where Patagonia's purpose-driven decision-making has resulted in them both improving the environment and getting great financial results. When Patagonia decided to ditch heavy polluting plastic packaging for their thermal underwear, they reduced garbage by 12 tons a year and benefited from a $150,000 in reduced cost. Sales also went up the first year by 25%, as customers could feel the material and appreciate the quality. Also, the underwear had to look more like regular clothing since it was out on display, which had the interesting side effect of people wearing it like regular clothing, which further helped sales.

2. Buurtzorg

Established 13 years ago, is a Dutch home care organization that has pioneered a nurse-led, holistic care model that revolutionized community care in the Netherlands. When we think of what it means for an organization to be made of a network of self-organizing agile teams whose people are accountable and empowered to achieve organizational purpose. We think of Buurtzorg before many of the typical tech product companies we hear about so often. During the 90s, the neighborhood-based, a facet of Dutch life since the 19th century, went through a series of consolidations and mergers. Nursing went from individual providers to smaller organizations to larger enterprises. The classical factory efficiency mindset followed suit. Finishing tasks quickly, seeing more patients a day, maximum time allowances, you get the idea. The result, as we are sure you can guess, was a very poor patient experience, frustrated nurses, and lowered medical outcomes. When patients and providers are treated like machines, the human connection is lost, and people suffer. Nurses felt degraded, and patients, often elderly, were confused as to what they were taking and why; everyone was in a rush, which created mistakes, which kept everyone in a rush.Jos de Block, a manager within a large nursing organization with ten years of experience as a nurse, had had enough. He and a group of like-minded nurses decided to form their own organization. One that would employ an entirely different paradigm based on purpose-driven, self-managed teams. Jos formed the company not only out of a sense of frustration with the way neighbourhood nursing companies had devolved into mechanical factory-like entitlements but also to help nurses achieve a higher purpose than simply providing medication to patients. Their purpose would be to "help people have rich, meaningful, and autonomous lives, to whatever degree is possible."This shift towards purpose has had some compelling effects. Nurses became empowered to establish deeper relationships with their patients. They took the time to understand each individual patient and what their needs for healthy living were. They go to know who could be a part of their support network and what else they need to attain wholeness. In one case, a nurse noticed a very proud older patient was not seeing visitors. The patient was embarrassed about her sickly appearance. The solution was to arrange a home visit from a hairdresser. This type of deep understanding and problem-solving was not possible in the old regime of bureaucracy and management by numbers.This focus on deep nurse-to-patient engagement led to another interesting outcome: greater patient autonomy. Again, Buurtzorg's goal isn't to provide more medical treatment. It's to help patients recover the ability to take care of themselves as much as humanly possible. This goal Is about making themselves redundant, not growing endlessly. When decisions are made toward this purpose, they often appear to fly in the face of organizational growth or efficiency. The results? Patients who are thrilled with their nurses.Nurses who work with a sense of meaning. A nice consequence is that the growth of Buurtzorg has been staggering. That original team of 10 nurses? They are now a network of teams that number more than 10,000 across 25 countries. Nursing costs per patient are down 40%. Patient outcomes are dramatically improved.But Jos doesn't stop there; to achieve his mission, he teaches his competitors how to organize forward to a purpose-driven, empowered, and trusted model, and Jos isn't charged to do it. He wrote a book explaining Buurtzorg’s method, and he sent a copy to all his competitors. Jos does these things because the purpose of his organization is to help patients live a more healthy, autonomous and meaningful life.Furthermore, Buurtzorg and Patagonia are just two examples of Purpose-driven Organizations, but they are great ones. When an organization makes decisions based on its strong purpose, it is hard to think that the outcome would be anything other than sustainable growth for that organization. But when an organization's decision-making is not grounded in a strong purpose, what is the driving factor? What are decisions based on? What grounds organizational behaviour?

Strong Organizational Purpose and the Best Alternative

When all members of the organization make thoughtful Decisions based on a strong organizational purpose, it is hard to think of any outcome other than sustainable growth and profit. The counter to this is that plenty of examples grow profitably in the absence of purpose. But it does so at the expense of its workers, suppliers, users, environment, or other market participants. We will quote Jonas Altman in saying that an organization "growing bigger for its own sake is a disease," one that is driven by ego and, most fundamentally, survival. So, are you growing with purpose or growing like a disease? Frederic Laloux, in his book Reinventing Organisations, puts forward this idea that individual ego is in the driver's seat of decision-making in purposeless organizations. Many organizations have mission statements that are all about winning, about market share, about being the best. This type of purpose may appeal to the vanity of owners and executives. Yet, if I am being honest, such mission statements ring hollow to the rest of us. Most employees, including the CEO, can barely recite such mission statements, much less act on them with real conviction. The dark side of ego-driven organizations focused on domination is that everyone is paying attention to the most craven outcomes: survival and self-preservation. Self-preservation of the individual and (potentially) self-preservation of the organization. The world is a dangerous place where winning and ego dominate decision-making. We get a posture of scarcity and survival that plays out in stable organizations the same way they do for organizations that are actually struggling to survive.Competition is the norm of the day. If there isn't sufficient market competition, according to Frederick, people will start competing internally at the personal level instead. This is a world where everything is a competition. Someone is always losing, and if you are not careful, someone will supplant you from your job, someone else will win the market, and someone else will take your power. This toxic brew that we have seen impairs the decision-making of people capable of excellent leadership and decision-making across all levels of the organization. Organizing around a strong purpose is a solid first step to moving away from this fixation with survival. Next, we need to employ new organizing practices (which we will cover) that shift our operating DNA to empower people within the organization to have the autonomy they need to meaningfully contribute to their organization's purpose. This practice will impact how we form a strategy, how we plan, how we come together to create value, how we learn from both success and failure and plan, how we form into the team, how we engage with our users, and how we measure success. Paradoxically, the shift to organizing around purpose results in the need for less management, but it will require exponentially more leadership. Growing and evaluating a self-organization system is intensely more difficult, at least at first, than operating under the status quo of traditional management. But it is the difference between a living organization that can respond to a changing world and the struggle of a zombie institution, facing a slow or abrupt death as its organization members lose confidence in its ability to adapt to serve a better world.

Conclusion

Many talk about ‘purpose,’ but making it real takes hard work and dedication. In fact, this article showed different levels of purpose, like companies focused on making money first or helping others. The ones truly thriving are led by a cause bigger than themselves, one that matters to the world. Moreover, just having a fancy statement isn't enough. Actually, purpose needs to be lived, guiding everything your company does. Think Patagonia or Buurtzorg, where employees feel empowered and things get better all around. Therefore, the choice is yours: focus on yourself and risk stagnation, or embrace purpose and create a brighter future for everyone. So, don't just talk about purpose, make it your company's heart and soul. It's your legacy.