Organizational purpose matters because it
- Provides a guiding light for all activities and strategies
- And It drives employee engagement
Rudderless Organizations DO Exist, and It’s More Common Than You Think
A few years ago, Harvard Business Review published a report titled, The Business Case for Purpose. While on the surface one wouldn’t think the topic would warrant an HBR research study, this effort uncovered some astonishing data.
Less than half the global executives surveyed (46%) said their companies had a strong sense of purpose. And only 38% of executives said their staffs had a clear understanding of the organization’s mission and a commitment to the company’s core values.
It’s bad enough that employees might be clueless about the mission of their organizations. But for the majority of executives surveyed to admit that their companies don’t have a strong purpose leaves one to scratch their heading wondering how does anyone know what to do, or when they succeed?
The problem, according to the authors, is that the business environment is now in a permanent state of disruption, leaving many organizations drifting randomly like a ship with no rudder.
A Strong Purpose Anchors Companies
Although the majority of executives had a dim assessment of their companies’ purpose, over 80% agreed that purpose-driven firms deliver higher quality products and services and enjoy greater customer loyalty and higher employee satisfaction.
Respondents also agreed that purpose-driven organizations fare better in a disruptive business climate by more easily weathering organizational transformations.
I’d argue the answer lies in the link between organizational purpose (what we call “mission”) and employee engagement.
Purpose-Driven Companies Also Drive Employee Engagement
Pride in organization is one of the top three drivers of employee engagement (Link to DC blog, Every Manager’s Guide to the Fundamentals of Employee Engagement). We measure it in terms of brand and reputation, mission and goals, culture, and core values.
Every CEO knows that mission, in and of itself, doesn’t lead to outstanding performance. But employee engagement does. And the difference between fully engaged employees and all others on the question of organizational mission and core values is amazing.
Research we conducted in September 2018 shows that an impressive 83% of fully engaged employees strongly believe in their organization’s mission and goals—compared to 42% of partially engaged employees and 19% of actively disengaged employees. That’s almost twice as many fully engaged employees aligned with the organization’s mission as partially engaged employees … and four times as many fully engaged as actively disengaged employees.
In addition, 88% of fully engaged employees say they understand how the work they do fits with the organization’s overall mission. On core values, 78% of fully engaged employees strongly agree that their values are aligned with the values of their organization while only 13% of actively disengaged employees feel similarly. That’s a spread of a whopping 65 points.
Is not having an articulated and understood purpose negatively impacting your employee engagement levels?
A Company’s Mission Boosts Business Performance
Does purpose matter? Absolutely. But don’t lose sight of how it matters.
Mission can’t stand as just one more corporate communications initiative. It needs to be part and parcel of an overall organizational vision that’s grounded in a culture of employee engagement. Pride in organization, trust in leadership, and connectedness with immediate managers work together to impact employee engagement.
According to Gallup, organizations with fully engaged employees achieve earnings per share growth four times higher than their competitors. They also enjoy:
- Increased productivity
- Higher profitability
- Better employee retention, and
- Better health outcomes…among other benefits.
Consider how to better articulate your company’s purpose and mission. Codify it and ensure it becomes part of the language and dialog throughout the company. Top leaders must reinforce the message and most of all ensure that everyone in the organization understands how their job relates to the mission. Employees need to know that what they do makes a difference, but that’s a topic for another blog.