While it is obvious that every business strives to make profits to survive, we find that more and more companies nowadays are also putting more focus on their purpose to succeed. In fact, it is now common to come across organizations disclosing not only their mission statement but also their purpose statement. But is there actually a difference between a mission and purpose? Or, why is there even a need to define the company’s purpose if there is already a mission statement? For small and medium-sized companies, is it really necessary to define a purpose statement?
Mission versus purpose
Despite the increasing focus on the purpose statement, many confuse it with the mission statement. Considering the importance of defining business purpose in driving business success and building brand value, it is critical for business leaders and stakeholders to have a firm grasp of the difference between mission and purpose statements.
Shannon Schuyler, the chief purpose officer of PwC, noted in an interview, “Your mission statement is more about what you want to accomplish, and the goals you want to get to, whereas your purpose statement is your reason for existence and more about the journey.”
Mission statement is more about the now – what the company wants to achieve – while the purpose statement is more about the long-term goals – why the company exists.
Business leaders must realize that the importance of purpose extends beyond the commercial benefits. In Putting Purpose to Work, a study of purpose in the workplace released by PwC this June, it was highlighted that business leaders should know that employees see purpose as a way to bring meaning to their work and understand the contributions they are making to the company. With the ever-increasing demand for highly skilled labor and the even greater challenge of keeping the right talent, the study challenges business leaders to approach purpose more holistically, to optimize value for employees, shareholders and other stakeholders.
According to the study, fundamentally, a truly purpose-driven company must have purpose as its guidepost for decision making – including the opportunities it decides to pursue and not pursue. Therefore, companies must put purpose to work by intentionally embedding it in three main aspects of the organization: leadership and management practices, communications and talent strategies.
Leadership and management practices
Business leaders should make sure that their decisions are systematically aligned with the business purpose. After all, if purpose is really the reason for the company’s existence, it only makes sense for strategic decisions to be evaluated against and aligned with the company’s purpose. Business leaders must “walk-the-talk” for employees to really appreciate the purpose and what it means for them and their work.
Quite interestingly, however, the study revealed that there is a disconnect between how important purpose is claimed to be for business, with 79 percent of business leaders surveyed believing that purpose is central to business success, and how central their purpose actually is to business decisions, with only 34 percent of the same business leaders surveyed agreeing that purpose is a guidepost for leadership decision-making. Clearly, there is still a lot of room for development for business leaders to make purpose more accessible to the employees by communicating and instilling such in the organizational discipline and culture.
According to the study, purpose is best cultivated and communicated in a personal, humanized fashion. Furthermore, employees mostly favor hearing about the impact of their company’s products and services through client and customer stories, employee stories and leadership messages. Considering these, business leaders must find a way to provide a chance for employees to personally engage with purpose as employees are at the heart of carrying a purposeful business. For example, business leaders could talk more about human interest stories so that employees can more personally identify with the impact of their company’s products and see the difference their own work make in society.
Ultimately, purpose should be incorporated in the company’s talent strategy, from hiring, development to rewards setting. Companies should focus on appealing to and getting individuals who will elevate the purpose by being engaged and dedicated to it. On the other hand, development programs should not only focus on skills building but also on developing behaviors and values that reinforce the company’s purpose. Consequently, employees must likewise be held accountable and rewarded for demonstrating behaviors and values that are aligned with the company’s purpose.
Purpose as a way of business
Opportunities and challenges abound in today’s highly competitive and complex business environment. In an era where business of every size and scale is expected not only to deliver profits but also to make a difference in the lives of its employees and to contribute to society, the importance of cultivating the power of purpose cannot be overemphasized. Purpose has become a way of business. So,business leaders must be at the forefront in driving the purpose-driven organization to success.
Catherine H. Santos is a partner from Assurance and the Assurance Transformation Leader of Isla Lipana & Co./PwC Philippines. Email your comments and questions to email@example.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
CATHERINE H. SANTOS