Purpose driven companies deliberately make a difference in their communities and maybe even the world. That is a pretty big stake to put in the ground! A number of studies have shown that purpose driven companies perform well in the market. In The Type of Purpose That Makes Companies More Profitable, we are given more actionable data. Not all measures of purpose are correlated with financial performance. In particular, it is not enough to have “Purpose-Camaraderie” (we are all in this together). Superior stock performance correlates with organizations that have “Purpose-Clarity” (management communicates and acts upon a clear vision about the organization’s purpose). Data shows that declarations from top leadership are not enough, mid- level managers and professionals must be engaged so that daily decisions and actions are aligned. Rich Johnson and Ryan Jeffery, co-founders of Ignite, got it right by defining a purpose driven leader as someone who 1) has a vision for impact (aligning an organization and people around purpose) , and 2) a commitment to a people-first culture. Ignite’s leadership programs are designed on that basis.
Being purpose driven is not binary – it’s not a yes/no status. It is a chosen path and some organizations are closer or further down the road. There are some definite on ramps to this path. Most on ramps are taken by leaders of companies who are asking what they want to be known for or what legacy they want to leave. Leaders of a start-up are prime for reflecting on their purpose and strategizing their impact. Other ripe organizations may include a family owned business that is passing ownership to the next generation. Does the next generation want to change their impact? Or when two companies merge and the collateral damage of clashing cultures leave employees and customers questioning whether to stay. In fact, any major organizational shift, whether it occurs from product or market changes, organizational restructure, or leadership changes will lead to a cultural shift. Purpose driven leaders take the opportunity to create or maintain a purpose driven culture in the midst of this shift.
With growing research that concludes the best talent will gravitate to purpose driven companies and those same companies will outperform in the market, more leaders are asking what do we want to be known for and what will be our impact?