Purpose-driven organisations: what does it really mean and what do they need to succeed?

By Arabella Chichester – Global Head, Non-Profits and Social Impact, Perrett Laver

The last year has been one in which altruism has been top of the agenda for businesses, charities, non-profits and consumers alike. With the pandemic raging on, we have all been forced to put a sense of social purpose above our own objectives and sacrifice certain things for the greater good.

This focus on social impact has placed purpose at the heart of all organisations’ agenda. Organisations have rallied round the public, and leaders around the world have embraced a sense of collective mission as they fought against the pandemic.

But while the role of the purpose-driven leaders has come to the fore over the past year, organisations have long looked for leaders that steer organisations towards some goal that sits outside growth and financial objectives; towards a sense of social purpose that will benefit more than just their beneficiaries and shareholders.

At Perrett Laver, we recruit leaders for organisations with purpose at their core. And whether they are non-profits, charities, research organisations or universities, we look for leaders that reflect that same sense of purpose in their personal attributes and qualities.

What do we mean by ‘purpose-driven’ organisations?

To their employees, customers and shareholders, nearly every business in the world will now declare themselves a ‘purpose-driven’ organisation. But sadly, this label is appropriated as a marketing tool  and those that claim it often ignore the integral ingredient of a truly purpose-driven organisation: outcomes.

Outcomes are the key barometer to judge truly successful purpose-driven organisations, so we ensure that our clients deliver tangible social good rather than just commercial gain.

Effective and impactful leaders are at the heart of setting the agenda and delivering successful outcomes for purpose-driven organisations, so what are they key traits that they need to succeed?

1. Communication

Successful purpose-driven organisations require the buy-in of all employees and a collaborative effort from every level of the business. We ensure the leaders that we recruit are exceptional communicators that can galvanise support from across their own organisation to ensure that everyone is pulling in the same direction.

Communicating clear purpose instils a sense of belonging and identity among employees and also drives employee satisfaction and productivity. According to research from Imperative and Linkedin, 73% of purpose-oriented people are satisfied in their jobs, while Deloitte has highlighted that purpose-driven organisations have 40% higher levels of retention.

There are therefore huge benefits for leaders that communicate a vision for the organisation and set colleagues on the path to achieving it.

2. Values

While communication as a standalone skill is important, it is meaningless without a firm grounding in values. We ensure that leaders’ values reflect those of an organisation and its employees entirely, and this dictates our recruitment and search process perhaps more than any other area.

The most suitable candidates to lead purpose-driven organisations can often therefore come from unexpected areas. We recruit leaders from entirely commercial organisations to lead charities and universities, for example, because their values reflect those of an organisation so closely.

Values-based leadership ultimately ensures that purpose-driven organisations do not deviate from their objectives and deliver successful outcomes.

3. Diversity

It is essential that leaders embrace diverse leadership and teams and place this at the heart of an organisation. Diversity is now proven to play a crucial role in both an organisation’s performance and employee satisfaction.

McKinsey found that companies in the top-quartile for ethnic diversity on executive teams performed 35% better than those in the bottom quartile, while teams in the top quartile for gender diversity performed 15% better than those in the bottom quartile.

In addition to this, diverse executive teams are 27% more likely to have superior value creation.

With diversity at the centre of our wider social conversation, it is essential that purpose driven leaders are championing diversity and ensuring their own teams reflect this. That is why when we recruit leaders, we ensure that diversity is at the top of the agenda.

4. Collaboration

Communication cannot go one way in an organisation, and purpose-driven leaders must be willing to listen and collaborate with those around them.

One of the key traits of purpose driven leaders is therefore being able to hear the concerns and desires of their colleagues around them and channel these into the collective vision of the organisation.

And this will translate to overall performance – Imperative and Linkedin’s research found that purpose-oriented employees that are invested in wider purpose of the business are 30% more likely to be high performers than those who work for just a pay cheque.

5. Practicality

It is easy for an organisations’ purpose to fall into the meaningless middle-ground of marketing straplines. To deliver effectively and ensure they gain the associated benefits of purpose-driven workforce, leaders need to set out a clear and achievable purpose and lay out realistic steps to achieve it.

Progress and the tangible sense of moving towards an organisation’s purpose will ensure that employees remain engaged with the overall strategy and vision for the organisation.

Purpose has become more than just a watchword

As we emerge from the pandemic this year, purpose will become more essential than ever.

The economic recovery will require the collaborative effort of all organisations and the public, and purpose-driven leaders will be at the heart of driving wider social good.