Purpose Drives Performance: Fact or Fiction?

WhartonBC have co-authored this paper in collaboration with Mark Griffin MBE, bringing our unique balance of business, non-profit and sporting experience to draw parallels across the sectors in understanding the correlation between purpose and performance.

Does purpose really drive performance?

With Covid-19 having had an unprecedented impact on individuals and organisations across the globe, for many survival has been the focus. As we begin to embrace the new reality, with countless businesses shutting their doors, rising levels of unemployment and consumer spending at an all-time low, we ask whether business leaders should be rethinking their purpose; why do they exist as a business beyond simply making money?

To begin answering these questions and provide readers with some practical steps to achieve peak performance and deliver meaningful social impact, we are releasing a 3-part series diving into the correlation between purpose and performance.

Purpose as a concept is as old as life itself.

Those searching for an answer to “what is the meaning of life” find the answer in the question- “meaning” itself provides us something to live for, that matters. Despite its longevity as a concept however, purpose has only gained traction in the business world in the last 30 years with material acceleration in application during the last decade. Back in 1994, Jim Collins [1] recognised the 15-fold outperformance to market, of “visionary companies”- that was those focused on ideology & profit. He defined ideology as “core values + purpose”. In the last decade, purpose has been applied most visibly in the branding and marketing space, around the positioning of products and services, as a differentiator for good, and most notably with work from Simon Sinek [2].

Perhaps not despite but because of this uptake and especially application, some are sceptical about purpose. It is seen as soft and fluffy, a nice rather than need to have, a marketing or management fad that will come and go. Others are passionate advocates for the power of purpose. We, the authors – well, we have our own view…

Investigating the link between purpose and performance.

In this series of articles, we explore 3 areas relevant to purpose and performance:

1. The 3 critical components for purpose to drive performance;
2. How to effectively discover and articulate purpose;
3. How to integrate purpose to drive towards peak performance.

So first, before we delve into the 3 critical components for purpose to drive performance, perhaps a couple of definitions and ground rules to set expectations, might be useful:

• Purpose: An understanding and articulation of why we exist and what good we aspire to achieve in the world.
• Peak-performance: “Continuously exceeding organisational best…”[3]

Ground rules:

• We are not marketers, and this is not about the branding of purposeful products and services;
• Our approach looks at the people part of purpose from inside-out;
• We contribute from a diverse perspective gained from working across multiple sectors, including high performance sport, to big finance and small, impactful non-profits. As such, we apply learnings applicable to companies from all sectors and organisations of all sizes

3 critical components for purpose to drive performance: what the business world can learn from non-profits and sports.

In this article we explore how purpose fits within the wider organisational, leveraging the learnings from our unique balance of experience across the business, non-profit and sports sectors. Given the community-centric nature of non-profits and sports, that evoke passion, emotion and a shared experience among diverse groups of people, it is arguably easier to view (and potentially integrate) purpose as part of performance. By identifying the common threads for success across these sectors and overlaying them with those for the business sector we have defined 3 core components that purpose must exhibit in order to positively drive performance. These are;

1. Authenticity
2. Alignment
3. Advancement

We would argue that with all three components in place, purpose can and should absolutely drive performance, and furthermore with any one of these three components absent, purpose will not be able to drive sustained peak performance.

So what do we mean by Authenticity, Alignment and Advancement?

1. An authentic purpose is one that:

• • Is designed, discovered or defined from inside out;
  • Embodies the underlying philosophy of the organisation;
  • Furthers the beliefs upon which the organisation was founded or currently stands by

2. An aligned purpose is one that:

• • Compliments, enriches or replaces the mission statement;
  • Is the glue between organisational vision and values;
  • Resonates with stakeholders (including leaders and employees) because it encourages contribution in furtherance of their own individual purposes

3. An advanced (or advancing) purpose is one that moves things forward by:

• • Generating passion for principles, i.e. how we behave, support each other and hold each other to account;
  • Honing focus on what matters most;
  • Inspiring actions towards making positive impact to our profits*, people and society. * even non-profits need to make a profit in order to sustain or grow their programs, products and services.

What can we learn from the non-profit and sporting sectors?

The non-profit sector benefits from a somewhat natural integration of purpose which drives performance towards the defined social benefits the organisation exists to create. While non-profits may often lack the resources to effectively articulate their purpose from a marketing perspective, it is the purpose-infused in their DNA that is infectious. This is one of the major reasons why we are strong advocates for businesses adopting and integrating non-profits with aligned purpose into their firms to further amplify their delivery of purpose. The mutual benefit is achieved by filling knowledge and resource gaps that otherwise would take much longer to close, increasing employee motivation and knowhow, and amplifying awareness of the shared purpose to more effectively engage clients and donors.

Similarly, but for different reasons, many sports franchises do not necessarily have espoused purpose statements either. However, they all benefit from an unspoken purpose around creating and sustaining an entertaining shared experience, that unites people and, in some way, elevates or improves the sport in which they compete. As such, sports entities – in a slightly different way to non-profits – have similar inside-out, natural, people-centric purposes that are authentic, aligned and advancing.

The business world tends to showcase some of the better definitions of purpose (often in the form of purpose statements) and offers the most examples of effective marketing of purpose. However, it is the business world that has the hardest time infusing purpose throughout their organisations. We will tackle some of the reasons for this in our last article on how to integrate purpose to drive performance, but the short summary would consolidate them into the complexity of the systems within which businesses operate. Indeed, one major survey conducted by PwC found 79% of executives stated their organisations purpose was central to their business success, and yet only 34% had operationalised their purpose [4]. Other surveys conducted by EY and HBR have similar findings. This lack of purpose-integration is perhaps a reason for some of the scepticism that exists around the value of purpose and its connection with performance. However, there is plenty of evidence as we will demonstrate in our last article as to the true value of purpose, when implemented using the TripleA-Purpose Framework.

Let’s delve further into the learnings for the business world by taking each component in turn

1. Authenticity

Non-profits are founded to deliver positive societal impact by solving social problems, so by definition have a purposeful existence. While not all non-profits have the resources to articulate award winning purpose statements, their board, leadership, and employees are all very aware of why their cause exists, why it is important and how it leaves the world in a better place. This drives an emotional connection that ignites energy, enthusiasm and importantly engagement in the cause, which further authenticates the purpose.

One example is Play Rugby USA which was founded in 2004 with a purpose of “Developing Youth through Rugby”. Founded with the aim of using rugby as a vehicle for young people to discover and develop opportunities and life skills, this continues to be the motivator for all stakeholders to get involved. As a result, Play Rugby USA has been able to establish a broad community of supporters from successful rugby alumni, schools, community organisations, corporations, city and state that has enabled rugby to become a mainstream sport in New York City schools and a proven vehicle for young people to graduate, enrol in college and realise their potential.

In sports, what you see is what you get. The shared experience in the organisation is driven by the team’s performance on the field and is thus critical to them achieving and demonstrating their purpose. Performance itself is real-time and highly visible, providing immediate feedback not only to the athletes but owners, sponsors and fans. Mistakes are seen by everyone and are addressed by management or the individual performer immediately after the competition via media interviews and then immediately becoming a learning point for improvement ahead of the next competition. The same can be said for successes and highlights.

Continuing with our theme, the USA Rugby’s Women’s National Sevens Team provide an exceptional example of purpose-inspired performance. At the end of the 2019 Rugby HSBC World Services Series, the team ranked #2 behind New Zealand. Part of the team’s success had been achieved through their purpose-driven culture, with a purpose “to leave a legacy”. Interestingly they used Peter Stople’s definition; “Legacy is not leaving something for people. It’s leaving something in people.” This purpose was embellished further for the team, with a clear mission and cultural pillars to guide the teams individual and collective behaviours and performance.

So how can leaders ensure their individual and organisational purpose is authentic? We urge them to consider the following questions:

• What positive impact can we leave on the world?
• Who can we engage (internally and externally) to build awareness, excitement and engagement around our purpose?
• What metrics can we create to evaluate our performance, in relation to our purpose?

2. Alignment

Non-profits are designed specifically to achieve and measure defined social benefits. The best non-profits have intentional program designs and accompanying cultural frameworks that work backwards from the impact they aspire to achieve. They map backwards through medium and short term outcomes, to outputs that are aligned with their activities (frequency, intensity, duration), resources (people, tech, funds) and processes. In many respects, alignment in non-profits is a simpler and thus more effective exercise. It is often the resource acquisition that is the bottleneck to driving performance.

Row New York is one of many great examples of a non-profit with a purpose that is aligned and clearly focused throughout the organisation. The purpose is “Pulling together to push ahead” – which is easy to envision and a critical component of success in a boat. More broadly, by pulling together in the boat, in the classroom and as a community, Row New York helps all rowers push ahead. Similarly to Play Rugby USA, Row NY has a focused mission to achieve this with a program model that promotes clearly articulated values and behaviours on and off the water along with rigorous academic support. The results in terms of high school graduation and college enrolment, are among the most impressive in the sector.

The best sports organisations are driven by an aligned community of stakeholders who all share the same objectives. These objectives may be short term for a big competition, medium term for a season or long term towards multi-year periodization goals. All stakeholders contribute to and benefit from successful performances, real-time. Sponsors provide financial and other resource support and receive more visibility and increased affinity. Fans contribute time, energy and revenue and in return receive awesome experiences and a sense of community. Owners contribute their wealth and expertise and in return receive increased rights fees, gate receipts and merchandise revenue, as they increase the value of their franchise. The combination of the shared objectives with real-time feedback, enables clear alignment and adaption in the delivery of the purpose-driven performance.

The Oakland Roots are a new franchise (2018) with an inspirational purpose. They are one of a few stand-out examples of sports franchises that have clearly defined and led with purpose, rather than organically adopting and aligning stakeholders around the unwritten purpose of inspirational moments and shared experiences. Rather, the Oakland Roots boldly state:

“Oakland Roots Sports Club seeks to harness the magic of Oakland and the beautiful game of soccer as a force for social good……This is about Oakland first, always.” To me, if I lived in Oakland, I’d want to watch this team, be part of the community, part of the experience, share in the ups and downs, support the team to be successful because they represent me, my family, my community, my city. So, while many sports franchises already have this intrinsic alignment (and need) to engage with their communities around shared experience, those such as Oakland Roots who are in a position to better define, articulate and promote this purpose, have the best opportunity to advance forward their teams and communities, together, for good.

So how can leaders ensure their individual and organisational purpose are aligned? We urge them to consider the following questions:

• How can we (re)-design our processes, products, practices & positioning to deliver our desired impact?
• To what extent do our values and principles bring our purpose to life?
• What real-time feedback mechanisms (formal or informal) can we identify, encourage, and integrate that celebrate the delivery of purpose?

3. Advancement

Non-profits focus on what matters most to move their cause towards achieving long term impact in society. The best non-profits infuse their principles in everything they do, from how they run their programs and services, how they engage their beneficiaries, how they communicate with benefactors and board members. They are contributors to, not takers from society which encourages diverse groups of like-minded stakeholders to contribute back (time, talent, treasure). Contributors are recognised with sincere gratitude for their shared passion for the organisation’s purpose, which continuously refuels the contribution cycle. In the best non-profits, this results in an unwavering and escalating commitment to the cause.

A great example of a non-profit with a narrow focus and broad impact, is GoodSports. GoodSports keep children on the playing field to enjoy the lifelong benefits of play, by donating new equipment to those most in need. This simple model enables GoodSports to partner with athletes, equipment manufacturers and sports brands to donate equipment, while engaging individual and corporate donors to scale their reach and impact. As a result of a singular focus to this efficient program design and simple purpose, GoodSports has been able to benefit over 7million children since 2003.

Sports organisations have one major and unique advantage over every other sector: that is the ability for their teams (the primary barometer for their success) to practice. As we’ll explore in our last article about how to implement purpose-driven performance, practice is one of five critical components along with people, process, products and positioning. The beauty of practice is it helps us improve the integration and alignment of each of the 5 Ps internally, before testing them out externally. We can evaluate our performance in relation to our principles, our areas of focus and our results, ultimately being able to ask “what would have been the impact of this on performance?”. In business, practice is more of a luxury which often requires failing and improving on-the-job (hence the rise in agile approaches). So, one of the takeaways for business in integrating purpose is building in practices to test, evaluate and feedback on advancement of actions in alignment with purpose.

Rather than pick a single franchise to demonstrate advancement, instead we could highlight how multiple athletes, franchises and leagues in the USA and around the world have recently been in a position to authentically advance the Black Lives Matter movement in a way that has aligned their athletes and communities to something bigger than themselves. Perhaps the NBA and MLB are the most notable here, having provided their considerable platforms to embrace and promote the movement. As Nelson Mandela famously said: “Sport has the power to change the world. It has the power to inspire. It has the power to unite people in a way that little else does.” The sports stakeholders all share one thing in common – an alignment to the same dream for their team to be the champions and to experience the journey together, along the way. Now, perhaps more than ever, sports teams have an opportunity to represent a bigger purpose, uniting and inspiring their fans along the way.

So how can leaders ensure their individual and organisational purpose is advancing? We urge them to consider the following questions:

• How can we most effectively recognise and replicate our stakeholders’ contributions to our purpose?
• What existing practices can we improve to better align with purpose?
• What practices can we establish that enable us to improve the contributions made by our people, processes, products and positioning towards the delivery of purpose?

In conclusion, despite the obvious challenges in the social and economic environment, it is an exciting time to be in the business of purpose. In our opinion, the key learnings for businesses from the non-profit and sports sectors around purpose are as follows:

In the best Sports and Non-Profit Organisations, purpose is –

1. Organic, evolving from inside-out;
2. People driven;
3. Grounded in and elevated by, shared experience.

Further, the critical components for any organisation effectively integrating purpose to drive performance, require purpose to be:

1. Authentic;
2. Aligned;
3. Advancing.

With these learnings and components in mind, businesses have a huge opportunity to embrace and integrate purpose-driven performance as a core strategic objective. Furthermore, businesses have the resources (talent, money, technology) to invest in articulating, collaborating and transforming their organisations through purpose.

In our next article we look at how organisations can effectively discover and articulate their purpose, as the next step in bringing their purpose to life.

If you would like more information in how we can support you to define and embed a purpose that is authentic, aligned and advancing, please contact Liz Hirst or Mark Griffin.

Article 3 will be released over the coming weeks.

References:

[1] Built to Last, Collins & Porras 1994

[2] Start with Why, Simon Sinek, TED Talk 2009

[3] Peak Performance, Gilson, Pratt, Roberts, Weymes

[4] Putting Purpose to Work: A study of purpose in the workplace (June 2016)