We are used to hearing that company purpose is important. More significantly, over eighty percent of executives now recognise that companies treating their purpose as a core driver of strategy and decision-making outperform their peers by a considerable margin, in terms of growth, productivity, and ability to transform. But why, you might ask, do ‘normal’ companies not treat their purpose as a driver of strategy and decision-making? There is an elephant in the room.
At board level, purpose is widely treated as a euphemism: the literal purpose of the company – its point of value creation – is taken as read and not on the agenda. ‘Purpose’ is instead exploited in name only to lend virtuous connotations to side initiatives that do not affect the strategy – including sustainability, corporate social responsibility, employee engagement, leadership style, and marketing. Failure to question the actual purpose of the company deprives the organisation of strategic clarity, with knock on effects on its performance and ability to navigate change.
Simon Clarkson, founder of Purposecraft, a new associate firm of NEDA, sets out in a ‘thought leadership’ article a consideration of the misappropriations of purpose that have obscured its actual definition and resulted in it being overlooked as the board’s most powerful tool and one of the essential foundations of good corporate governance.
To read more on the ‘Truth about Company Purpose’ please click on this link.