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Why Purpose is important for Organisations – Organisation Development

Like the human heart organisation purpose is more than just the centre of organisation, it provides the lifeblood to the whole of the organisational system.  It connects, refreshes, renews and brings life to every single corner of the organisation.  If any part of the organisation becomes disconnected from the purpose of the organisation it will wither and fail to function properly, like a limb cut from the body’s blood supply. 

Growth requires Purpose

When discussing organisation development very often it is suggested that the start point is strategy.  But where is strategy created from?  Where, in all the managing, planning or giving it a go of strategy that an organisation must follow do the ideas come from to decide what strategy an organisation should be following, and who decides?

An organisation must answer the question “What is our purpose?”  You may think that I am playing with semantics to talk about purpose.  There is so much management speak already, so what is so different about using the word purpose as opposed to strategy.

The Oxford English Dictionary defines Purpose as “the reason for which something is done or created or for which something exists” whereas strategy is about a plan of action.  At an individual level purpose is being rather than doing.

“Purpose expresses the company’s fundamental value – the raison d’etre or over-riding reason for existing. It is the end to which the strategy is directed”  Richard Ellsworth

So when I speak of an organisation answering the question “What is our purpose?” the answer is not a profit number, or a growth percentage.  Rather purpose is what is at the very heart of why the organisation exists.  When all is said and done it is what really matters.

Is it possible for an organisation to be successful without having clarity around its purpose?  Yes. Organisation’s have been and will continue to be successful without having a purpose. But the world is changing, and the pace of change is increasing.  What used to define competitive advantage has shifted from efficiency to effectiveness.  Efficiency can be repeated, copied and adapted and is based on structures, processes and hard systems.  Effectiveness comes from utilising knowledge, innovation, creativity which comes from people.  People are unique and provide a critical element of competitive advantage for an organisation.

In Shaping the Future research the CIPD found that “feelings towards profit-related purpose are generally negative, with employees saying it makes them feel de-motivated and less committed to their organisation. Nonetheless, just under a third feel that focusing on investors is the right thing to do in the long run. It seems in order to produce a motivated and committed workforce, the main purpose needs to have a social basis to it – profit does not seem to ‘kick start’ the workforce.” (CIPD, Shared Purpose: The Golden Thread, 2010)

Efficiency can be created without meaning being understood, it can be achieved by doing things better.  But effectiveness requires people to have a sense of purpose and for people to commit to the direction an organisation is taking; they require an organisation to have a meaningful purpose.

I can’t remember if I read or heard the story about a NASA employee who was sweeping the floor and was asked what his job was, he answered it was to put a man on the moon; a purpose which was articulated by John F. Kennedy in a statement in 1969.  But even if this story is nothing more than an urban myth, it illustrates the power of purpose more than any other.  The individual had purpose in what he was doing, he wasn’t doing some low grade job he was putting a man on the moon.  When I think about that story I imagine the pride that the employee must have put into his job, and how motivated he must have felt when his alarm clock rang in the morning.  Organisational Purpose inspires purposefulness in employees and surely that is something all organisations would want to aspire too?

Therefore in the new global economy, the difference between an organisation which can sustain performance and one that can’t will be the clarity of purpose which is shared among all employees.