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How to harness the power of purpose

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In retail, where the new norm is a permanent state of disruption and distraction, “purpose” is re-emerging as a guide for positive change, a compass for a sector in transition.

But what is purpose? An organisation’s purpose is an aspirational reason for being that inspires and provides a call-to-action for it members, its partners and its stakeholders.

While largely underused, purpose is a powerful asset in business. Research by the EY Beacon Institute highlights the correlation between the extent to which purpose is used by organisations and the impact it has upon their ability to grow, innovate and transform. But only a minority of businesses run in a purpose-driven way.

However, the concept of purpose is starting to gain traction again, not only as a core business driver, but also as a key to attracting and retaining talent. Recruitment by forward-thinking retailers is now as much about alignment in purpose and values as it is about skills and capability, though most still have a fixed mindset, matching round pegs to round holes.

The case for purpose

The renewed interest in purpose and an understanding of how an organisation’s “reason for being” positively impacts business outcomes is encouraging many retailers to switch from focussing on what they do to why they do it.

In the EY Beacon Institute study, 87 per cent of executives surveyed believe companies perform best over time if their purpose goes beyond profit, with 59 per cent of best-in-class purpose leaders seeing purpose as critical to driving transformational change in times of disruption.

Further, 81 per cent indicate that companies with a broader purpose produce better quality products and services, and 85 per cent say purpose drives better customer advocacy. Importantly, executives at companies where purpose is a priority believe their employees are more engaged, with 89 per cent saying purpose drives greater employee satisfaction.

The path to purpose

In retail, it can be easy to fall into the trap of focussing on products, services and profit rather than purpose. It has become more important than ever, however, for retailers to define themselves by a core purpose that endures – why they exist, rather than what they make and sell.

Regardless of whether you are a small local business or a global retailer, or whether you have been in the market for 10 minutes or 100 years, purpose matters. 

For Walmart, its purpose, “saving people money so they can live better”, is as relevant today as it was 50 years ago. Specsavers’ vision to “provide best value eyecare and hearing care to everyone” unites its more than 2400 partners and 30,000 workers across its stores, support offices and the supply chain internationally. Then there is The Body Shop, winning the support of a generation of consumers through its purpose to “enrich not exploit”.

While it is never smooth sailing in retail, remaining true to purpose and ensuring purpose is the lifeblood of an organisation can see retailers grow from single storefronts to globally renowned brands.

It is fair to say some retailers do not have a purpose. Most likely, however, they do not know where to start on the journey to identifying and articulating purpose.

Identifying purpose 

The first step in identifying your organisation’s purpose starts with gathering insight. Speak with key stakeholders – employees, customers, suppliers – and you’ll soon build a picture of what your company stands for, what your organisation cares about and what it is that the business is good at.

Even if your organisation’s purpose is not written down, shared stories can be an invaluable source of insight and inspiration. Consider making time at staff meetings or head offsite to discuss and debate.

Though your company’s purpose will draw on the insights of a broad range of stakeholders, it is the role of leadership to articulate and champion purpose.

Articulating purpose 

When asked to share the purpose of your organisation, it should roll off the tongue effortlessly. Jim Collins, author of Built to Last, identifies five important characteristics of a company’s core purpose:

1. It is inspiring to those inside the company

2. It is something that could be as valid 100 years from now as it is today

3. It should help you think expansively about what you could do but are not doing

4. It should help you decide what not to do

5. It should be truly authentic to your company.

When writing your purpose, be careful not to confuse it with marketing or branding. Your purpose is not a tagline. 

Importantly, your purpose should not changed. It is central to your organisation’s culture, unlike your business strategy which will change over time.

Committing to purpose

​There is a big difference between being an organisation with a purpose and being a purposeful organisation.

To truly harness the power of purpose, it needs to be lived at every level of the organisation, from senior management to the shop floor. It needs to be communicated in a meaningful way and impact every aspect of your organisation. It must be connected to the organisation’s strategy and aligned to performance metrics and recognition, for example.

It is critical for leaders to take every opportunity to share the organisation’s purpose with all stakeholders.

When purpose is actioned, it taps into the basic human need to contribute to something greater. Purpose can create a strong sense of identity and continuity throughout a business. It can be a common ground for diverse points of view and differing agendas – across departments, organisation silos or geographical borders. When purpose falls flat, the flow-on effect through an organisation can be worse than not having a purpose in the first place, resulting in a dip in engagement and performance.

Organisations do need to be wary, however, of falling back into old habits that can creep in during times of intense pressure.

Added values

Purpose is best achieved when reinforced by strong values. Values help to shape an organisation’s culture and enforce behaviours. They guide the way you engage with your customers, business partners, communities and with each other.

Core values can guide decision-making, commitment, diversity, innovation and balance, differentiating your company from competitors. Values are also central to your employee value proposition, becoming a primary recruitment and retention tool. 

Hiring for purpose

Hiring talent aligned on purpose, not just capability, builds a strong foundation for engaged teams.

Organisations with a clear purpose attract talent that will thrive within their culture. Unsurprisingly, candidates are doing their homework on companies, weighing up retail brands based on purpose and values, and where there is close alignment with personal purpose.

Too often there is a disconnect between the theory and the reality of purpose in organisations, which becomes evident when talent is “sold” one version of the truth then experiences something altogether different.

Purpose also plays a critical role in retaining talent. Where employees are driven by purpose and meaningfully contribute to an organisation’s purpose, there is a greater sense of belonging.

The customer connection 

Like employees, customers also see purpose as a differentiator in a cluttered and competitive retail environment. Customers do recognise when organisations empower their people to be brand ambassadors, and the service that comes from highly motivated and engaged staff aligned on purpose. However, this is more about having a sense of a retailer’s purpose rather than being able to clearly articulate it.

This tells us that as an industry, we still have some way to go toward harnessing the power of purpose and the benefits that flow from this. So whether it is to “bring a little good to everyone every day” or to “save people money so they can live better”, it is time retailers let their purpose shine.

The post How to harness the power of purpose appeared first on Inside Retail.

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