Insight article
Why purpose-led mission and narrative hold the key to transformation
A new report has recognised purpose-led mission as the driving force behind the world’s most successful business transformations. Narrative is the fastest and most sustainable way to harness its value.
In these times of urgent global challenge and acute social awakening, it’s no secret that the world’s most influential and successful businesses have a distinctive mission at their heart. From Google’s quest ‘to organise the world’s information and make it universally accessible and useful’ to Monzo’s wish to ‘make money work for everyone’, a defined objective of clear social value is the key to sustained collective effort and inspiration.
So accepted has this wisdom now become that the Business Roundtable – the influential US business lobby group – last month released a statement signed by 181 CEOs stating that “serving shareholders can no longer be the main purpose of a corporation; rather, it needs to be about serving society, through innovation, commitment to a healthy environment and economic opportunity for all.”
But purpose-led mission lends itself more naturally to some industries than others. It’s easy to spin an inspiring story when a business has been built from the ground up to deliver a specific social calling. Far harder for the world’s most established organisations, operating in industries of increasingly dubious or tarnished repute, to boldly stake a claim on a mission that matters. Many leaders – paralysed by the fear of hypocrisy and the enhanced scrutiny such pivots entail – remain stuck in the quagmire of debate long past the point of timely action.
One burning issue no board will dispute is the need for continuous change or wholesale transformation in this era of rapid reinvention. Given their hefty (but disputed) failure rate, transformations that truly transform garner huge interest – and now a fascinating new report has recognised purpose-led mission as the driving force behind the world’s most successful business transformations.
As its authors noted in Harvard Business Review this month, ‘that strategic impulse—to identify a higher-purpose mission that galvanises the organisation—is a common thread among the Transformation 20, a new study by Innosight of the world’s most transformative companies’. Furthermore, they argue, ‘it’s the decision to infuse a higher purpose into the culture, one that guides strategic decisions and gives clarity to everyday tasks, that has propelled these companies to success’ – over and above the new growth strategies the top-ranking businesses have pursued.
But to ‘infuse a higher purpose into a culture’, mission must become engrained as a cultural narrative that meaningfully connects everyone to their work, their leaders, and their colleagues. It must be brought to life by leaders who walk the talk. And it must provide a framework for change that everyone, whatever their role, can make their own. This is no easy feat, and requires a focused, holistic, and visibly leader-led effort to sustain it. Yet as the authors note, ‘in an era of relentless change’, it is this capacity for narrative – an organisation’s ‘ability to reposition itself to create a new future, and to leverage a purpose-driven mission to that end’ – which, more than anything else, determines success in today’s dynamic world.
When this is achieved, the results are truly transformational.
Consider wind energy business Ørsted, whose decision to divest its oil and natural gas businesses and begin phasing out coal necessitated a profound shift towards wind power, only to find the cost of off-shore wind untenable. Galvanised by the challenge and the opportunity, it succeeded in mission ‘impossible’: cutting the cost of off-shore wind by more than 60% while scaling into the world’s largest off-shore wind company and upping net profit by $3bn.
Yoghurt behemoth Danone achieved a similar feat when, under CEO Emmanuelle Faber, it set out on another ‘impossible’ task to improve biodiversity by halving its dependence on GMO products. Infused with clear-cut purpose, the business achieved the shift in two years while growing its US marketshare by 10%.
Ecolab – now one of the world’s leading water-efficiency businesses – evolved from its core business of industrial cleansers and food safety services in response to its clients’ growing concerns about water-scarcity. As HBR notes, this mission is made real by measurement: ‘A primary metric driving the organisation is how much water is saved by its clients annually, which now stands at 188 billion gallons, against a 2030 target of 300 billion gallons.’ Ecolab’s market value has now surpassed $55 billion, making it one of America’s top 100 most valuable firms. But as CEO Douglas Baker recognises, these shifts are not the guaranteed outcome of evident market opportunity. They’re rare examples of what is truly possible when people, fuelled by purpose, unite with one mind to make change happen. “We broadened our vision and our purpose changed,” CEO Douglas Baker says. “As our teams widened their awareness of global issues, our pride has been enhanced.”
