By EloInsights
- Purpose should be the essence of an organization and guide the transformation and evolution of the brand.
- This message must be transparent and its construction involves a series of actions, such as listening to stakeholders to identify how the company places itself and is seen by the ecosystem around it.
- The article proposes a framework, as well as three stages for achieving the definition of purpose, with indications of methodologies and approaches involving the organization and its stakeholders.
Nowadays, we are living through accelerated processes of digitalization and technological transformation that brings with them profound changes in cultural codes, as well as a series of other structural reformulations that impact, not only on people, but also on organizations. Competitiveness has increased, as has the collective awareness of the significant role of companies in building a better world. In this context, brands are forced to sophisticate their strategies to differentiate themselves.
Delivering value can no longer be restricted to the quality of products and services, it needs to be broadened to include new demands for a consistent brand positioning, actions that are relevant to society and the defense of causes that contribute to a more balanced world. In other words, the importance of a strong purpose that gives meaning to and guides all these actions has increased significantly, or organizations run the risk of appearing outdated, disconnected from the pulse of time.
The Post-Purpose Brands survey by consultancy Eixo outlines this scenario and reveals how companies are gaining relevance in terms of directing and transforming the public mindset. There is disbelief in institutions and, for 61% of those interviewed, private companies are the only ones seen as ethical and competent. This gain in credibility adds to the demands.
Current and future consumers – especially the ones from Generation Z, born between the late 1990s and 2010 – are interested in products and services just as much as they yearn for causes and positions. People are looking for a connection with brands and there is a feeling that prioritizing profit sustains an exclusionary system. Purely advertising narratives must give way to solving problems such as environmental destruction, racism, lack of inclusion and social and gender equity.
It is essential for organizations to engage in shaping a more sustainable, plural and less exclusionary future. “The purpose will guide the company’s entire transformation towards this future direction. If it is well designed, it will say a lot about what has already been achieved and what the company wants to be. It will be an antenna for the future, almost a beacon”, states the business specialist Bruna Baffa.
In this post-purpose logic, beautiful narratives do not work without practice and commitments aligned with the concept of ESG – that is, within the environmental, social and governance spheres. Complexity is growing and there is no more room for indifference. We need to engage in dialogue with new political and social arrangements, with more collective forms of organization and emerging cultural codes which, driven by new generations, are renewing values and transforming normativity. And there are already companies taking this to another level.
Patagonia, an outdoor clothing and equipment brand, for example, has turned its entire operational structure towards stepping up the fight against the climate crisis. According to the company, what is not reinvested in the business – an estimated of U$100 million a year – will be distributed as dividends to fund environmental organizations, support political candidates and invest in businesses that protect nature and biodiversity.
The purpose gives “direction” to the effort to generate value. It is materialized not by the inspiring and concise message it conveys, but by the initiatives with a positive impact that support it. When transparent and authentic, it translates into initiatives stamped with the organization’s values and the way it stands up and contributes to transforming the world. It can also have the added advantage of attracting and keeping the most qualified professionals, who will make all the difference in the business journey.
Drafting a company’s purpose involves a series of actions. Firstly, it is necessary to understand what motivates the organization to generate value. This involves investigating what values are perceived and delivered by each of the different stakeholders.
In other words, it is not enough to make your own reading of the company, you must listen to everyone around it. A key point is to involve employees at all levels, from the most junior to executives, before, during and after the journey of building purposes, as well as suppliers, partners, customers and even former employees and competitors.
This deep dive should result in the definition of a powerful purpose, translated into a message that carries the essence of the organization, as well as reflecting the construction of paths for the constant transformation and evolution of the brand, its processes and the areas of the organization itself.
Throughout this article, we will present a framework to guide this definition. However, if we illustrate organizational purpose, it arises from the intersection between what the company does best and what it is capable of positively transforming in society through its existence and actions:
A framework for building purpose in companies
To define a consistent purpose, the great challenge lies in making tangible the vision of the future that will guide the organization. Its design is drawn up in search of the brand’s deepest essence. It involves making it more human, unveiling its reason for existing and connecting it to a strategy that engages stakeholders.
The essence will be put into practice at all ends of the business in the form of goals, the evolution of the creation of value flows and the cultural traits that are essential to achieving the organization’s key objectives.
Three stages help organize this construction:
- Define the purpose: this is the essence, the DNA, the reason for the brand’s existence. It is the direction and creation of a message that involves different stakeholders, capable of creating a connection and bringing relevance to the brand. It includes defining the mission statement, brand ideal and tagline;
- Establishing trade-offs: this involves unfolding the purpose in the organization. What will the company have to give up and adjust within its traditional logic to align itself with the established purpose? It is everything that should or should not be done to make the purpose a reality; and
- Implementing strategic actions: based on the first two stages, strategic management actions are mapped and applied that will lead to the implementation of the purpose in different areas of the organization. Once put into practice, the purpose brings about cultural and systemic changes. For example, it brings together business areas so that initiatives take shape and are seen as a movement of the whole company and not of a specific area. This is where the impact of the changes will be measured, how barriers will be broken down and what the solutions will be to realize the purpose.
Next, we will go into more detail about the framework created by EloGroup:
How to define your purpose
Defining the purpose is a phase of research and discovery. The message cannot be something different from what the organization already is or does. It must translate into something that needs to be emphasized, but also bring a point of attention, a provocation for change that drives the company to evolve.
As mentioned earlier, the only way to define a consistent purpose is to unite the internal and external perspectives of the stakeholders. This involves interviewing employees at various hierarchical levels, suppliers, partners and customers. In the process, you can also turn to former employees and even competitors to fully recognize the brand and capture its legacy.
The company’s perspective on the world must also be considered. This view can come both from interviews and focus groups with the people mentioned above – when they will be invited to reflect on how the organization connects with society – and from insights generated by other methodologies. These include semiotic analysis, which is based on historical and cultural representations related to categories and markets considered key to the company.
The crossing of these different layers will set up the most relevant codes in the construction of the creative territory of purpose, which usually results in possible languages and the tone of the message that will be associated with the brand. No organization is seen as just one thing. It can be, for example, human, technological, pioneering or futuristic. In other words, there are countless possibilities, which can complement each other until they materialize into a more complete message.
To translate all this into a more practical form, let’s use the EloGroup brand as a guide. In this case, we start from a creative territory that revolves around the words “power” and “transformation”. These terms set the tone for our message of purpose: “We want to create a world where people and organizations unlock their potential to drive a spiral of positive change around them”.
According to Baffa, “the purpose is a bigger, more complete sentence. Then, respectively, comes the mission statement that encompasses everything you want to say, the brand ideal and a tagline, which are more concise; a ‘killer’ phrase to summaries the message”.
We can say that the mission statement, brand ideal and tagline are elements that communicate the organization’s purpose to the world. In the case of EloGroup, the brand ideal is the message “Together with those who challenge themselves to unlock their fullest potential” and the signature is the hashtag “Unlock Your Potential”. The mission statement, which is the materialization of the purpose message in an inspirational piece, was made in video format.
See the image below, which summarizes the whole creative process:
How to set up trade-offs
For the purpose to be real and generate engagement, it is necessary to establish trade-offs, which means making some adjustments within the company’s current reality. What should and should not be done from now on to realize the plan? Again, the direction is given by the organization’s way of doing business and the nature of the relationship set up with each element of its ecosystem.
For example, if the company sets out to be horizontal and collaborative but does not act accordantly at any point in the business chain – be it with suppliers, in the purchasing process, or even internally with its employees –, it needs to change these practices and live up to the purpose.
Through workshops with the different business areas, trade-offs are defined on two fronts and on three levels:
| CULTURAL TRADE-OFFS "Ways of Being" | OPERATIONAL TRADE-OFFS "Ways of Doing" |
|---|---|
|
What can be changed in the organization’s culture to improve communication, relationships and engagement in the materialization of the purpose. |
These are practical management and business points, for example: opportunities and alerts related to adjustments in the business model. |
| UNSELLABLE | IMPORTANT | IDEAL |
|---|---|---|
|
These are points of attention in the current vision that prevent the purpose from materializing, or real barriers in the way of being and doing that contradict the direction of purpose. It is therefore the most urgent thing to change. |
Opportunities are the minimum viable or essential points that are consistent with current maturity. They can represent game-changing points and can already begin to be incorporated. |
Here are the boldest ideas to materialize the purpose. These are the ones that will require the most investment and energy, but which will have the greatest impact on the organization. |
How to implement strategic actions to break down barriers
We can summaries this stage as the practical application of trade-offs. It is from this process on that the barriers preventing the full realization of the purpose will be tackled and broken down. Generally, cultural and systemic changes are needed, affecting processes and, at the same time, opening space for opportunities and solutions that strengthen and reinforce the message of the purpose.
“I can bring one area together with another; make an initiative connected to a world agenda, defending a cause; change my employer branding process and build a different selection process, with the participation of my employees”, exemplifies Baffa.
It is essential that the initiatives outlined are understood as belonging to the company, because purpose is never connected to just one area. It is the organization that sustains this purpose, and it reverberates in various actions, which can be carried out by several areas working together.
Why it is important to define a purpose
Defining a strong and clear purpose is now essential for an organization to thrive in a scenario that demands a new management paradigm. It is through this that the company will connect to the wider social context, intensify its positive impact on the world and, thus, attract and keep talent, as well as improving its public image.
Talented professionals no longer consider pay and financial advantages to be the most decisive factors in choosing an organization to work for. A 2021 Gallup survey shows that a 10% improvement in employees’ connection with the organization’s purpose can reduce employee turnover by 8.1% and increase business profitability by 4.4%.
Therefore, defining a purpose and acting by it has become a matter of survival for an organization that wants to set itself up as a platform for talent, guarantee its ability to generate value and be at the top of its game.
It is not enough to choose a catchphrase. You must convert this intentionality into practical measures that are reflected in the organization’s daily operations, which will invariably have an impact on countless stakeholders. To align with the complexity of the world, you must listen to collective causes and learn to dialogue with the diversity of existences and experiences. Establishing a purpose keeps the brand on the move, more connected to reality and with a keen eye for opportunities that lead to innovation and the construction of paths towards the future.
