The purpose bubble
Don’t get me wrong: I believe that doing business with purpose is essential. It is also undisputed that consumers and other stakeholders ask for it and value it (= demand). It is also a fact that a lot of companies have a visible big pile of things left to do (= supply). Demand for purpose should meed supply of purpose initiatives. Until it doesn’t.
The purpose bubble is blown up by companies in three ways: first, by making empty promises of social responsibility made in a time of economic expansion; second, by word-smithing empty purposes with no connection to strategy and operations; third, by gift-wrapping myopic homework of sustainability and social impact as game changers for saving the world.
First, empty promises. In August last year 181 American CEOs pledged to serve staff, customers, communities as well as shareholders. A promise, made in a phase of economic expansion, that is either just plain repitition of an established theory, or a promise that they will not be able to keep . The stakeholder view of the firm has been around since as early as the 1970s (Mr. Kroos and Mr. Schwab) and the 1980s (Mr. Mitroff and Mr. Freeman). While it comes across as more noble as the shareholder orientation of the older days, it still means a balanced view of interests, not a homogeneous one — the latter would be hard to keep when staff or other resources need to be reduced to keep operations running.
Second, empty purposes — or what I call “purpose creep”. A defined purpose is essential for any organization (from companies to teams to individuals) to ensure a shared objective, a shared commitment towards it and a shared benefit for more than just those working on it, but those the organization is trying to serve (see stakeholders above). However, words are easy to come by — operationalization is not. A purpose is immediate: achievable (in parts) today, not just tomorrow — and so often mistaken with a vision, to be achieved in a far-far distant future. A purpose lives inside: linked to strategy and operationalized within the various streams of value creation — and still it often stays a piece of paper with only a lyric or campaign-based link to actual operations. A purpose is felt outside: with tangible impact on the ones the organization serves — and yet so often it lacks any follow-up and measurement of results.
Third, gift-wrapping of CSR homework. Don’t get me wrong: almost any corporate initiative to increase the purpose operations is infinitively better than not doing anything at all. However, the lines between correcting simple operational wrong-doing of the past and driving real innovation for greater purpose are often blurred. Demand for purpose and purposeful work is high and growing — but organizations risk to overpromise (empty purposes) and underdeliver (homework) if they focus on addressing drawbacks around sustainability or existing assets for social impact only — instead of innovating new solutions or really changing how value is created from the ground up. Purpose is not corporate social responsibility. Purpose is not sustainability. Purpose is business.
What needs to change?
Organizations need to critically ask themselves if their quest for purpose is 1) lasting 2) real and 3) disrupting — and by that actually has true meaning. Organizations should value honesty and transparency in communication and action win over romantic statements that will fall down at first sight of economic challenges. Organizations should focus on actions that implement purpose, results that show purpose instead of stories and campaigns that simply talk about purpose. Last, organizations should leave the defense of cleaning up the past and instead use their purpose to build the future — while continuing to do their homework that social change and technological advancements enforce and empower them to do.
The bubble is real. But it does not need to burst.
