Reimagining Purpose as Part of Strategy Development and Implementation
The pandemic has exposed many faults in the business world, one of those being how strategy is thought of and used. Strategy has, for some time, been perceived as a concept, devoid of the day-to-day challenges of the business and the stakeholders upon which the success of the business depends. Reimagining strategy takes into account that strategy is first and foremost a leadership tool and not, as is often thought, a function or activity. It is part of the toolkit with which every board member and senior manager should be equipped, knowing not only how to develop strategy but also how to ensure its successful implementation.
The starting point is Purpose. Greek philosopher Aristotle is said to have believed people and organisations need telos, a concept that provides meaning and Purpose and adds value to our lives. My own doctoral research has shown that meaning and Purpose contribute to ‘buy-in’. Buy-in is the acceptance of and willingness to actively support and participate in something. Yet engagement surveys repeatedly show that staff do not buy into their organisation’s Purpose – that is to say, if they have one! But, in the age of the knowledge economy, it has become even more important to engage staff and gain buy-in to remain competitive and grow.
Let’s talk about how this conundrum of lack of buy-in and poor engagement might have come about. First, there are the old business school teachings (still taught) and consultancy interventions insisting that an organisation needs a mission and a vision solely to create shareholder value. This is an antiquated view that should no longer be promoted. A board’s fiduciary responsibilities, for instance, have now widened to include the broad definition of stakeholders. Corporate social responsibility (CSR) is a reported item in annual reports and environmental, social and governance (ESG) activities are at the forefront of customers’, employees’, suppliers’ and even investors’ concerns. These all have one thing in common: the clarity of an organisation’s Purpose.
However, notwithstanding that mission and vision often tends to be a wordsmithing game played by boards and has little significance to staff, Purpose has also been, until recently, perceived as nothing more than a marketing strapline, and not a practical tool or, importantly, the starting point for strategy development. This is certainly not helpful!
A second reason is the pressures that drive management to want to leap into the ‘how’ before resolving the ‘why’. A strategy should look after the long-term sustainability of the organisation, but despite this, things like quarterly reporting and monthly targets often override the organisation’s strategy. In the absence of doing their homework on Purpose, management’s approach to achieving short-term targets has been to default to a command-and-control style, adopting the mantra of Nike’s ‘Just Do It’.
Purpose is a journey. Imagine you are asked to help someone, but you don’t know why or where you can add value to that someone or what value it is to yourself. How can you decide the ‘how’ without this information?
Creating an externalised Purpose, setting goals and choosing strategies that are fact-based leads to the success of those strategies. Purpose is about carving out a clear and tangible place in the market that translates into meaning and value for customers, staff and other stakeholders. It provides a description of why the organisation exists and the value it creates, which staff and other stakeholders can link to emotionally and rationally. It, along with the values of the organisation, guides the organisation’s strategies and day-to-day decision-making (the ‘how’). Having a Purpose-led strategy is about ensuring successful implementation of the strategy.
Creating Purpose, setting goals and choosing strategies that are relevant, customer-focused, fact-based and in the context of market reality, ensures every employee is engaged and able to contribute to the achievement of the goals. The value of strategy is in developing agility, resilience and a strategic mindset within the organisation to identify opportunities and manage risk, build stakeholder engagement and stress-test the business to survive, revive and thrive in the future.
‘Survive’, particularly relevant to some organisations during the pandemic, is the here and now. This means ensuring the existing unknowns of the business become knowns and are dealt with. Leaders need to know all the potential risks (and upsides) to the business, including financial, organisational and stakeholder, e.g. employees, customers, and suppliers. Leaders must know, for instance, the goals, strategies and challenges of their most important customers, who their most critical suppliers are and who in the business creates the most value. These assets must be protected.
‘Revive’ is where the business considers the ‘new normal’. This requires the identification and close monitoring of key indicators. For instance, seeing where potential customer bases are shifting to, as well as how the supply chain is morphing, and drawing up new strategies to accommodate.
‘Thrive’ is the biggest challenge. This is not just accommodating the ‘new normal’ but the reimagination of the business and making sure the Purpose is relevant. Some businesses will be stronger from consolidation. Others will be new challengers to the incumbents because of technology and/or access to information that brings them more insight.
The real question is whether your organisation is really clear on its Purpose and do staff and stakeholders buy into it?
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