Purpose: A $9 trillion dollar corporate buzzword. Time to include it in EXM strategy?

In this article discover and learn about:

The rise of the $9 trillion dollar purpose driven corporations.
The evidence: Benefits of fostering a sense of purpose among your employees.
Example EXM survey questions to measure purpose in your organisation.

The rise of the $9 trillion dollar purpose driven corporations

Late in 2019 the US based Business Roundtable association which represents CEOs from the US's largest employers announced it was redefining the "Purpose of a Corporation to Promote 'An Economy That Serves All Americans'".

Pivoting away from serving shareholders as the primary driver of business, this was a declaration that says a corporation's purpose should be meaningful to all it serves: customers, suppliers, communities and critically employees too.

This announcement was significant when you looked at the the 180 CEOs signed up to it. It included the CEOs of Apple, IBM, Amazon and GE to name a few. They employ 20,000,000 people and generate $9 trillion in revenue. Put into perspective if this group of purpose driven organisations were a country, it would be the third largest by GDP placing it ahead of Japan.

Now to be clear, the idea of a purpose driven organisation is not a particularly ground-breaking one. What was different about this announcement was that it was an official nod from these corporations on making purpose driven the new normal. Being purpose driven no longer makes a company "progressive" or virtuous. It's now the expected mode of business operation. It demands more consistent self-awareness from business leaders to define and nurture their organisation's purpose beyond just being about shareholder value.

Purpose driven organisations need purpose driven people

This announcement meant good news for employees and EX noting the Business Roundtable's statement reads:

"This starts with compensating them [employees] fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect."

This all sounds great in a press release. What we cannot overlook however is that if organisations want to realise their 'purpose driven' good intentions, then they will need their employees - the real engines of the organisation - to be purpose driven too.

In terms of what a purpose driven employee looks like, it's one who identifies with, internalises and wants to integrate their organisation's purpose into their own self-identity and sense of agency. This is by no means an easy feat to achieve. That said the evidence suggests fostering a sense of purpose within employees has a potential significant pay-off for both employees and employers alike:

The evidence: Benefits of fostering a sense of purpose among your employees

A review of research literature by van Tuin et al. found that the more employees identify with and intenalise their employer's sense of purpose, the more self-determined and motivated they will be to contribute to corporate objectives. On the other hand, if employees have not internalised the corporate purpose then work gets done for the sake of material reward.

A 2020 study published by the Journal of the Academy of Marketing Science demonstrates this. It found that purpose was positively associated with the performances of sales teams. The research found that sense of purpose had a stronger impact on salespeople's effort, adaptivity and performance than extrinsic factors such pay and incentives.

Longitudinal research also reaffirms this too. In 1995 the MIDUS study was founded to investigate the long-term impact of psychological and social factors on later life outcomes such as wealth, health and employment status on over 5000 people.

In 2016 a group of researchers analysed two MIDUS data sets between 1995 and 2004. The researchers found that sense of purpose was a strong predictor of higher income. The authors of the research explained that having a sense of purpose drives people to pursue goals which makes them more successful in their occupations. It seems that purpose plays an important role in driving learning, development and success at work.

Purpose driven employees experience better health and wellbeing

In HR's toolkit of health and wellbeing solutions, a sense of personal purpose could hold important value as a driver of better health and wellbeing outcomes for organisations.

For example with some organisations looking at making Covid-19 vaccinations mandatory as part of a safe return to work, evidence from a 2021 study of over 2,000 people found that a sense of purpose was a predictor of Covid vaccination willingness.

Sense of purpose may also help to moderate the impact of daily stressors at work (Hill et al. 2018), reduce behaviours linked to poorer health outcomes (e.g. smoking, heavy drinking) and reduce the risk of depression (Kim et al 2021). A sense of purpose appears to be related to a reduced risk in cognitive decline too (Boyle et al 2010).

Purpose driven employees are more engaged and less likely to leave

Research by van Tuin et al. found that sense of purpose is directionally linked to future levels of employee engagement. This research reaffirms the idea that being inspired by a corporate purpose makes employees want to positively contribute to its realisation rather than just show up to work for the sake of getting paid.

'Meaningful work' appears to be an important predictor of whether or not employees are likely to become disengaged and leave an organisation.

Measuring purpose in your EX survey

Given the Business Roundtable announcement and the evidence of benefits to both employees and employers in being purpose driven, more organisations are now looking at measuring a 'sense of purpose' in their EX surveys.

If your organisation is looking to add this as a topic in your next broad EX survey, then there are four purpose lenses to consider asking questions about:

Organisational Purpose and Mission
My Team's Purpose and Mission
My Alignment and Impact
Impact on Stakeholders

In terms of the types of questions to ask, review your existing survey as you may already be asking a few questions around these topics already. Consider adding more from either standardised statements available from your EXM provider or by building your own set to suit your organisation's unique purpose. Below are some example statements from PeopleNav to help you get started:

This organisation's purpose and mission is meaningful to me
I am inspired by the purpose and mission of this organisation
It's clear to me how my team contributes to this organisation's purpose and mission
I feel able to contribute to this organisation's purpose and mission
My manager regularly asks me about my future ambitions here
This organisation delivers on the promises it makes to its customers
I believe this organisation makes a positive impact in our communities

In terms of analysis, do not group all your statements together as one big 'sense of purpose' index. This could create a statistically meaningless index if there is a wide range of scores between questions. It would be better to group similar questions to create more specific indices e.g. Organisation Purpose, Personal Alignment etc. Alternatively use a cluster analysis and dendrogram (or expert advice from your EXM advisory partner) to identify how best to group and analyse your questions.

A final note of caution about measuring a sense of purpose in surveys

As this article highlights, this is an important but sensitive and somewhat intangible topic. If you decide to start asking about purpose in your survey then be prepared that it will likely arise as a high impact area in your survey results (unless you already have high employee engagement).

If you do not feel your leaders have the maturity to grapple with this intangible topic yet, then it may be better to hold off measuring it. Consider raising awareness of the topic first with leaders and getting their buy-in before adding into your survey.

Hugh Hawthorne is the founder of PeopleNav. PeopleNav partners with organisations to unlock EXM insights and enable HR to make better data driven decisions through People Analytics.