Chapter 3

Introduction to Organizational Purpose

Purpose is the common ground, the intersection between your passion and talents and the needs of society. It is your vocation, the sweet spot where you can find true meaning and fulfillment. This idea applies to organizations as much as it does to individuals.

The authors of The Purposeful Company articulate the essence of purpose as follows: “The purpose of a great company is its reason for being. It defines its existence and contribution to society. It determines its goals and strategy. Underlying it is a set of values and beliefs that establish the way in which the company operates. Purpose is as fundamental to a corporation as our purposes, values and beliefs are to us as individuals. This purpose must be sufficiently compelling and inspiring to invigorate all members of the company community.”¹

Purpose fosters meaningful innovations and visionary ideas and helps your business navigate turbulent times. It injects greater power into your brand’s message, helps attract the right talent and keeps that talent longer with the organization, contributes to personal fulfillment and a life well lived, and generates higher financial results in the long run.

Having a clear and inspiring organizational purpose makes a huge difference. It focuses a company’s energies and illuminates the path forward.

Here are some examples of purpose-driven companies.

Google’s purpose from the beginning was to “organize the world’s information and make it easily accessible and useful.” This purpose could seem like an infinitely arduous task, as information expands every day, with more discoveries, more research, and more history being made. After making sure their algorithms captured all the new information generated on the web, Google addressed the nondigital world. The company started to scan books; shoot images from the analog world; map streets, the countryside, and, eventually, the whole planet; and made this information universally and easily accessible. Now it has started a new wave of innovation that, for example, includes driverless vehicles.

Barry-Wehmiller, an industrial machinery company based in St. Louis with operations around the United States and in several other countries, defines its purpose in terms of its impact on people: “We measure success by the way we touch the lives of people.” During the financial crisis of 2008, many US companies downsized, firing part of their workforce. Barry-Wehmiller faced a huge challenge then. New orders dried up almost completely, and many of its clients canceled existing orders. Financially, there was no easy fix to make up for those lost sales; the cost structure had to be reassessed. The company’s leadership team came up with an idea. If every employee took four weeks of unpaid vacation, the company would save enough to make it through twelve months of the downturn. Leadership allowed the employees to decide when to take these four weeks off. Many employees altruistically stepped forward to take even more time off so that some of their colleagues could take less. Those who could not afford to take unpaid vacation because of higher financial commitments took fewer weeks, and those who could afford to took longer periods off to reach the four weeks’ unpaid time off per employee.

The idea was extremely well received by employees and even embraced by the unions. Morale actually rose during the downturn as fear evaporated and a sense that “we are in this together” took hold. As a result, once the economic downturn was over, Barry-Wehmiller was in a much better position to recover and address rising market demand. The year 2009 was one of the best years in terms of financial results in the history of the organization.

For Southwest Airlines, the company’s purpose has long been to “give people the freedom to fly.” In 2008, while most other airlines decided to start charging for checked bags, Southwest Airlines, which had more than thirty years of profitable quarters, decided not to do so, despite recommendations from consultants and a possible $300 million upside in revenue. The decision was based on the company’s purpose: enhance people’s freedom to fly. Would charging for bags move the purpose forward or detract from it? The answer was pretty obvious. Helped by an effective ad campaign that celebrated its decision to let “Bags Fly Free,” the airline found that sticking to its purpose helped it generate close to $1 billion in incremental revenue at a time when the airline industry was losing sales.