Want to make more money? Make sure your employees feel like they’re working for something greater than just profit.
You may have already sensed that companies with a clear sense of purpose do better than those without one. A new study from Deloitte confirms it: organizations that focus their energies beyond pure profit do better than those without a “culture of purpose.” And yet, the survey also reveals that most executives and employees think that businesses aren’t doing enough to create this kind of culture.
The survey, which sampled 1,310 U.S. adults, found that 90% of people who believe their organization has a strong sense of purpose also report a strong financial showing in the business over the past year. They also report high employee and customer satisfaction. Only 65% of respondents who say they work for an organization without a strong culture of purpose report a good financial performance in the company. Customer satisfaction is relatively low (63%) and employee satisfaction is dismal (19%).
There’s a disconnect, though, between how employees and executives view their organizations. While 64% of executives believe their company has a strong sense of purpose, only 54% of employees think the same thing. Just 59% of employees think that their company’s business strategy goes hand-in-hand with providing products that are good for society–but 73% of executives share that belief. “The disconnect is that there is a difference between intent and actual execution. It’s not just enough to talk about a culture of purpose,” says Punit Renjen, Deloitte’s chairman.
Dunder-Mifflin, the fictional paper company portrayed in The Office (RIP), is the perfect example of a company without a culture of purpose. Employees are directionless, managers provide no mentorship, most workers are apathetic about the product they’re selling, and they don’t do much for the community.
…Creating this sought-after culture of purpose sounds simple in theory. Renjen recommends figuring out the culture first and measuring it second. “I’ve always believed and it’s born out by our research that if you aspire to be an exceptional firm over time, you must do a couple of things: you must have a clearly articulated strategy based on your core competency, the competitive landscape, and the environment that you operate in,” he says. “Exceptional organizations also answer questions as to who they are.”
That’s easier said than done for large, older organizations that have stumbled along for decades without a real sense of purpose. But it’s a big opportunity for newer companies that can embed their values into the business from the start. Companies who succeed will be handsomely rewarded by passionate young employees. Says Renjen: “It’s very important–in fact it’s critical that when millenials and talent of this generation making decisions as to where they’re making careers that they look to organizations with a clearly defined culture of purpose.”
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