The importance of Purpose for an Organisation

The importance of Purpose for an Organisation

This article was first published by Business Times on 6 July 2019

The importance of Purpose for an Organisation

John Bittleston Terrific Mentors International

An interesting study published in the journal JAMA Network Open, recently reported that people with a purpose in life live longer*. Anecdotally, that has never been in question. From our own observations, we see that the important thing is not the length of life they achieve but the meaningful and fruitful existence they have while living it. Having an unmistakable purpose is like having well-tilled soil to plant your shrubs, flowers and vegetables in. For an individual of any age, purpose is the key to a successful life.

It seems that the same is true of an organisation, whether profit-making or not. Non-profits, by definition, tend to have their purpose already clearly defined. They are usually in it for the long haul. A sustaining programme of work, with a clear purpose, is almost inevitable if you are not making a profit.

Motivations for building a business.
Profit-making businesses usually have several motivations. Making the owners rich is one, achieving a technological or inventive breakthrough is another, providing health, comfort, pleasure and employment are also wholly praiseworthy reasons for building a business. As with a house, being the person to create an organisation that works to the benefit of all those connected with – or affected by – it is a terrific way of making something that benefits others as well as you. There are few things more satisfying than being able to say to yourself ‘I built that’. When you can say it, you don’t need the recognition of others.

Successful businesses do not have profit as their main purpose. Profit is a consequence of Need, Demand, Creativity, Diligence and Discipline. Money making solely for the purpose of enriching the owners requires you to be involved in catering to the seamier side of people’s lives and living at the edge – possibly beyond it – of decency and legality. For example, pornography is one of the fastest routes to wealth. No decent person wants to go there.

Designers and builders must engage
Being the architect and builder of a business is among the most rewarding things you can do. But as with all creation, it is dynamic, it doesn’t stand still. Time comes when the builder must cede some of the control for the organisation’s successful development, to others if it is not to stagnate. Like everything in this world, lack of movement leads inevitably to decay. To bring this change about and keep a business stable is a feat worth working for.

Jony Ive, the recently-departed Chief Design Officer of Apple, understands this as well as anyone. I do not know his motives for leaving Apple but I am sure he sees new designers as essential and expects his own relationship with the company to be enhanced by independence. Such change is usually energising. A stable company requires that it has a clear purpose and that the changes, often painful in the short term, revitalise it. Children leaving home produce much the same effect. To dissuade them would be a crime of neglect of the first order. As sensible parents know, it is the release that creates a true family.

The changing purposes of an organisation
Organisations’ purposes are changing. Originally they were strictly to provide a product or service to enhance the lives of those who bought them. The consequences of production and consumption were regarded as someone else’s province – or problem, if they were harmful. Our world has become more integrated, as demonstrated by the rapid climate changes now affecting everyone.

The medical profession has been specialising to address the most intricate and miniscule parts of the human body and brain. Manufacturing and service creation, similarly, has been working to deal with every aspect of living. In the process we have wandered away from the relationship between the different parts. Just as medicine is now pulling together clinical teams to address whole body issues, so industrial and commercial businesses are coming together to cope with plastic waste, toxic emissions and all kinds of hazardous behaviour that affect those beyond immediate customers and users.

Who decides an organisation’s purposes?
The right of ownership has often been mistaken as a right of determination. If you own a piece of land you may think you have a right to do with it what you want. Up to a point, that is true. However, you may not create a nuisance for your neighbours, pollute the surrounding land, harm other people’s property or threaten damage that could be dangerous to the populace. Your ownership gives you rights but they are not unlimited. Similarly for an organisation. As political influence is waning so business influence is growing. It is likely that this will become even more pronounced in the future.

As deindustrialisation increases, the neatly defined purposes that manufacturing provided will disintegrate. They are already being replaced by shorter job spans, an increase in the gig economy, less physical labour and more cerebral and creative occupations. As the world population increases closer to the planet’s current limit, ‘growth’ as an economic concept will have to be rethought. Climate demands already suggest that one of man’s greatest inventions, indestructible plastic, will have to be severely controlled if not totally eliminated.

Organisation as politician and policeman
This will require organisations to rethink their purposes to reflect the needs of the population. They will, by virtue of their creativity and rapid progress, have to safeguard – not just in the interests of society as a whole but with a view to maintaining a consumer base to sustain their sales. The role business will play in this scenario is one initially related to the output of the business. As that becomes more diffuse an organisation will be expected to widen its area of responsibility. It is not too much to expect that business will have to be the driver if humanity is to survive.

Business has not always been responsible, is not always responsible today. The pressures of making profits are pretty much dictated by shareholders who often see themselves in a race to win at whatever cost to others. While competition is undoubtedly good, it is best kept out of the lifeboat.

Business people will do well to have the following questions on the agenda for their Board Meetings:

# What harm could we be accused of perpetrating on shareholders, customers, employees, suppliers, the community at large?

# What good do we do for people beyond our immediate reach, whether or not it has an immediate public relations benefit or not?

# What more can we do to enhance the environment in a way that our shareholders will regard as good enough to allow a less than maximum dividend?

# How do our future plans enable the business to be compatible with the growing call for a circular economy?

Learning how to cooperate without cheating the customers, at the same time as competing without destroying everyone else is a journey we have been on for a long time. The resources to control both ends of the spectrum are now available to us.

Business people should be the first to grasp them and ensure balance in society.

Published by JAMA Network Open