What it’s like to lead a company with a purpose driven strategy.
I still smile when I think of the moment when everything was in flow - my leadership team was working as one, our workforce was engaged, and the business was smashing its targets. This was the turning point in my journey from a strategy professional to the CEO of the CVC backed startup Fulfilio - when I finally came to understand the power of putting purpose at the core of strategy.
It wasn’t easy to get here - as a startup born within Australia Post (a government corporate with a 200 year history) we needed to conform our strategy to their agenda, whilst also maintaining the independence needed to foster innovation. At first we achieved this by creating our own identity through our brand, our culture, and our ways of working. However when we entered a phase of rapid growth, our workforce started to question the direction and vision for the company.
I struggled with this initially - mainly because I thought we had laid out all the guidance we would ever need - our strategic priorities and targets were clear, we had large visible dashboards to measure our progress, and everybody’s roles and responsibilities were well defined. What dawned on me however, was that I was deploying a model of management that was sufficient for an established business, but less than adequate in a high growth startup environment.
I was deploying a model of management that was sufficient for an established business, but less than adequate in a high growth startup environment.
All of the great leaders that I admired, both in the business and political arenas, inspired me through their unwavering commitment to a mission or a cause - especially when there was a connection to who they were and their pathway through life. And so, when I was able to make sense of my own journey, then the purpose for our business started to emerge - “to enable businesses of all sizes to shape the future of ecommerce”, and our bold Mission: “Disrupt Amazon”. Creating an alternative to an industry juggernaut who had just entered the local market, seemed like a great way to stand up for small businesses in Australia.
When I began to see my work as less about my career, and more about doing something I believed would make a positive impact, I began to grow as a leader. And the more I spoke about it to people in the company, I found that our workforce began to rise to the challenge - our growth became part of their story.
What it is like for your workforce
Why did this make such a difference for the workforce? We already had an amazing culture and high employee engagement - however in today's world this is a baseline expectation for a high performing business. What was missing was a more authentic and deeper connection to why the company existed, and how that would guide our actions.
We as humans seek meaning in our life pursuits, and we want to feel that our skills and talents are contributing to the greater good.
We as humans seek meaning in our life pursuits, and we want to feel that our skills and talents are contributing to the greater good. A large majority of our time and professional identity is tied up in our work - and hence it matters who we work for, and whether we can take pride in the organisation and its goals. Purpose, along with mastery and autonomy, are understood to be key ingredients for intrinsic motivation, as described by Dan Pink in his book Drive.
Likewise, purpose as a guiding force has the effect of ‘increasing the gradient’ along which we operate towards the state of Flow - helping to propel us to tackle greater challenges, and ever increasing our skills. We found this to be one of the defining characteristics of the culture at Fulfilio, where our workforce was able to continually create extraordinary results, and at the same time undergo a large degree of personal and professional growth. Virtually every one that joined the company was able to ‘level up’ in their skills and capabilities.
I also believe in the power of collective intention to positively shape reality. There is something about focusing one's mind on the future - through a vision for how the world will be different from what it is today - it creates a pull towards a new reality. This can be one of the most profound practices as a human - to move towards our dreams, and see them become a reality. By creating this opportunity for shared creation in business, we are enabling not only great places of work, but also people to lead more fulfilling lives.
How to create a purpose driven strategy
It is important to call out that a ‘purpose driven strategy’ is more than just a motherhood statement developed as a public relations exercise, invoked only in marketing campaigns or an annual report. If there is no clear connection between your purpose and your strategy, then its value is likely to fade faster than the posters on the wall.
If there is no clear connection between your purpose and your strategy, then its value is likely to fade faster than the posters on the wall
A purpose driven strategy, however, should truly sit at the core of your organisation, shaping not only ‘the why’, but also ‘the what’ and ‘the how’. Professor of Strategy and General Management Thomas W. Malnight from IMD Business School, asks businesses to answer five questions:
Does purpose contribute to increasing your company’s growth and profitability, today?
Does purpose significantly influence your strategic decisions and investment choices?
Does purpose shape your core value proposition?
Does purpose affect building and managing your organisational capabilities?
Is purpose on the agenda of your leadership team every time you meet?
I will be the first to admit that to create strategy with such an enduring influence in a business can take considerable time and effort, and there is no simple input/output formula. What I do know is that you need to talk about purpose all the time - in your leadership team meetings, company updates, new starter onboarding - giving everyone the opportunity to internalise and embrace. Jesse Stratford, Product Director at one of Australia’s leading technology companies SEEK, goes even so far as to ask each team at their fortnightly showcase session “how does this feature contribute to our purpose?”
The approach to develop your purpose will vary depending on the size, complexity, context and competitive pressures of your business. To help navigate this, Greg Sutherland, Strategy and Marketing executive and co-founder of the strategy and culture design firm ByMany, has developed a set of initial guiding questions:
Firstly you should seek to understand where you have been: the history of your organisation and why it was established, and the stories that best reflect your business at its best
Secondly, you need to understand where you are going, the vision for the future: what is your organisation being called to become for its customers and society, and why is your organisation the one to meet that calling?
With a clear vision, and statement of purpose, it is then possible to create the remaining guiding architecture for a multi-period strategy, namely your “Strategy Horizons” - the major phases over multiple years towards your vision, and your “Strategic Priorities” - what you need to focus on to be successful in the current horizon. It is within these strategic priorities that you will bring forth your purpose aligned initiatives - where your intent can begin to take the form of action. Management consulting firm McKinsey, frames purpose aligned initiatives in three categories:
The near term win-wins, delivering immediate societal and financial benefits
The near term wins for society, but take longer to yield financial benefits
The ‘moon shot’ bets whose potential to society is enormous but, for your investors and shareholders, the upside is perhaps unclear
It is recommended to first build momentum in category 1 and 2, before taking on the moon-shots - where the results are the most meaningful and generate the most internal satisfaction.
Why Purpose driven strategy is even more important today
Since first having the opportunity to create a purpose driven strategy at Fulfilio, I am coming to perceive a wider need in society and the world today. In recent decades we have seen many trends in the orientation of businesses and their corporate narratives - I personally have spent many years of my career, helping organisations become more ‘customer focused’, ‘values led’ or ‘people centric’.
However, we now need to move beyond the role of organisations as good corporate citizens, to an era when businesses are active in positively shaping their environment. Why? Because the world we live in is facing so many large scale challenges that are beyond the capacity of any single individual, organisation, or government to solve.
We now need to move beyond the role of organisations as good corporate citizens, to an era when businesses are active in positively shaping their environment
As I write this the world is in throws of the COVID19 Pandemic, watching day-by-day the responses of governments around the world as they attempt to limit the economic and social damage that will reverberate for the rest of the decade. Within all the difficulties faced, it has been inspiring to witness the outpouring of support from businesses, large and small, to try and do their bit to help their customers and the community in a time of need.
What this has shown me, is the capacity of leaders to adapt their business models and offering to fulfil a greater purpose than just profits. This was not necessarily the result of a long purpose driven strategy process, it was just the right thing to do in the current environment. While the intentions of these businesses may be noble (in most cases), I don’t doubt for a moment that they will fare better than their peers when the world settles to a new normal.
A good example of this, is the Australian Banking sector - just 12 months ago, the industry was mired in controversy after a series of integrity scandals. Whereas today, after offering mortgage payment relief to homeowners, the 4 big banks have transformed their reputation back to the core reason they were founded - to help Australians with their banking needs to support the stability of the economy and our society. I can imagine that everyone working within these institutions must have felt a great sense of purpose and pride in their capacity to do good.
When I reflect on my own journey at Fulfilio, I realise that leading with purpose helped me to evolve as a person. I may not have been successful in leading the business to fulfil its stated mission to Disrupt Amazon - the business was eventually brought into the fold of its corporate owner, Australia Post. I did however come to understand how strategy lives in the hearts and minds of people who are executing day to day, and that my role as a leader is to create an alchemy from the shared interests of our people, our investors, and society.
I now hope that leaders from all types of business take the opportunity that this time presents, to understand the positive role their organisation can play in the world. While this period will soon become a part of history, I hope it serves as a turning point to create a new trajectory for businesses that put purpose at the core of their strategy.
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If you or anyone you know has had experience developing, or working within, a business with a purpose driven strategy, then please get in touch.
