Our last article, "From Purpose to Profit" (CRM, January 2015), shared that many of the world's most admired companies achieve sustainable success by galvanizing and activating stakeholders around a purpose statement. Purpose activation leads to inspired leaders, strong culture, trusting and engaged employees, customer loyalty, and high margins.
In this article, we discuss the steps a company can take to activate a purpose and unlock the secrets of purpose-led success. The process may be simple to understand, yet takes dedication and long-term commitment to perfect. Here's how it works:
1. Activating purpose-led leadership behavior means that every decision a company makes is through the lens of whether that decision aligns with the aspiration of the purpose.
2. Purpose-led leadership behavior creates a values-based culture, earning employee trust and driving engagement and innovation.
3. Engaged, innovative employees deliver positive customer, partner, and supplier interactions and experiences.
4. Over time, these experiences become trusted relationships, increasing loyalty and advocacy and leading to financial success.
5. The final step is reinvesting purpose-driven profit into continuing activation of the company's purpose.
Activating Purpose Leads to Trust, Overcomes Obstacles
Activating a purpose creates a values-based culture that accelerates employee trust and ignites employee passion. This results in empowered employees who are able, on their own, to overcome such common obstacles as unsustainable results, declining margins, poor service quality, project delays, stagnant growth, lagging JD Power progress, and declining employee engagement.
Why is it critical to start with employees? Picture this scenario:
- A company spends $500,000 to develop and communicate a new purpose to customers and suppliers.
- Company leadership announces the purpose to employees, yet fails to teach employees how it should affect their behavior and interactions with each other and customers.
- A customer who has seen the new purpose calls the contact center and speaks to an employee.
- How can the employee's response reflect the company purpose if employees don't understand how it should affect their behavior? How will the customer react if the employee's actions are at odds with the new purpose? What impact will this have on the brand?
Three Steps to Successfully Activating a Purpose
This situation makes it easy to understand the number-one rule of purpose activation: Start with employees, and only activate purpose externally when customer-facing employees are fully trained.
The following steps can ensure that employees are ready to ignite and sustain a successful purpose-led organization:
1. Demonstrate leadership behavior to drive culture. Your leadership team must live the company's values every day. Create a "circle of safety" for all your employees, in which they know that their commitment to the company's purpose is supported by leadership. Make sure rewards and incentives align with and reinforce your purpose.
2. Activate employees. Consistent communication is key to activation. Changing employee behavior takes time and repetition. A recent study examined how long it took to learn new habits. The average was 66 days, but individuals' adoption times varied from 18 days to 245 days, depending on temperament and the complexity of task. Leave time for employees to acclimate before going public.
3. Constantly re-evaluate. Listen and respond to internal and external feedback. A great example is how Starbucks reacted to a newspaper report about its scheduling practices. The company had implemented a software program designed to optimize how it scheduled employee hours. However, the software began wreaking havoc on some employees' lives by giving only a few days' notice of working hours, sending workers home early when sales were slow, and shifting hours significantly from week to week. When leadership learned about the glitch through an article in The New York Times, they responded immediately with an open letter promising to revise the company's scheduling practices.
An important lesson is this: While your competition can copy your products or match your price, it's impossible to copy the trusted employee relationships that a purpose- and values-driven culture enables.
Woody Driggs is the global advisory customer leader and a principal in Ernst & Young LLP's Advisory Services Performance Improvement practice. He is based in Washington, DC. Jeffrey Stier is a principal in the Global Customer practice of Ernst & Young LLP. He is based in New York. The views expressed herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP.