How can you retain and hire people who strengthen the organization at every level?
The numbers are scary: 65% of employees are looking for a new job according to PwC. McKinsey & Co. argue that nearly two-thirds say that “COVID-19 has caused them to reflect on their purpose in life. And nearly half said that they are reconsidering the kind of work they do because of the pandemic.” It´s time to act for corporations of any size.
HR leaders have to provide compelling arguments for two pressing questions at the same time – stopping the exodus and finding a way to a make hybrid work something that really works. But the buck does not stop here. If CEO´s and their boards do not finally get their act together on their company´s purpose and key strategic pillars, HR leaders are getting themselves into a vicious circle. Their success will only be short-term as new joiners will go as quickly as they came. Especially when it comes to Millennials. They are “three times more likely than others to say that they were reevaluating work” according to McKinsey.
Three questions are critical when it comes to your company´s purpose – assuming you believe your company already has got one:
- Is that purpose really a purpose? Is it grounded in an everyday reality and at the same time able to stretch to an improbable goal?
- Is the management team aligned on that purpose? Too often, purpose is treated as feelgood placebo that has no impact on everything a firm does?
- Is this purpose relevant to customers and employees? The simple way to check is to ask and see whether a) it is known and b) whether it matters?
Building a committed workforce is paramount
Commitment has a pre-requisite. You need something to commit to. In the context of work, this can mean many different things. Your manager, the CEO, the reputation of the firm, their products or services. All of these have varying shelf lives – one thing that unites successful companies is something that lasts long if managed wisely: the company´s purpose. In my view, that purpose needs to be a shared purpose. One that goes deep in meaning and deep inside the organization so that it actually impacts behaviors at every level. Once that is the case, that company has got soul. Once that is the case, you never want to lose it again as companies with soul have got thriving cultures. That matters big time. According to the O.C.Tanner Culture Index, such a culture is 13 times more likely to have highly engaged employees and an 8 times higher incidence of great work and double likelihood to have increased revenues. At the same time, employees in thriving cultures are experiencing 3 times less burn-out situations. And the companies are 3 times less likely to face lay-offs.
The reality check – do corporations walk the talk?
The numbers are compelling, yet too many leaders ignore them every day. EY´s Business Case for Purpose study reveals that 80+% of leaders believe that:
- An organization with shared purpose will have employee satisfaction (89%)
- I´m more likely to recommend a company with strong purpose (85%)
- Our business transformation efforts will have greater success if integrated with purpose (84%)
- Purpose-driven firms deliver higher-quality products/ services (81%)
- An organization with higher purpose will have greater customer loyalty (80)
Action, though, speaks louder than words. The same respondents have an honest view on their firm´s realities – the top score is only 50%:
- Our organization´s strategy is reflective of our sense of purpose (50%)
- My organization has a strong sense of purpose (46%)
- Our staff have clear understanding of organizational purpose and commitment to core values/ beliefs (38%)
- Our business model and operations are well aligned with our purpose (37%)
Time to act – building corporate soul is critical for companies to succeed
Defining the purpose and then sharing it throughout the organization is the critical first step. Not just in big letters are the corporate reception – sharing means fully embedding into each area of the business. Aligning the key strategic elements like vision, mission, values and spirit with that shared purpose then creates a shared understanding among all stakeholders. If that´s in place, shared behaviors create a momentum inside the firm that unleashes a very powerful energy that unleashes the best in every employee. What more can you wish for?
One of the companies that has done it well is LEGO. The Danish firm has defined its purpose “to make a difference in children’s lives”. Back in 2003 when LEGO was in a significant crisis, Jørgen Vig Knudstorp reinforced that notion and put the company back on track. Establishing a shared understanding and fostering a set of shared behaviors were critical to this success. The 2020 RepTrak report, A Decade of Reputation Leaders, names LEGO as one of the top 15 global companies when it comes to purpose.
So go ahead and do some soul searching:
- Is that purpose really a purpose?
If not, get your leadership team behind the task and work out a roadmap to align behind a real purpose.
- Is the management team aligned on that purpose?
Review your OKR´s to ensure that the purpose is embedded inside the organization in everything it does.
Is this purpose relevant to customers and employees?
Make sure it is credible and relevant by involving your key stakeholders before you commit to your company´s purpose – and if you already have one in place and these stakeholders cannot agree … well, then you better start the real soul-searching.
Written by Ralf Specht.
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