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The importance of the sense of company purpose – London Business School BSR
Successful companies define their purpose in 4 different ways. But does this effort of defining a purpose translate in better financial performance? Also, do employees generally engage with a company's purpose?
Successful companies define their purpose in 4 different ways. But does this effort of defining a purpose translate in better financial performance? Also, do employees generally engage with a company's purpose?
2.
Purpose, defined by Douglas Ready
and Emily Stecker Truelove is
“the company’s reason for being;
why it exists; its core mission as an
enterprise”.
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3.
Nikos Mourkogiannis, author of
Purpose: The Starting Point of
Great Companies says
successful companies define
purpose in one of four ways.
1 2 3 4
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4.
Discovery - This type of purpose involves a love of the
1 new and innovative, and it animates many
technological businesses. Seeking the new does not
mean constantly changing course.
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5.
Excellence - Excellent businesses prefer to turn away
2 customers than compromise their quality standards.
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6.
Heroism - Think of Henry Ford’s creation of his world-
3 changing motor company or Bill Gates’ Microsoft.
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7.
Altruism - This purpose could take the form of
4 personal service beyond that normally expected,
delivering products at affordable prices, or using
technology and ideas to improve lives.
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9.
A strong, strategically coherent
and well communicated corporate
purpose is associated with up to
17% better financial performance.
IMD/Burson Marsteller Corporate Purpose Impact Study 2010
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10.
Only 10% of managers take purposeful
action — a powerful combination of
energy and focus. Meanwhile, 30% of
managers procrastinate, 20% show
detached behaviour and 40% exhibit
distracted behaviour.
Sumantra Ghoshal and Heike Bruch
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11.
“Management was, is, and always
will be the same thing: the art of
getting things done.”
Bob Eccles and Nitin Nohria, Beyond the Hype.
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12.
Only 40% of employees understand
their organisation’s strategy.
Accenture High Performance Workplace Study
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13.
88% of highly engaged employees
believe they can positively impact
the quality of their organisation’s
products; only 38% of disengaged
employees think so.
Towers Perrin 2008
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14.
“You cannot foster true innovation
without engaged employees.”
Julian Birkinshaw, MLab and London Business School
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15.
Only 4% of UK workers exhibit the
highest level of engagement with
their work.
Corporate Leadership Council
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16.
“The purpose of business is to
create a customer.”
Peter Drucker
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17.
40% of a company’s reputation is
determined by its purpose and
60% by performance.
Burson Marsteller/Penn, Schoen & Berland, 2008
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18.
This report was part of Business Strategy Review,
Volume 22 – Issue 3 2011
Visit our website www.london.edu/bsr
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