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Daily Nuggets: A For Impact Blog

Purpose Clarity


This month’s print edition of HBR makes mention of a new study supporting ‘the purpose-profit’ connection (p32).  The study looks at the relationship between strong purpose and public company financial performance. I believe the insights apply to all organizations – That is, any organization with a strong purpose will see increased performance.

The study finds there is a strong link between PURPOSE and PERFORMANCE (or, in my adjusted language, IMPACT). Researchers make a distinction in two types of high purpose organizations. The first is what it calls ‘high camaraderie’ where everyone simply has a sense that they are doing something great, TOGETHER. The second type of purpose is ‘high clarity’ from management. This is noted as the type where managers excel at translating purpose into action.

The statistically significant performance bump was only found with organizations that have ‘purpose clarity.’

As a leader, think not just about PURPOSE, but ‘PURPOSE CLARITY.’  To help you with this, I would bridge some of the findings of the research with some of the For Impact teaching. Think about PURPOSE as an anchor for your STORY. And, by story, I don’t mean a narrative with a beginning-middle-end. I mean how you FRAME the organization.

A GREAT STORY…

  • Is anchored in hope-filled purpose (Start with WHY!)
  • Simplifies WHAT you do.
  • Serves as a litmus for action.

Some of the writing in the research study further supports thinking about placing PURPOSE inside of STORY.  “The company’s primary purpose – the real one, which isn’t necessarily the one written in the official documents or etched in the wall plaques – [that] guides its actions and decisions.”

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Gartenberg, Claudine Madras and Prat, Andrea and Serafeim, George, Corporate Purpose and Financial Performance (June 30, 2016). Columbia Business School Research Paper No. 16-69. Available at SSRN: https://ssrn.com/abstract=2840005