Purpose: The Anchor of the Organization

“Every aspect of what we do is driven by a sense of purpose,” Indra Nooyi, chairman and CEO of PepsiCo, once told me.

Purpose is the “why” behind every great organization, the reason for its existence, far beyond making money or winning the game. Great leadership, too, must start with the “why.”

PepsiCo embraces purpose—its “why”—holistically; it is the basis of everything it does. From her earliest days as CEO, Nooyi has defined “Performance with Purpose” as her mission and operating strategy for the company. This includes a multipart approach that lays out country-specific performance targets and detailed goals to benefit society, the environment and the work force. From more efficient consumption of water and electricity to sustainable farming practices and expanding affordable nutritional products for lower-income consumers, Performance with Purpose touches every aspect of PepsiCo’s business.

As the PepsiCo example shows, purpose must be omnipresent—on the walls and in the halls—and cast a long shadow over the organization. Purpose becomes the bridge from what we’ve been to what we will be.

Over the years, however, I’ve seen leaders jump immediately to the “how” and forget all about the “why.” Obviously, leaders must set the goals and articulate the vision, as well as the strategy, which come together in the “how.” Leaders also must know the “who”—the individuals who are the heart and soul (and eyes, ears, feet and hands) of the organization.

The real question, though, is “why?”—the answer to which articulates the purpose.

Purpose anchors the organization, giving workers a sense of “why” they are doing what they do. “Why” transforms self-interest to shared interest.

With a sense of purpose, team members become part of something bigger than themselves. They know that what they do matters to someone else, and that they are contributing to the greater good of the organization and what it stands for. The leader’s job is to make sure everyone at every level understands the purpose.

Purpose is never about the leader, but it does start with the leader. No matter if you are the CEO of a global company or the head of the local PTA, as the leader you must embody the purpose of the organization. When people look at you, they need to see the purpose reflected in your eyes, words and actions. Purpose is no less than the basis of everything you do. It is the North Star, guiding you and everyone else in the organization.

Defining the Purpose

The more staffers understand the “why,” the more closely aligned they will be to the organization’s priorities. Close alignment with the mission, vision and goals is imperative for every organization, and especially large enterprises in which thousands of employees are making hundreds of decisions every day. The leader cannot possibly look over every shoulder. When employees have a strong sense of purpose, they are more likely to act in concert with the mission and objectives of the organization.

Things to Listen for...

When purpose is in place within the organization, the echo is heard everywhere:

“I understand how the work I do fits into the bigger picture.”

“I know exactly why I am here and the role I play.”

“We don’t make widgets. We improve lives.”

 However, in an organization that lacks a strong sense of purpose, the absence is palpable:

“I feel like there is a lack of coordination here. We’re all off working on our own projects.”

“It’s hard to know how my success will be measured; the goal seems to change so frequently.”

“This organization lacks clear direction, which leaves us in disconnected silos without a common goal.”

With purpose as the rallying cry, people move beyond their separateness and begin rowing in the same direction, toward the same finish line.

Ideas for Action...

Defining the “why” begins with setting a purpose. One effective way to start is with a team charter that crystallizes the organization’s purpose for those on the inside and on the outside. The best charters answer the questions: Who are we? Why are we here? What is our unique contribution? A charter may stand for many years, or it may be revised and touched up every quarter. Either way, it is a touchstone for employees to better understand the team’s focus and how it serves internal and external customers.

Purpose also establishes the organization’s place in the world with a well-defined and widely understood public image. How customers experience the company, its products and its brand are closely linked with how the organization defines and refines its purpose.

As leaders carry out the responsibility to communicate the purpose, they must first understand the audience: who are they talking to and how do they fit in the bigger picture? Every member of the team, from the newest entry-level employee to senior leaders, must see themselves in the context of the whole.

Leaders who know how to motivate their teams with purpose also understand that different participants are moved and inspired by different things. For example, some are energized by innovation; others feel strongly about social responsibility. Highly effective leaders link what their followers value to the vision and purpose of the organization. Then people are working for their most compelling self-interests!

Once defined and communicated, purpose cascades throughout the organization. Tangible and accessible, purpose changes how staff members work, interact with each other and serve customers. In short, the company’s purpose becomes everyone’s purpose—a smart, scalable model for leadership.

At the same time, leaders must be specific about the goals and tactics that need to be carried out, and in what time frame. Without concrete directions and expectations, purpose may never be fully actualized.

When truly effective, purpose becomes a living, breathing force within the organization—creating alignment, catalyzing change. As Nietzsche wrote, “He who has a why to live can bear with almost any how.” In a purpose-driven organization, leaders are truly skilled in making the why real.