Purpose+ Internal Research Project

NON-­CONFIDENTIAL  AND  NON-­PROPRIETARY,  ENTIRELY  SHAREABLEPurpose+,  Amstel  95,  Amsterdam,  The  Netherlands

Purpose: The Business Case

More and more countries are measuring ‘purpose metrics next to GDP, and they are supported by the UN’s Millennial Goals

Source:  The  Millennium   Development  Goals  Report,  2015  (UN)

19

62

30

126

48

1913

2

64

79

0

10

20

30

40

50

60

70

80

90

2003 2006 2013

0  to  5 6  to  10 11  to  15 16  to  22

Number  of  indicator  series  with  at  least  two  data  points

Proportion of countries and territories in the deveoping regions with at least two data points for 22 selected MDG indicators

The assessment of purpose on country level has proved fruitful; with many achievements in the past ~15 years (1/2)

Millennial  goal Results  so  far

1.  Eradicate  extreme  poverty  and  hunger1A.  Halve  the  proportion  of  people  whose  income  is  <1,25  a  day.1B.  Achieve  full  and  productive  employment  and  decent  work  for  all,   including   women  and  young  people.1C.  Halve  the  proportion  of  people  who  suffer  from  hunger.

2.  Achieve  universal  primary  education2A.  Ensure  that  children  everywhere,  boys  and  girls  alike,  will  be  able  to  complete  a  full  course  of  primary  schooling

3.  Promote  gender  equality  and  empower  women3A.  Eliminate   gender  disparity  in  primary  and  secondary  education,  preferably  by  2005,  and  in  all   levels  of  eductionno  later  than  2015

4.  Reduce  child  mortality4A.  Reduce  the  under  5  mortality  rate  by  two  thirds.

5.  Improve  maternal  health5A.  Reduce  the  maternal  mortality  ratio  by  three  quarters.

6.  Combat  HIV/AIDS,  malaria  and  other  diseases6A.  Have  halted  by  2015  and  begun  to  reverse  the  spread  of  HIV/AIDS

6B.  Achieve,  by  2010,  universal  access  to  treatment  for  HIV/AIDS   for  all   those  who  need  it.

6C.  Have  halted  by  2015  and  begun  to  reverse  the  incidence  of  malaria  and  other  major  diseases.

Source:  The  Millennium   Development  Goals  Report,  2015  (UN),  Purpose+  database

Met/on  targetMixedOff  track

Millennial  goal Results  so  far

7.  Ensure  environmental  sustainability7A.  Integrate  the  principles  of  sustainable  development  into  country  policies  and  programmes and  reverse  the  loss  of  environmental  resources7B.  Reduce  biodiversity  loss,  achieving,  by  2010,  a  significant  reduction  in  the  rate  of  loss7C.  Halve  the  proportion  of  the  population  without  sustainable  access  to  safe  drinking  water  and  basic  sanitation

8.  Develop  a  global  partnership  for  development8A.  Develop  further  an  open,  rule-­based,  predictable,  non-­discriminatory  trading  and  financial   system

Source:  The  Millennium   Development  Goals  Report,  2015  (UN),  Purpose+  database

8B.  Address  the  special  needs  of  the  least  developed  countries8C.  Address  the  special  needs  of  landlocked  countries  and  small   island  developing  states

7D.  By  2020,  to  have  achieved  a  significant   improvement  in  the  lives  of  at   least  100  million   slum  dwellers

8D.  Deal  comprehensively  with  the  debt  problems  of  developing   countries8E.  In  cooperation  with  pharmaceutical  companies,  provide  access  to  affordable  essential  drugs  in  developing  countries8F.  In  cooperation  with  the  private  sector,  make  available   the  benefits  of  new  technologies,  especially  information  and  communications

Met/on  targetMixedOff  track

The assessment of purpose on country level has proved fruitful; with many achievements in the past ~15 years (2/2)

Organisations of the future will intend to be antifragile, purpose centric structures that will have also use additional metrics of success

Source: Jonker et al., 2016; Purpose+ team brainstorm; HBR (2015), The Business Case for Purpose

• Singular  metric  of  business  success in  financial  parameters  (profit,  revenues).  Short  term  cost/benefit  analysis  crucial.

• Linear  realisation  of  the  value  proposition,  distribution  and  use.  Market  price.

• Possession  is  everything.  Quarterly  profits  driver.  Protectionism  normal  in  order  to  ensure  long  term  income.

• Organisation  charts  as  the  way  to  structure  and  divide  work  amongst  people.

• Robust  yet  Fragile  (RYF).

• Multiple  metrics  of  successwith  Purpose+Profit*  logic  embedded  in  all  dashboards.  Long  term  legacy  as  key  driver.

• Circular  realisation  of  both  material  and  social  value.  ‘Real  price’.

• Access  trumps  possession.  Shareholders  who  care  for  long  term  impact  Purpose+Profit.  Sharing  is  normal  to  ensure  long  term  income.

• Networks  bound   by  purpose  that  need  to  be  orchestrated.  

• Antifragile.

Success

Economy

Ownership

Organisation

Traditional  ‘Profit’  organisation Future  ‘Purpose+Profit’  organisation

* 81-90% of executives – depending on company category – strongly agrees with the statement ‘companies perform best over time if purpose goes beyond profit’.

Executives belief that having a sense of purpose is critical to business success and employee satisfaction

90% 91% 89%

79%

94%

65%61%

38%

19%

63%

'Over  the  past  year,  my  company  has  performed  

well  financially'

'My  company  has  a  dinstinct  brand  that  stands  out  among  competitors'

'My  company  has  a  clearly  defined  culture  and  values/beliefs  system'

'My  company  has  strong  employee  satisfaction'

'My  company  has  strong  customer  satisfaction'

'My  company  has  a  strong  sense  of  purpose' 'My  company  has  a  weak  sense  of  purpose'

Source: Deloitte, Culture of purpose: a business imperative, 2013 core beliefs and culture survey. Ssurveyconducted in US with 1310 adults (298 executives)

Revenue growth in the past corroborates this belief: companies with purpose had an edge on revenues in the past three years

15%19%

42%

25%29%

16%

58%

51%

42%

0%

10%

20%

30%

40%

50%

60%

70%

Prioritizers* Developers* Laggards*

Flat/decline 0-­10%  growth >10%  growth

*  Prioritizers:  purpose  clearly  articulated  and  understood.  Developers:  purpose  understood  by  some  areas  better  than  others.  Laggards:  purpose  not  well  understood  or  communicated.    Source:  HBR (2015),  The  Business  Case  for  Purpose,  Survey  conducted  on  431  executives  globally

Purpose-driven companies are quicker on their feet and better able to renew themselves

Source:  HBR (2015),  The  Business  Case  for  Purpose,  Survey  conducted  on  431  executives  globally

*  Prioritizers:  purpose  clearly  articulated  and  understood.  Developers:  purpose  understood  by  some  areas  better  than  others.  Laggards:  purpose  not  well  understood  or  communicated.    

66%

58%

57%

56%

54%

52%

49%

44%

45%

37%

36%

36%

33%

26%

48%

37%

40%

33%

58%

16%

43%

Expanded  geographically

Changed  top  leadership

Been  part  of  acquisition/merger

Launced  new  products

Expanded  into  new  market  segments  

Engaged  in  major  transformation  initiative  (business  model/operations)

Launched  (entered  into  business)

Prioritizers Developers Laggards

Percentage who indicated how successful their organisation was in undertaking the following initiatives (10-point scale, 8-10 scores shown)

But purpose is clearly articulated and understood in just ~4 out of 10 organisations at the moment…

39%

48%

13%

Prioritizers:  purpose  clearly  articulated  and  understood

Developers:  purpose  understood  by  some  areas  better  than  others

Laggards:  purpose  not  well  understood  or  communicated

Source:  HBR (2015),  The  Business  Case  for  Purpose,  Survey  conducted  on  431  executives  globally

…there is a huge gap between theory and reality in organisations…

89%

85%

84%

84%

81%

80%

50%

46%

41%

38%

37%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

'An  organisation  with  shared  purpose  will  have  employee  satisfaction'

'I'm  more  likely  to  recommend  a  company  with  strong  purpose  to  others'

'Our  business  transformation  efforts  will  have  greater  success  if  integrated  with  purpose'

'An  organisation  that  has  shared  purpose  will  be  more  successful  in  transformation  efforts'

'Purpose-­driven  firms  deliver  higher-­quality  products/services'

'An  organisation  with  share  purpose  will  have  greater  customer  loyalty'

'Our  organisations's  strategy  is  reflective  of  our  sense  of  purpose'

'My  organisation  has  a  strong  shared  sense  of  purpose'

'There  is  a  disconnect  between  our  senior  executives  and  our  employees  over  purpose'

'Our  staff  have  clear  understanding  of  organisational  purpose  and  commitment  to  core  values/beliefs'

'Our  business  model  and  operations  are  well-­aligned  with  our  purpose'

Theory

Reality

Source:  HBR (2015),  The  Business  Case  for  Purpose,  Survey  conducted  on  431  executives  globally

…and both executives and employees feel that they are not doing enough to create meaningful impact

Source: Deloitte, Culture of purpose: a business imperative, 2013 core beliefs and culture survey

68%

35%

66%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Strong/somewhat  agree Strong/somewhat  disagree/not  sure

Executives

Employees

‘Businesses do not do enough to create a sense of purpose and deliver meaningful impact’

Survey conducted in US, 1310 adults (298 executives)

Purpose+ helps organisations become Purpose+Profit organisations

Purpose*

Profit*

P+P  OrganisationCash  cow

Irrelevant Foundation

Long  term  positive  impactLong  term  profitability  Long  term  sustainability

Short  termismNo  societal  valueNot  sustainable

Not  profitableNot  purposefulNot  sustainable

Value  add  for  societyFunding  needed  to  surviveDifficult  to  sustain

* Both are composite KPIs, see the Purpose+ Database for possible sub-dimensions

More information:hello@purposeplus.com