It turns out in a growing number of industries, purpose has a purpose.
According to a new Korn Ferry study, consumer companies that focused their employees on the organization’s purpose boasted annual growth rates that were nearly triple the annual rate for the whole sector. And the benefits go beyond financial. The study also found that having an authentic purpose can help recruit and retain talent, win over customers, and have positive impacts on broader society.
The study, called “People on a mission,” examined a broad set of purpose-driven organizations, including interviews with 30 founders, CEOs, and senior executives at consumer companies with visible and authentic purposes, engaged employees, customer-oriented cultures, and strong financial results. “We have found that organizations that take the challenging steps to define their core purpose and values, and integrate these throughout their operations—beyond slogans or advertising gimmicks—see not only strong bottom-line results, they also find this approach transforms all aspects of their business,” said Elaine Dinos, principal of Korn Ferry’s Global Consumer Market practice. “When an organization has a clear purpose, it unleashes the power and drive of the entire workforce, harnessing and focusing that combined effort in one aligned direction.” Indeed, the study found that companies with the proper focus posted compounded annual growth rates of 9.85% compared to a 2.4% for the whole S&P 500 Consumer Sector.