The Missing Link Between Purpose and Performance

Business leaders use corporate purpose to define the strategic direction of a company and imbue the collective efforts of its employees with a meaning beyond simply increasing shareholder value. For example, Veolia, a large global service provider in energy, waste, and water management, pledges “ecological transformation, that is our purpose,” while toolmaker Stanley Black & Decker declares that it is “for those who make the world.” Such purpose statements aim to guide the direction of a company’s growth and inspire commitment from its employees. However, when the leadership team of an organization articulates a corporate purpose and seeks to incorporate it into the goals and activities of the organization, it tends to make managers’ role more complex.

Much has been written on aligning operational goals with purpose-driven objectives and on incorporating corporate purpose at various levels of the organization. Still, it is ultimately team leaders at various levels of the organization who must translate holistic aspirations into day-to-day operations, often acting as both ambassadors of change and enforcers of traditional corporate demands. Since they are tasked with implementing the purpose-oriented visions and business strategies of senior executives while addressing the practical concerns of employees and meeting operational objectives, team leaders can act as critical intermediaries, responsible for resolving the tension between immediate performance metrics and longer-term purpose-driven initiatives.

To better understand how team leaders navigate this challenge, we conducted research into how they communicate corporate purpose-driven objectives and engage their team members in meeting them. We use the term purpose dialogue to describe regular, deliberate discussions leaders have with their teams about corporate purpose. Leaders who have those conversations, maintain a good relationship with each member of their team, and give them autonomy in carrying out their tasks achieve a significant boost in individual employee commitment to their team, roles, and responsibilities. For leaders striving to chart a purpose-driven strategic direction for their company and have their workforce pulling in that same direction, employee commitment can be a major determinant of success.

The Power of Purpose Dialogue

The connection between team dialogue on corporate purpose and employee commitment is profound yet frequently underestimated in both academic literature and management practices. Using Korn Ferry Institute data, our study in the journal Long Range Planning included 57,000 employees across 469 companies.