Why has the “purpose-driven-everything” become so popular?

The idea that an organization should have a reason for being other than profit has a long history. Recently, however, the “purpose-driven-everything” has become so popular that the trend watching experts call it the “the trend of all trends” (TrendWatching). It is most frequently used in relation to leadership (purposeful leadership), organizational culture (purpose-driven culture) and strategy (purposeful growth). 

The business case for purpose has been clear and strong for a few years already. Purpose-driven companies make more money, have more loyal customers, more engaged employees, are better at innovation, customer service and competitive advantage. In fact, the business case is so convincing that sadly, many companies focussed more on touting the purpose on their website’s mission statement, rather than actually engaging in activities that make the world a better place. The push however came from elsewhere. Employees, customers, and investors became more selective with where to put their resources (either time, loyalty or money) and gave preference to businesses that actually “walk the talk”. 

Why has purpose become so popular? 

Humanistic psychologists believe that people’s search for purpose begins as a result of their existential crisis. An existential crisis is usually provoked by a significant event, e.g., a major trauma, life threatening disease, loss of a loved one or a divorce.  

In a way, the situation created by COVID-19 has caused an unprecedently universal existential crisis, and we know why. In his book “Existential Psychotherapy” Irvin Yalom wrote that there are 4 ultimate fears or concerns rooted in the existence of any individual. According to Yalom, we are all most afraid of death, freedom, isolation, and meaninglessness.  

-        The fear of Death represents the fear of ceasing to exist and be forgotten by everyone who knew us. The terror of death is of such a magnitude that a considerable portion of our life’s energy is consumed in the denial of death. 
-        The fear of Freedom is closely linked with the fear of the responsibility that comes with assuming complete authorship of one’s own life. Responsibility for own choices is accompanied by the need to accept the consequences of those choices, and often it requires accepting the consequence of a lack of choices, living one’s life on autopilot. 
-        The fear of Isolation is related to fear of separation from others, from oneself and/or the world. This concerns the physical isolation but most importantly, it’s about the moral aloneness. Many people dread the idea that there may be moments when no one in the entire world is thinking of them. 
-        The fear of Meaninglessness is a major fear of not finding coherent answers to the question “what sense does my life make?” If there is no acceptable answer, the lack of meaning causes hopelessness, psychological distress, and a disruption of personal identity. 

A global pandemic is certainly a huge threat to the life and wellbeing of the humanity. The theoretical terminality of life suddenly became all too real making people wonder – did I live, did I love, did I matter? It touches upon all 4 ultimate concerns of human beings: the virus is deadly, and we don’t understand well why some people die of the disease despite being young and seemingly healthy. Forced into physical isolation people were made to question the real state of the moral connectedness they have with those around them. More than ever, they realized that there might be no better opportunity to exercise free will and change the things they do not like. More than ever have they started to look for a plausible explanation of the meaning of their existence. As most of us spend our largest amount of time working, no wonder that all these effects spilled to our professional lives. Why do I work? Do I work for the right employer? Am I doing the things I enjoy? As a result, we see the by-product of pandemic’s impact on our professional lives – the phenomenon known as the “Great Resignation” when millions have reconsidered their choices and decided to quit their jobs.  

It became insufficient for the employer to simply pay salaries and treat their employees nicely. In search for an antidote to their existential crisis, people started expecting much more from their employer: 
-        Autonomy and flexibility to address the need for freedom
-        A strong sense of belonging nurtured via organizational culture to decrease the feeling of isolation 
-        An understanding of how what they do at work matters (to the organization, the society, the world) in case death is closer than we hoped for 
-        A collective meaning, an inspiring purpose of their employer that serves as a guiding light through uncertain times and give meaning to their life   

It looks like this is not going to go away once we (hopefully) overcome the pandemic. The younger generations preparing to enter the workforce, Gen Zs, claim they are willing to work for a purpose-driven company for a 20% lower salary, and ready to spend 48% more for products from a purpose-driven business (according to a report from Cubist Martini).

The existential crisis of organisations 

It is not only thorough a bottom-up push that were the organisations forced to develop a purpose-centric rhetoric. Organisations as social entities underwent an existential crisis of their own. Global pandemic pushed companies to work under conditions of extreme uncertainty. Will we as an organisation survive? How do we operate when isolated from our customers? How do we maintain a positive culture when people work online? What is our reason for being beyond shareholder value creation? A search for these answers transformed organisations into meaning-seeking creatures, re-assessing priorities and hopefully made them more compassionate and more human-oriented than ever before. It could be that the crisis will make sure that only the organizations making “better” choices survive. 

It’s not for nothing that the Chinese pictogram for “crisis” is a combination of 2 symbols – danger and opportunity.