ENTREPRENEURSHIP in today’s disruptive world is an especially tough endeavour that demands foresight, courage and conviction. Most entrepreneurs start from the premise of wanting to do something better.

Having run the EY Entrepreneur Of The Year (EOY) awards for over 20 years, it is clear that many leading entrepreneurs are not just rising to the challenges of entrepreneurship but also embodying a sense of purpose beyond demonstrating business profitability.

From uplifting traditional food and beverage operators, to improving accessibility to health care and financial services, to challenging conventional perceptions of the waste management industry, these are just some examples of how this year’s EOY winners are inspiring with their pursuit of purposeful growth.

To be clear, purpose-driven entrepreneurship is not about building not-for-profit enterprises. In fact, these entrepreneurs are looking to build a profitable business, centred on a clear purpose that is authentic and consistent with business actions. In other words, their purpose is the core foundation upon which their company reputation and performance are built.

Purpose and profit not at odds

Based on EY studies, executives are saying that their pursuit of purpose delivers the greatest value in areas that arguably are most critical to them. For example, those in the life sciences and diversified industrial products industries say that their purpose drives value by helping to develop innovative new products. In oil and gas and mining and metals companies, their purpose provides most value in helping them identify and reduce risks. Consumer products organisations see purpose as most fundamental in building greater customer loyalty.

Indeed, the EY Future Consumer Index shows a dramatic shift in consumer values, where people are less motivated by financial rewards and status is increasingly conferred by sustainable behaviours rather than wealth. Consumer brand preferences are now driven by an alignment of their values and the brands’ purpose – a new game-changing P, in addition to the 4Ps of product, price, place and promotion.

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Further, the Covid-19 pandemic has reinforced the importance of ESG issues. Investors are placing dual emphasis on financial and non-financial metrics, and view companies that perform well on ESG less risky and better positioned for the long term. A corporate purpose that drives and underpins ESG goals is therefore instrumental in attracting the finance, trust and confidence that are necessary to grow the business.

Transformations to be purpose-led

Business leaders are currently facing a barrage of competing pressures and undertaking transformation strategies to future-proof their business.

Based on a Harvard Business Review-EY survey, executives who treat purpose as a core driver of strategy and decision-making reported greater ability to drive successful innovation and transformational change and deliver consistent revenue growth. Fifty-three per cent of executives who felt their company has a strong sense of purpose said their organisation is successful with innovation and transformation efforts, compared with 31 per cent of those trying to articulate a sense of purpose, and 19 per cent of the companies who have not thought about it at all.

This is not unexpected. Many transformations underperform because companies fail to engage and harness the collective energy of their employees. A 2021 research by EY and the University of Oxford’s Saïd Business School identified human factors as one of the root causes of transformation failure.

And that is why purpose is so valuable. It provides strategic clarity for employees when addressing complexity and serves as a lens to view the impetus for change, putting into perspective the potential short-term pains in exchange for longer-term gains. Having a purpose also taps into intrinsic human need to be part of something greater than ourselves. It can also be the glue that integrates diverse teams in new ways, helping them to overcome distractions and detractors to reach a common goal. Beyond rallying internal teams, purpose can also be harnessed to promote and create better partnerships and alliances, where companies assess their potential for collaboration within industries and ecosystems by seeking common ground in their purposes.

Making purpose real

Building a purpose-driven company goes beyond writing a catchy statement with clever hashtags. It requires a demonstrable connection between the purpose and the company’s culture, business model and operations.

Any purpose that companies profess needs to be authentic to the business, and business leaders need to be able to articulate that purpose to customers, employees and other stakeholders in communications and more importantly, in action. In return, they can expect the reciprocation of strong stakeholder buy-in and loyal employees who are similarly motivated, invigorating the business to create long term value.

The challenge for many business leaders is not a lack of understanding of what their purpose is but rather how to ground it in reality. A purpose activation plan for business leaders should consist of the following four pillars:

1. Articulate purpose

• Define a clear purpose for your organisation, before others do it for you;

• Be ambitious and inspiring, yet reflective of what you can deliver;

• Convey your purpose in terms of the long-term value created for the people you serve; and

• Communicate success stories to key constituents.

2. Embed the pursuit of purpose

• Develop an integration plan and commit to deliver on it;

• Focus on where it matters most – at the commercial front line;

• Use purpose as a lens for making decisions; and

• Close the gap between what the company says and does.

3. Evaluate progress

• Challenge the extent to which purpose governs strategic decisions and daily actions;

• Take stock of setbacks as well as acknowledge successes; and

• Measure and reward decisions and behaviours that align to purpose.

4. Accelerate the journey

• Have senior leadership champion purpose through words and actions;

• Make purpose integral to employees’ day-to-day experiences; and

• Empower and incentivise middle managers to act in the interest of purpose

Every phase of the purpose activation journey, from leadership alignment and people activation to customer engagement and strategy, is critical and an ongoing effort. Suffice to say that when it comes to purpose, the job is never complete – and should be at the heart of any business that desires to be enduring and sustainable.

Liew Nam Soon is the Singapore and Brunei Managing Partner at Ernst & Young Solutions LLP, and EY Asean Regional Managing Partner. The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.