The future is purpose-driven organizations. The workforce is demanding it, consumers are demanding it. Yet purpose-driven organizations operate on a spectrum, from highly purpose-driven entities like Patagonia to purely profit-oriented enterprises in industries such as real estate, gambling, oil, and fashion. What are the different levels of Purpose-Driven Organizations?
Level 1: Action oriented
At this foundational level, the dominant mindset is action-oriented, viewing the organization merely as a cash-generating machine. Examples include figures in “Dubai Bling” or “Wolf of Wall Street” types in real estate and finance. Leaders and organizations at this level are trapped in automatic behavior, with higher levels of intelligence absent. There is no focus on strengthening organizational or personal capabilities, no overarching purpose, and no consideration for contributing to a better world for all stakeholders.
Level 2: Capability building
At this higher level, the focus shifts to building organizational strength and capabilities. The goal is to be effective in delivering products, services, and developing people. There is investment in company development and talent, focusing on making employees strong and effective. Strategies and plans are executed to attain goals, but a genuine purpose remains absent.
Level 3: Purpose-Driven Organizations
With a strong foundation, companies at this level begin to feel a desire to contribute beyond immediate concerns. Questions about giving back and organizational purpose start to arise. Initial signs of purpose become apparent, making it a topic on the C-level agenda. The organization begins to formalize its purpose, potentially linking it to its core identity, entering the “compass phase” where clarity of purpose emerges, but internal alignment is still developing.
Level 4: High Purpose-Driven Organizations
At this highest level, the purpose compass is fully integrated into the organization, similar to companies like Patagonia or initiatives led by figures like David Attenborough. The organization focuses on broad challenges, including stakeholder value, and aligns these with its core strengths. Unity is achieved, with leaders, teams, and individuals all having a clear purpose that interconnects like a puzzle. The organization operates at a high level, continually renewing and elevating its purpose. This results in greater engagement, creativity, and unity, accelerating value creation and decision-making.