How to create a purpose-led strategy

In this episode of our 'Simply Sustainability' podcast, host Ruth Wilkinson is joined by Andy Brown Group Chief Sustainability Officer at Anglian Water Group, and Ed Leighton, Director of Strategy and Policy at Ofcom to chat through the intricacies of creating a purpose-led strategy.

As active members of the Purpose in Practice Community (PIPC) - a collective of senior leaders who explore innovative ways to put people and the planet at the heart of business and organizational success - Ruth, Ed and Andy discuss their involvement in the community’s collaborative ‘labs.’ These labs dive deep into key topics, offering hands-on experimentation and shared learning among changemakers.

In this podcast, the trio pull on their knowledge and experience of facilitating lab three, which focused on how to make purpose core to strategy and performance. They share the five key steps to creating a purpose-led strategy and provide practical advice to drive purpose-led change.

Listen here or read on for an edited transcript.

Ruth Wilkinson: Welcome Ed and Andy to our podcast covering the purpose in practice community lab on building strategy for purpose-led businesses. Really excited to be here today to talk about what we found and how we found it. We're going to kick off with some introductions. So I'll introduce myself. I'm Ruth. I'm one of the managing consultants at Clarasys and I lead our purpose and impact proposition.

We've been really delighted to work with Ed and Andy this year, facilitating the lab for the purpose in practice community, looking at strategy for purpose-led businesses. It was an absolute pleasure to work with you both and I'd love to invite you to introduce yourselves. Andy, take us away.

Andy Brown: Thanks, Ruth.

So I'm Andy Brown. I am the group chief sustainability officer with Anglian Water. So a big part of my role is to work with our board to help them to demonstrate that they're embedding purpose and living by it. So, yeah, it was a pleasure to be involved in lab three and really get into the nitty gritty of how you bring purpose and strategy together and really exciting to work with you, Ruth, and with Ed as well.

Ruth Wilkinson: Amazing. Thanks, Andy. And Ed, please introduce yourself.

Ed Leighton: Yeah, thanks for having me. And I'm Ed, Ed Leighton, and I'm Director of Strategy and Policy at Ofcom, the communications regulator. A big part of my job is trying to understand the way business is done and the way companies work across all of the sectors Ofcom regulates. And the way purpose is being embedded into more and more businesses in the economy has been made it an area that we really want to understand better.

What is the Purpose in Practice community?

Ruth Wilkinson: Amazing. I think we should probably start with what is the Purpose in Practice community. Some people listening might know and might have been involved and others may have never heard of it at all. So it's probably worth us giving a little summary introduction.

The Purpose in Practice community was founded a few years ago by NatWest and a Blueprint for Better Business, who are a charity who support businesses to see a different way of doing business through a purpose lens. They really focus on the mindset shift required at leadership level to do so. So they co founded this community with NatWest to bring together practitioners, particularly those looking to embed purpose in their businesses to explore some of the key challenges that exist around that. This is a completely new space and a way of doing business and so many questions are unanswered about how to actually put purpose ideology into practice. So this is really practical. It's really thoughtful. It's a space where we try to take the big knotty problems and explore them. And in our lab, we were particularly focusing on how do you take the practice and the behaviors around strategy, traditional strategy in businesses, and then think about them through a purpose lens and explore what might need to change and how that might need to happen.

Particularly, I think for our lab, we focused on having a lot of fun with it and not being too serious and enjoying bringing together a really diverse group of people who were working across a whole multitude of industries and sectors to really think about what is strategy to them and what is purpose and then what happens when the two come together.

So I want to kick off by asking what is it that brought you to this community and why were you interested in this subject area and facilitating this lab particularly? Andy, I'll come to you first.

Exploring purpose-driven strategy: How diverse perspectives shape business practices

Andy Brown: Yeah, thanks Ruth. So I haven't been involved in the community from the outset, but now I have been for the last year or so. I wish I had joined in right at the beginning.

So I got involved because as well as working for Anglian Water, I also do some work with BSI, the British Standards Institute, and have helped them to develop a new British standard, which is called PAS 808, on purpose driven organizations. And I was really interested in how do we help, or how can that framework bring purpose to life in different organizations. So yeah, joined the community, instantly thought that this is a community that we're doing things rather than just talking to each other. And I think the development of labs to test things and to come together and to share thoughts, experiences and drive things forward was that's where I think the best kind of work gets done.

So it's a real belief of mine in terms of this subject matter, bringing purpose and strategy together that, you know, if you don't do that, then you're really just paying lip service to purpose. If purpose is on the side, then, you know, you're not going to deliver any meaningful change. So I was really keen to kind of have that conversation, to explore it and to help to to kind of pull apart, do you need to change strategy in order for it to be kind of useful in delivering purpose? Or was just really good strategy all you needed as long as you connect them kind of underneath the purpose in the right kind of hierarchical structure?

Ruth Wilkinson: That is an immediate introduction to one of the big questions we had, which is, is purpose led strategy just good strategy? And Ed, you were particularly vocal in helping hold us to that whenever we said, this is purpose based strategy, you were like, no, this is just good strategy. Ed, take us away, how come you wanted to join in this community and lead this lab?

Ed Leighton: Yeah, I hope not too vocal on that point.

I think that that comes to, there are a couple of angles that I think why I was asked to join the community and participate in this lab. And the first of those was as a strategist, been a strategist for 14 years and, uh, studied and worked on strategic questions in a few different sectors. And I was struck immediately by the purpose in practice community, exactly as Andy was saying.

So a load of people are just at different stages of their purpose journey. And people have been embedding purpose for many years. People are fairly new at doing that and trying to take their businesses into that area. But there weren't a huge number of strategists in the community, which is where I think I came in.

The other angle though was to think about Ofcom as an organization that has a clear purpose. So as a public body, our remit is set by Parliament. And what's amazing about working at Ofcom is that pretty much everyone in the organization could recite the purpose that is set out for us in Parliament to further the interests of citizens and consumers where appropriate by promoting competition. This was written in 2003. And I've been curious coming into the lab about how much as a public body where you're the reason for being is set out in statute and it's oriented to the balancing all of your decisions to serve the well being and thriving of the industry and consumers we serve, what analogies that had for businesses embarking on a similar sort of orientation and what lessons for us there might be from other companies who are going on that journey.

Ruth Wilkinson: Yeah, I think that's really powerful and something that I've reflected a lot on through this journey and through working with others in the space has been lots of organizations are on a spectrum of kind of inherently purpose led, i. e. set up for a purpose and do not have profit as a key driver for that, for success, all the way through to organizations who've been set up really to maximize profit and to fill a hole in the market and deliver value for shareholders. And actually my view has been that the learnings we've had across this work have been really relevant for businesses wherever and organizations wherever they are on that journey.

And my career up till now has been entirely in the charity sector, which has been, is absolutely the purpose led sector. You know, that's why charities exist. But we could do so much better at delivering for our purpose in the sector, in the charity sector and talking about the impact of our work and measuring the impact of our work and creating operating models that allow us to deliver that impact efficiently. There's so much we can learn from that all the way through to the businesses who need to think about and who, if they want to be purpose led, think about how they can create profitable solutions to the world's problems as their purpose. I found that the learnings have been applicable across that spectrum of inherent and assumed purpose all the way through to that might be quite a big shift of thinking and mindset away from just profit.

Andy Brown: Yeah, I absolutely agree. And I think as a company, so we changed our articles of association back in 2019 to put environmental and social prosperity as our kind of reason for being. But I think organizations can think sometimes that just creating a purpose statement, a vision is enough to change their perspective. And what I was really interested in, and, you know, one of the really important things for me was the learning I took away from this lab was around, you know, that's not enough, it's not good enough. Both in terms of the scale of changing direction, but also the speed at which you need to change as well. So, you know, you cannot have purpose on the side as something that just sits in a document or sits behind your reception. It's got to be hardwired into the company and you've got to deconstruct the way you make decisions and reconstruct them again so that they're fit for purpose.

Ruth Wilkinson: Yeah, absolutely. And I think for me, that's what drew me to this lab, particularly, and it's worth for any listeners that haven't been involved in the purpose and practice community.

The first two labs, so we're lab three, the first two labs are focused on shared understanding of what it means to be purpose led. And then the second lab was all around culture and engagement. And those are two very intangible things that are really hard to grasp. And the labs were fascinating and interesting exploration of people and how they engage with this subject.

But for me, strategy was exactly as you say, Andy, how do you get it off the wall and out of people's kind of minds and into practice and action and drive? And that's been a beautiful thing for a realization for me that that's strategy is basically the critical way that organizations are going to be able to do that.

So should we get straight into it and talk about what did we learn and what do we recommend organizations do to create strategy for purpose led business?

What is a purpose-driven strategy and how to create a strategy for purpose-led businesses

Ruth Wilkinson: We spent the last six months, I think, maybe longer, bringing together a group of around 45 businesses, some really big businesses represented in there, of their strategists, of their culture and transformation leads, of their purpose leads. And we have come together and asked ourselves, how do we create strategy for purpose led business? What does strategy look like? And from all of that huge amounts of insight and content and conversation, we have created a one slide, a five stage thing, which I think we should talk about and share. And actually I'm looking around the table and I've got it in front of me.

So maybe if I introduce the headings and then if you want to add your reflections on why that stage is important, maybe you could share what you think that means for the evolution of strategy practice, if at all, or if it's just good strategy, which you can tell us. And Andy, any reflections you have on your experience of doing some of this stuff, because you're actually well on your way and doing a lot of this work already.

So the first thing we have on here, and we should say there's a kind of prerequisite that there is some shared understanding of purpose within the organization. You need to know what being purpose-led means and have an agreement about what that means for your organization.

Step one to creating a purpose-led strategy: Develop a meaningful challenge

Ruth Wilkinson: The first thing we have is develop a meaningful challenge. And that's a phrase that our friends at Mutual Value Labs shared with us in a kind of provocation session. And they talk about the meaningful challenge being the specific problem of people and planet that your business has a material role in solving in service of your purpose. And that chimes in with the PAS 808 definition of purpose, which is your optimal strategic contribution to long term well being of people and planet. And the British Academy definition, which is around creating profitable solutions for the problems of people and planets, while not profiting from creating more problems for people and planet. A very P heavy definition, that one.

And the meaningful challenge is really important because it takes that high level theory of we can solve some problems profitably and makes it specific. It is your specific measurable and externally facing statement that anyone can understand. They can go, yes, I can see why you as a business are going out into the world and solving this specific problem because of the resources and capabilities you have. So for example, you might be a business that says 'tackling social isolation and loneliness in generation Z is our purpose. And we deliver that through our business model', which might be, you know, selling beverages or creating spaces for social engagement, but you're profiting from doing that, but also solving that societal problem.

Any reflections on that meaningful challenge section of our toolkit?

Ed Leighton: What's been interesting engaging with strategy from a completely different perspective for a business that is orienting itself to a different set of objectives and success criteria is that there are a load of terms that strategists will have been familiar with for a long time and the strategy teams and organizations will have had. So they will have set a company vision or a mission statement. So what we had to wrestle with, with a lot of people who've experienced those things is what is different about a purpose statement and how might you start to establish a meaningful challenge that is something other than the traditional business metrics that companies have been wrestling with. And I think what we heard from a few of the companies who've been on this kind of journey for a number of years is that, whereas they might have had a vision or a mission statement in the past, a purpose statement and the meaningful challenges that that leads them to bite off as a company are more focused on things outside of their direct control. So there's something about recognizing the impact that the company has on this phenomena in society or in the economy and then calling it out as a challenge they want to make a contribution to solving, but that they don't solely have control over whether it is solved. And that, that need to kind of. set an objective that's slightly outside of your own control is uncomfortable. It's humbling, I think. We heard from the people who participated in the lab, but also really energizing for a lot of the people who are embracing those challenges already and inspiring for the people who had yet to make that leap in the way they were setting up their company objectives.

Andy Brown: Yeah, I think that idea of de centering the organization was one of the real takeaway points from, I guess, right the way through the conversations that we had during the lab. And as an organization that has, I thought we tried to do that in setting our long term objectives when we went back and had a look at them again. And that was one of the challenges. This isn't, you know, the lab is not a free, it's not a free ride. It's not a free lunch. We expect people to go away and put into practice and test the things that we've been talking about. So we went back and we had a look at how we were enacting our purpose. And we went, oh, do you know what, actually, some of those objectives aren't as decentered as we thought they were. So how can we add to those? And I think what was really interesting, and I found this in, in lots of instances within our own company, the need to move from the implicit to the explicit, to make it absolutely crystal clear that that's our purpose, that's our North Star and we all need to be part of delivering that. And unless we make it really explicit, you know, I think for many companies who are trying to change the direction of the company, you need to do that, you need to make it front of mind. I heard somewhere that from a behavioral safety point of view, you need to change your learned behavior 2000 times before it becomes the new norm. So I think what I took away from a purpose perspective was that, you know, it's not good enough just to kind of state you're going to be purpose driven and write the documents, you've got to live it. You've got to keep living it. You've got to keep bringing it to front of mind. Otherwise you're not going to do what you need to do.

Ruth Wilkinson: Yeah, I thought there was an amazing moment in the lab where we all had that realization and Ed you talked about being humbled. We are so self centered. Organizations just see ourselves as the king of everything and that where everyone's interacting with us through our own lens of they're our customers, they're our suppliers, they're our local communities and we really see ourselves as the center of all and I think lots of organizations who have adopted a purpose still see themselves as the center of that and then Ed what you were saying there about that meaningful challenge is kind of just, we're contributing to it. It's just outside of our grasp, of our scope of control. And we hate that because we love being in control of things. So that's why it's easy for us to say, we're going to increase the price of that per unit and increase our margin, we have control over that. But actually the power of stepping out of the center, and this leads onto our next point, which is around thinking about the stakeholders in your ecosystem. Not as your customers, but as people in their own right, not as your people that live, your neighbors, but as people that live in this community. And that de centering, as you said, Andy, and that's, that's the phrase that mutual value labs shared with us that we all latched onto, and I think really resonated with us is so unfamiliar and uncomfortable and we need to practice it over and over again. But I think it also is an amazing kind of innovation tool and an amazing problem solving tool, because it helps us see problems differently and find solutions that we would never have realized if we were still seeing ourselves and the people in our ecosystem as directly in relation to us.

Ed Leighton: Yeah, I think there's some further work to do to study some of the findings we've had through going with this lab and comparing it to systems thinking and a systems thinking approach to how change happens and how organizations operate within a system. I think that'd be quite interesting further bit to explore.

I mean, maybe just to draw out a couple of the, the contrasts with existing strategy terms that people listening will be super familiar with. And I think one of the interesting features of thinking about what's different with a purpose than a mission or a vision statement is, I think, fairly quickly, everyone who is deeper into this world than me was saying, actually, well, a purpose should change a lot less frequently than either of those things. And really, this should be a statement that is enduring beyond even an extended strategy cycle. And that quite quickly gave rise to one of the tension to some of the strategy teams in the room is that, is this a new hierarchy? Is this a new type of thing that sits on top of all of the work we do? And I think some of the purpose professionals have thought of it that way. And actually over the lab it became less uncomfortable and we managed to resolve that tension by recognizing that embedding purpose truly throughout end to end in the business is about more of the foundations. How are you setting up the incentives and the practices in a company to serve a purpose rather than being another form of top down direction setting that then everyone has to interpret and pivot themselves towards.

Ruth Wilkinson: Yeah, there was definitely that moment of the word hierarchy was raised and we're all thinking, oh, who's coming out on top here it's like a fistfight between purpose and strategy.

But also, I mean, that happens, plays out in organizations. Cause , you know, there's also brand and comms comes in and employee experience comes in and DE&I comes in and sustainability comes in. And you're like, who's in charge here? Who's setting the direction and the vision. And ultimately it's so interesting. That's a real test of how deeply purpose is embedded in the organization and the shared understanding of purpose. If your purpose is your optimal profitable contribution to long term wellbeing of people on planet, it is not a thing in its own right. It is everything. And it will be in your strategy because that's what you'll be aiming for, and it will be in your business model because that's how you're solving the problem and profiting from it. And it will be embedded, but if it's not, and it takes time to get there, obviously, that jostling will happen probably where there will be tension and, probably a message from leadership saying, okay, you guys need to get in a room and align on this. And then there will be that real life playing out of that hierarchy and, and jostling, I think.

Andy Brown: You said at the beginning that we tried to have a bit of fun with this. And, you know, I still think one of my fondest memories from the different sessions we had was when we played the game. purpose pursuits and we got people to step outside of their normal day job, I think it was really important decision to do that, because we can all bring our own lived experience and get around the table and discuss what's worked and what hasn't worked and where we think things need to change. But I think that effectively what we did was create a fictional company that was making the decision to change from being, you know, business as usual, profit driven to being truly purpose led. And then we adopted different stakeholder views around the table. I think kind of stepping out of your normal lived experience really helped us to kind of decenter, have that conversation but in a, in a fun way, although I guess a lot of people might hear role playing and think, oh god, that's the last thing I want to do. But actually facilitating those, I think everybody in the room was getting kind of deeply into it and it allowed them to explore things that possibly wouldn't have come out if they were trying to do it, just, you know, bringing the experiences of the companies that they work for.

So hopefully people listening will get an opportunity, you know, can dig into the resources that we've created, the game being one of them, and perhaps run some lighthearted sessions in their own organization to experience what it, well, what does de centering really mean? What is it? What's it like to try and make truly purpose led decisions within an organization in the safe knowledge that it's not real.

Ed Leighton: Maybe it's worth a couple of seconds just for those who haven't been spending six months playing games with us to kind of explain the methodology we went around in this lab, this group of people looking to explore the question you outlined earlier, Ruth.

I think we fairly quickly alighted on the idea of needing to get people with very different experiences of both purpose and strategy over time to contribute with an open mind. And so we needed to find a way to democratize the input of people. So that you weren't hearing from, Oh, well, you've been doing purpose for for 10 years rather than two, and for that voice to be louder. Or you've been involved in setting a company strategy versus you've just been the recipient of one. And for that to influence the status of people's contributions. So, very quick, easy way to do that was that for the first few sessions, nobody shared their name or job title, which was strange for a lot of people who have that very well rehearsed. This is me. And this is, this is what I do.

And the other thing we designed, as Andy mentioned, was the game where we had a fictional company in a sector most people who won't have worked in, in the fashion industry. And asked people to take a role that they don't normally play in a company, in a sector they don't normally operate in. And that as a device created two things. It created an experiential way of exploring the concept of building a strategy for a company. And it created a space for unconstrained thoughts. So, fans of workshop design know that's the kind of holy grail if you can get that in a kind of, strategy development workshops. You can get people thinking outside of the constraints that they operate in day to day, experience something new, and then start to pick out those kind of insights afterwards. What have I learned from those unconstrained sessions? And then how do I build the constraints back in and see whether I end up in the same place I thought? That's what led to some of the other insights that we've summarized in our one pager.

Ruth Wilkinson: One of our participants actually shared an analogy with me last week that I thought chimed massively with why we created the game, but we hadn't put it in this concept. This is Gemma. I want to quote her effectively, Gemma from JLL. She said, it's really easy to grasp the concept of running a marathon. If you start thinking about running a marathon, you can think about what training you need and what's going to need to happen for you to be able to do that. And you can get the concept quite quickly, but actually doing that is really hard. And so the concept, practicing the concept is a great way to start people thinking about how to actually start taking the really hard, complex steps of doing this in reality when you start to have to navigate the weather and the conditions and, you know, injury and all of the other things that might crop up in doing the actual marathon. But practicing the concept at the beginning was what we tried to do in the game and what I know others have started to take out into their organizations and run the game internally. So as Andy said, we will share a kind of downloadable version of the game. We can go and run it internally, and you can also make it your own and add other things to it because it's for the community to use however you like.

Okay. So I think we should go on to our next step and I think we'll have to speed through our five steps of strategy development in purpose-led strategy. And we've started to talk about our next step already, but we've called this understand your stakeholders.

Step two to creating a purpose-led strategy: Understand your stakeholders

Ruth Wilkinson: And we've been exploring that already by talking about the decentering that mutual value labs introduced us to, which essentially our advice here is look at the systems in which you operate, the economy, the environment, the stakeholders, the communities, through the lens of your meaningful challenge rather than through your lens. And so if you're, for example, taking forward tackling social isolation and loneliness in Generation Z, imagine how different your stakeholder map is if you put that in the center of it versus we sell food and beverage. And that stakeholder map is going to be extraordinarily different. And you can start to have a look at what is going on for those stakeholders. What are their challenges? What are their pains? What are the opportunities to support them that you might not see if you were looking through your traditional kind of lens of what products and services we deliver, but that you might see if you step out of that and just think, how can we help deliver positive impact, contribute to positive impact for our meaningful challenge? And then you think about all the stakeholders around the what their pains are, and then you can relate it back to you. How could we positively contribute to that because of who we are as an organization? And we advise strongly here, don't think about this through the limiting lens of the products and services you do today, but think about it through the impact levers you have, your relationships, your credibility, your brand, the capitals you have. That might be financial capital, but it also might be intellectual capital, human capital. How could you take some of the know how you have, and use that in a different way to support impact for that meaningful challenge. And the key thing that we always come back to here is in the case studies where this has happened and organizations have run really hard at supporting something they've identified in their stakeholder group, they haven't done it with profit first and center. They've done it with create positive impact for our meaningful challenge at the front, but they've set it up through a feasible business model. They've allowed there to be a viable business model behind it, behind their concept, behind the thing that they're running out. And that has meant profit has been an outcome of that activity. It's not why they're doing it. They're doing it for their purpose, but profit has been an outcome. And that's critical because if you focus on profit to start with, and you think if we solve this problem by we're going to make a massive profit from it, people will know that they will see through it. And they will therefore, it will discredit the effort. Anything that anyone wants to add on or reflect on the understand your stakeholders section of the toolkit?

Andy Brown: I guess one of the things for me was really about how you integrate the insight from those different stakeholders into the way you think and make decisions. So just like you have to create a meaningful challenge, your interaction with your stakeholder has to be meaningful for you, and for them, I think more importantly as well. And I think that needs a little bit of thinking about and going beyond the traditional ways that we might talk to different stakeholders, consult with them, which is always a strange word, is consultation really happening, or is that you just giving information and then taking the bits from the answers that you're interested in? You know, is that one off? Is that something that happens on a regular basis? Does that conversation and relationship with stakeholders become the norm, become business as usual. So that was some really interesting kind of takeaway thinking for me, for our organization, but from lots of people that I spoke to as well. And, you know, and at what level in the organization. So ultimately when we talk about the decision making bodies within our organizations, where are these stakeholders showing up there? And, going back to the game that we talked about, have we got environmental and community voices being heard on that board in some form or another? And if we haven't, okay, what's it going to take to get there? Because that's, I think, where we need to get to.

Ed Leighton: I think the thing about stakeholders that started jumping out to me was how the tools that strategy teams all over the world will use to analyze their stakeholders are really relevant for purpose led strategy as well. It's more the way looking at it with a different lens lets those tools find new types of new conclusions than they would have done without the purpose lens. So to make that practical, you might have an environment scan or horizon scan that identify all the different trends from different factors that are happening, but with a slightly more decentered approach, you might find that there are new stakeholders affecting your meaningful challenge that you didn't think about before because you didn't have a direct interaction as a supplier, a customer or as a competitor. But they're actually key to the outcomes that you care about as business.

I guess the other way is that even with stakeholders that you were aware of in your stakeholder mapping, there might be new kinds of relationships that are needed to move, whether that's a partnership or a monitoring that you think about them in quite a different way. So all of those skills around environment scanning and horizon scanning that are really familiar are directly applicable to better understanding the meaningful challenge of a company and how you might start to impact them.

Ruth Wilkinson: I think that's really powerful input from you, Ed, as a strategist. It's really valuable to see where we can take existing deep expertise and then add a slight tweak to the lens that might open up a whole new load of opportunities and information to us. Our next phase, we already started talking about, so this is point three on our five points for creating purpose led strategy. And that's connect activities to impact.

Step three to creating a purpose-led strategy: Connect activities to impact

Ruth Wilkinson:: So once you've done your stakeholder mapping and you've thought about what it is that you might be able to do because of who you are as a business, your resources and capabilities, what can you solve from the problems you've identified in your ecosystem around that meaningful challenge?

You can then start to think about what are the activities we can do that might help deliver this. And that we think is a really powerful way to connect what you can do in the future or what you're already doing today with that end meaningful challenge, that impact you want to contribute to. And we use a tool sometimes in organizations called theory of change, which came from the not-for-profit sector unsurprisingly, but essentially creates that line of sight between activities and how it might create impact. And I think I'll just, I'll just add on to the next stage, which is set measures and targets. That's 0. 4 of our five points.

Step four to creating a purpose-led strategy: Set measures and targets

Ruth Wilkinson: And that is really tough because it's hard to measure impact, especially big societal or environmental impact. But actually theory of change helps you do that because you can start to think about what are our lead indicators? What is it that's going to give us a good assumption that we are creating some positive change? And that's thinking about, if we're delivering activities as we set them out, if those outputs that we're getting are what we expect, and then it starts to become a bit more tricky when you start to think about outcomes. How do people find that? What's the qualitative insight we're getting from the activity that we've chosen to deliver? And then impact is really tricky to measure, but if you've got good lead indicators and good lag indicators in the outcomes, you can extrapolate from that some impact that you're having. And it's really important, obviously, to think about measurement, but also not to spend more time worrying about how to measure impact than actually delivering impact. So it's always a balance and a tricky one. I thought I'd combine those two because I don't want to start talking about activities without also setting out the challenge to everyone that targets and measures are important to.

Ed Leighton: And that is the point Andy's been most vocal about throughout I think about the importance of how you orient metrics to what you're trying to move the dial.

Andy Brown: Yeah, I think one of the consistent themes that came out as well was that the importance of understanding the metrics in the short term and the outcomes in the longer term, because any organization needs to be viable in the short term. But if you've set a purpose and that purpose is slightly longer term, you need to make sure that, you are still going in the right direction. So the way I've come to start describing all of this is that it's like the dashboard in your car and your sat nav. So the dashboard in your car is telling you how you are performing at this current point in time. Have you got enough fuel in the tank? Are you overheating? You know, all of those kinds of things. Is the tire pressure correct? Your sat nav is saying, right, but this is where we're trying to get to. This is the ultimate, you know, destination for this organization. And you can't have one without the other. You're much more likely to get to where you want to get to if you're using both. So that was something that came out of the conversation constantly. And, those two things will interplay in different ways over a period of time. And, we saw in, kind of playing the game that sometimes you need to make decisions which might slow, you know, your, your journey to delivering your ultimate purpose. But if you don't do those, you're going to fail. And so you're never going to deliver your purpose. So it's important to have both elements of those.

Ruth Wilkinson: I love that analogy. I think, oh, well, let's find a, we can do an EV version maybe to be extra sustainable. But if we imagine fuel or the amount of charge you have left is the profit. That you're making your financial viability. Does that work in your analogy? You know, you need to be doing what you need to in the short term to find the next charge, the next electric vehicle charge or the next petrol station. But ultimately that's, you don't want to get to the petrol station. That's not why you've got in your car that day. You're trying to get to a destination that is hopefully going to feel a little bit more intrinsically positive than rocking up at a petrol station or plugging in your EV to charge. But you need to do that to get there. I love that.

Andy Brown: Absolutely. And one of the other things to say as well is, and this is something that we've really started to see now, and you were right Ruth on the kind of the lead and the lag measures, is that you've got to be keeping an eye on the externalities as well. So you might be trying to deliver part of your purpose on, you know, how you manage around affordability and the vulnerability of customers.

And so you might set some targets, which you think, right, okay, if we get to that position, that's great. We'll be making that, you know, meaningful contribution. But if you don't look out the window every now and then, you don't realize that actually the world has moved on. So we've had a cost of living crisis. So actually what you thought was the fair contribution towards affordability and vulnerability two years ago has completely now changed. So you need to reevaluate that and you need to change that target. And it's the same with certain elements from an environmental perspective, biodiversity loss and the climate crisis as well. So, yeah. We've got to add some windows in there as well so that we can see what's going on in the outside world, and we don't just sit listening to ourselves and patting ourselves on the back and, Oh, we're meeting all of our targets we must be purpose driven. Well, hang on, no, the world has changed. So you're not quite as good as you thought you were.

Ruth Wilkinson: I think this is an important point as well, to kind of give the full definition of being purpose led, which is to say that you want to be driving towards that end, that optimal strategic contribution, but you also can't profit from creating more problems. And so you might have a purpose in one specific area. And we do advise being specific. Your meaningful challenge should be specific to a stakeholder group and a problem that you want to solve. But that doesn't mean you can create loads of negative impact for other problems that are going on. So the example I always use is, if you're delivering amazing services and let's say we're delivering amazing healthcare services for children in the UK, helping them with a health issue, but we're buying nurses uniforms from the cheapest possible factory in South Asia. There is a high chance in that scenario that we're delivering really positive impact in the UK for children who are suffering with a health issue, but we are contributing negatively to children's well being in South Asia who may or may not be working in modern day slavery. And so our choices across our organization have an impact. We need to be driving towards that positive impact we set out to deliver, but we need to be testing that we're not creating more negative impact. Otherwise it basically just nets out and isn't net positive for the world. We can't create more problems.

Ed Leighton: I think the game started to try and tease out other ways that the kind of act of making decisions about your business can be affected by events in the outside world, just like Andy's describing. So, it simulates a series of unfortunate events that happen. Once you've built your beautiful strategy in round one, then a lot of stuff happens that can knock you sideways.

And maybe to stretch your car analogy to breaking point. I think the experience of going through the game and having, you're given complete freedom to change any element of the company's strategy, business, product lines, priorities, but not its purpose. And it's kind of like the experience of having to re route or change the way you're driving, but not changing the ultimate destination in the sat nav. Maybe it'll take a bit longer. You're learning that because of things that are happening, the conditions around you mean that you actually need to make another stop that you hadn't planned for, or you need to change. But the having one thing set and permanently intransigent is helpful in being able to prioritize and treat most of the very difficult trade offs that you'll find day to day.

I think it's another area as well where strategy practice can help businesses really embed purpose because it's not just setting the strategy up front, it's about analyzing and reviewing how that's unfolding when the perfect plan hits the real world. And those skills of being able to monitor and anticipate the need to pivot a bit of business change, to hold fast enough in the face of difficult environmental factors around your business, but also be willing to change at the right moment.

And the judgment around that was just a load of strategy tools that help businesses do that. And that's the kind of toolkit that's going to be necessary as more and more businesses become purpose-led.

Ruth Wilkinson: That's the perfect lead in for point five of our five points of creating purpose led strategy, which is deliver on your strategy and measure performance.

Step five to creating a purpose-led strategy: Deliver on your strategy, measure performance

Ruth Wilkinson: And I think that's a bit of a reductive title to the complexity of actually doing that. But as you say, Ed, it's about actually delivering on that as far as you can, but also recognizing that things will crop up, roadside activities will appear and we'll need to pivot or change our direction. Some of the advice we've given in that step is we've talked about governance, we've talked about keeping track and delivery and accountability for measurement and targets, thinking about short term profitability and long term delivery of impact for that meaningful challenge. And also thinking about what else might need to happen in the organization to support that. So culture, values, behaviors, any of the other kind of ways that the organization delivers and coalesces around your shared purpose is critical to think about in that delivery. Any top tips from either of you on that? You've got your purpose led strategy, how might you deliver and what might you do to kind of overcome any challenges you face?

Andy Brown: For me, a couple, I guess. One is you've got to be quite visible in your decision making. So, you know, how are you using your purpose in your decision making and going back to the metrics, you know, really sharing those. Those shouldn't be just confined to the boardroom or the governance group that's making particular decisions. Everybody in the company needs to understand that the way they are making decisions and the way they're performing is helping to deliver that..

I think it can be useful to think about, and I think you've both picked me up on kind of saying this several times before, but reward and recognition within the company. We've got to remember that certainly with big organizations that aren't necessarily, or haven't necessarily been profit driven, there are a spectrum of people within that organization. And some may be absolutely passionate about purpose and your north star, others, it might be a normal job for them, a day to day job. And so actually reflecting the things that help to drive performance, pay reward, recognition, and aligning that to your purpose can be really, really valuable. And it also helps to demonstrate that when you get things wrong, you're not being rewarded for going against delivering your purpose. And then being transparent in the way that you provide that information to the outside world as well, kind of loops back into that de centering and gaining that trust with the stakeholders that you are really there trying to deliver the purpose on their behalf.

Ed Leighton: Yeah, I guess in terms of impact, I guess one shout out I give is to the previous lab in the purpose in practice community, which thought about culture and purpose. And it kind of builds on what Andy's saying there, that without the culture of a company and the buy in to a strategy up and down the management chain, you really do face a long uphill battle to get things done. And that's true of all kinds of strategies and the interaction between running a really participative strategy process that involves business units and people on the ground who will be putting it into practice drawing that insight up and informing the exact team to make a strategic decision and set priorities in a way that resonates with those on the ground challenges and aligns to the high level objectives you've got is an art that will be all the more important for purpose when it can be uncomfortable that the company you've worked with for a long time is now biting off a challenge that it doesn't control.

Andy Brown: And I think we can't underestimate that, particularly for an organization that's going to move from one traditional way of working to a new purpose driven way of working. And to throw in another strange analogy, if you've bought a Lego kit that is designed to be a purpose led organization, and you follow the instructions, you put that together. That's one thing. If you've got a Lego kit that is something else entirely, and you need to deconstruct that and then recreate it as a purpose driven object, it's going to take longer, it's going to be more complex, it's going to take time. So that's not a word of warning, but just a word of pragmatism that even, you know, if you make the decision, if you change your articles of association and you move from being a traditional company to a purpose led company, it's going to take time, it's going to take quite a lot of time and you might need to do things in stages to make sure that you're bringing everybody with you, that you're getting it right, you know, chunk after chunk. And I think that came out in some of the conversations as well, was that don't be afraid to try and test some of this stuff in your organization, in a project, in a department, in stages, demonstrate that it works, bring people on board and then build and build and build it out from there.

Ruth Wilkinson: Okay, I think we are running to time. We are going to have to finish up this conversation as fascinating and as long as we could definitely go on about this, I think we should close with what's one thing that we would advise? What's the one kind of key thing that we really want to share with any listeners? And I'll kick us off.

Practical advice to drive purpose-led change

Ruth Wilkinson: My one thing I just I just think it's the most amazing thing that's come out of this lab and that I really advise businesses to do is to recognize the power of creating that meaningful challenge, of finding out what the specific problem you want to face and tackle is, and then using that as a tool for innovation. Cause I just think that will unlock so many more business ideas and so many more profitable business ideas. Because if you're thinking about yourself differently, if you're looking at the world and going, what can we solve for people and planet and how, you're going to come up with some ideas that you aren't going to come up with if you think, how can we make more money? And I just think that's the future of business. I think it's the way that business is going to be relevant in the future. And it's good business. It makes sense. You solve a market need. I think that's going to be a really cool way that business is going to take this idea.

Ed, what's your one thing?

Ed Leighton: I think my one thing would be coming back a bit to the theme of de centering that we talked about earlier, and we, we also talked about the value of simulations and just the simplest way you can run a simulation of this. Start with a blank sheet of paper, do a classic spider diagram, and rather than putting yourself and your company at the middle of that diagram and working out all of the stakeholders and contributing factors around it, just try for 10 minutes putting what you're trying to achieve, that outcome at the middle and just see how it feels different, both for the different people that end up around that diagram and the different ideas that flow for how you might interact with all of the other stakeholders who are contributing to that outcome that you've decided you care about. Even if you haven't gone all the way to setting a company purpose yet, just doing that is a really liberating, creative process that I think touched everyone who was involved in the lab in, in different ways.

Ruth Wilkinson: Yeah, I love that. I was just going to say two things to, to challenge yourself on that task is when you write customers in a bubble, to decenter properly you're going to have to think, who are they? Who are your customers? As people in their own right, they sure as don't think about themselves as your customers. They think of themselves as people. So who are they? And then when you start to do that, you'll realize how many assumptions you're making about the people in your stakeholder map. And so my big kind of caveat slash red light is don't take action until you've actually asked them. So you might do that decentering exercise. You might think about your stakeholders differently and go, right, they might be feeling all of these challenges that actually we could help them with. Don't rush into doing that until you've asked them how they're doing, what's going on for them, because you'll probably find some stuff out that you didn't realize, and it probably challenged some of your assumptions that you might be holding.

But it's a great first step in that direction for sure. Andy?

Andy Brown: Yeah. So I think I agree with both of the points that you've made. I guess the takeaway for me is the power of community. And I think I have learned more and had a greater impact back at work through my involvement in this in the last year than I've probably had in all of the conferences and the bits of training and stuff I've done over the last five years. So I think, you know, coming to something like this with an intent to learn, to grow your mindset and to take some action as a result of it. Put something in and you'll definitely get something back. So, yeah, if it's not this community, then find another one, find one that works for you and find people who are willing to share their experiences and expertise with you and be willing to share yours, be open, be vulnerable. Cause at the end of the day, all of our purposes are going to align at the very highest level, which is about protecting the planet that we live on and the communities that are reliant on it. Because if we don't have that, none of us have an organization. None of us have a job. So there's nothing to compete against. Let's just crack on.

Ruth Wilkinson: Absolutely. Love that. Okay. So you spoke to it a little bit there, Andy, but what can listeners do next? You can join the community of practice. Hopefully we've sold it to you with our glowing recommendation and sharing some of the findings from this lab. There will be future labs starting off in the autumn of 2024 and the community is ongoing. We have peer to peer sessions. We have a LinkedIn group. We have a WhatsApp group and we get together in person as well, which is really, really amazing and really powerful. You can join the purpose and practice community by sending us a message or blueprint for better business, a message that's available on their website, which we will link in the podcast description. You can have a look at the tool that we have created. So we just took through the five steps that is on our one slider, but there's a whole load of slides behind that, including the game. And that will be uploaded on our website, the Clarasys website, and also on the Purpose in Practice space on the Blueprint website. We will share a link for that as well in the description.

You can also go and read some of the other documents we refer to, particularly PAS 808, which Andy mentioned four minutes into the podcast recording. I was thinking how long it would take you to mention it, and it only took you four, which is quite impressive, I think. I'm sure there's been quicker mentions before.PAS 808 is available to download on the BSI website and is really, really helpful, fascinating framework to think about what it might mean to be a purpose led business. Anything else we advise listeners to do as our next steps? I think I've covered them.

Andy Brown: Take some action. That's it. Don't just listen. Don't just be a passenger. Jump in the driving seat.

Ruth Wilkinson: Yeah, I should have said that. Absolutely. Get involved and take some action.

So I thought we could finish the podcast by going around and going back to Andy's analogy about the car, the destination, the sat nav you're using and the fuel you need to get there. And as you were talking about that, Andy, I had two thoughts going around my mind. And firstly, I was thinking literally, if you gave me a car right now outside this office and I could jump in it and drive anywhere in the UK, that's my parameter for driving. Where would I go? Because I think intrinsically, we're all going to be motivated by the beautiful spaces that are around us. So I'd love to hear that. Where's your favorite destination in the UK, but then maybe more business like, where is your destination feeling like at the moment for the organization you're working in, or maybe for you as an individual, because obviously our personal purpose and our organization's purpose might not always be exactly the same. They hopefully align in lots of ways. So whatever you want to share from that. And, uh, I'd love to hear about where you want to go as an organization, as an individual for that purpose and destination. And then where would your actual destination be that you would like to drive to right now, if you could, Ed?

Ed Leighton: Yeah, so I always love driving back home. I've lived in the Southeast for over a decade now. I love driving back where I grew up, which is Gloucestershire and loads of green space, lots of lovely villages to drive through. Working for Ofcom, the first thing everyone asks you about is the mobile coverage and the broadband. And it reminds me as well that actually if our mission is to make communications work for everyone, people living and working in exactly the same kind of place that I grew up, it's important that we remember the importance for them of networks that they can rely on. So it's always great to go home and be in the countryside and, but also serves to remind us how important the work is to truly live up to that purpose, to make communications work for everyone.

Ruth Wilkinson: Lovely. Andy.

Andy Brown: So, okay, I'm going to kind of merge those two answers into one. When you're asked, where do you want to drive off into? Often people will say the sunset, don't they? That's the traditional thing. So I'm going to flip it and say I want to drive into the sunrise. So I will drive to Nest Point in Lowestoft, which is the most easterly point in the UK, which is where the sun rises first in the morning. And why do I want to do that? I think it's because for me, no matter how bad you think things are, no matter how dark it might seem, the sun rises tomorrow. And tomorrow you've got another chance of doing something positive. So I shall ride into the sunrise with a focus on doing something positive.

Ruth Wilkinson: That's amazing. Those are both really inspirational. I'm going to try and do that justice with my answer. I think my destination of choice would be Cornwall, where I associate, and I think similarly, Ed, to the family that either live there or visit there regularly, and just the connection with nature and the wildness. And even if it's pouring with rain and howling gale, I'm still very happy splashing around the sea. And for me, I think that speaks back to the two drivers for me, which is around ensuring that our environment can exist and maintain the health, biodiversity, and the future of those beautiful spaces, but also giving people the opportunity to enjoy them. And that for me is a justice issue and an equity issue. I'm really incredibly lucky that I grew up spending lots of time in Cornwall and other beautiful places in the UK and the world. And that it's not fair that people don't have the opportunity to do that and I think that's a really important part of the future that we should not live to work, we should live to enjoy the spaces that we live in and we should be able to find an economy and a way to do both of those things. I think so that's my personal purpose and that connects with the work that we do at Clarasys, working with our clients in lots of different sectors, helping them improve the way that they support their people and the communities that they operate for.

Okay. I think that's all we have time for. That's been a fascinating romp through six months worth of work and discussion talking about purpose and strategy.

I don't think we've gone into anywhere near the depth we've had the conversation in, but hopefully we've created something lighter and easy to listen to that will give you a flavor of what we talked about. If you'd love to engage more, add us on LinkedIn and we'll tag our LinkedIn profiles in the description.

You can email us and our email address will be available for the Clarasys email or for the Purpose in Practice community. And we'd love to see you at a session in the future or reach out with any other questions you have. Thank you so much, Ed and Andy, for being here today. It's been such a fascinating conversation.

Ed Leighton: Thank you, Ruth.

Andy Brown: Thanks, Ruth.

Clarasys: Thank you for listening to our Simply Sustainability podcast. We hope you enjoyed it. For more information, please contact us at sustainability@clarasys.com