A north star purpose should be the glue uniting and aligning your culture and your strategy across times of organisational or market change. But for many CHROs, leadership’s driving focus on business outcomes comes at the expense of championing what inspires people.
There are four warning signs we always look for in evaluating if purpose is under-powered. Teams don’t connect the purpose to daily behaviours and performance. There is clear misalignment between what’s driving the strategy and what defines the culture. Values and vision feel generic and are seldom cited as part of decision-making. And/or teams within the organisation have their own sense of identity and embedded identity.
**************
Executive brief
Q: What is a north star purpose?
A north star purpose is an organisation’s guiding ideal — the enduring reason for being that directs strategy, culture, and behaviour. It serves as a compass for decision-making and cultural alignment.
Q: Why is a north star purpose important for CHROs and leadership teams?
It helps CHROs to strategically align culture, engagement and leadership behaviour. A clear purpose unifies teams, drives motivation and anchors change during transformation.
Q: How is a north star purpose different from a vision or mission?
Vision describes the future state of the organisation; mission explains what people do daily; north star purpose expresses the ultimate difference the company seeks to make in the world.
Q: What are the risks of not having a clear purpose?
Without purpose, organisations drift. They lose alignment, employee engagement declines and decision-making becomes reactive instead of principled.
Q: How can CHROs turn purpose into culture?
By embedding purpose into leadership expectations, cultural rituals and performance frameworks, CHROs create a “Principled Culture” — where purpose influences both the cultural experience and business outcomes.
**************
Aspirational, not astronomical
Keith Yamashita started it. At least, that’s where we first heard it. Your north star purpose is an ideal of your company or brand that burns bright in front of you and your staff, that leads you on, that fires you up and that you never let out of your sight …
It’s the brand and the culture you dream of being. It’s what your people long to be part of. And it’s who your customers always hoped you would be and that your competitors can’t be.
At Audacity, we talk about north star thinking like this: we define ambition or purpose as the greatest change you as a business or brand want to see in the world.
But we also place it in a context that ensures it is informed by other agendas. Your north star purpose, in our view, is tempered by your vision, which we define as the greatest change you want to see within your own company. And sometimes by mission, which is what your people come to work to achieve every day.
We also link north star purpose to a vital decision-making tool we developed called the benchmark question. Without a purpose, you risk drifting.
Why north star purpose works
In an article on Purpose, Not Platitudes, McKinsey state that when a company or brand has an activated purpose (i.e. one they act on) and that purpose aligns with what truly matters to people within the culture, people are far more engaged, far more likely to stay, and far more likely to advocate for their company. Organisations that achieve this cultural coherence reported close to 80% engagement among employees and an even higher intention to stay compared to a 20% engagement level for organisations that didn’t do purpose well.
Purpose may seem abstract to many leaders, but, across the enterprise, so many people can see that north star in some form. When we ask people in workshops about the company or the brand culture they dream of working for, they can tell us, sometimes in amazing detail, what it looks like, how it feels to be part of that , what it’s renowned for.
At times, it seems like they can almost reach out and touch it. What they often can’t see or touch is how they leave where they are and get to where they would most like to be.
If you’re a CHRO looking to strengthen or change your organisation’s strategic direction, framing what you are doing around a north star objective, and having these conversations around what is possible, can be extremely powerful. We call this building your Principled Culture.
North of where they are
It’s natural for people to look for tangible ways to improve things. If you’re engaging with people on purpose as a leader, listen very carefully to what you are being told. Many of the ideas will be insightful and important. They can often represent powerful improvement opportunities: fast and effective quick wins that will help shift the momentum.
But, at the same time, be careful how you treat this information. Chances are what you are hearing is, at some level, a variation on today. Taken literally, it’s probably an improvement on the reality people are part of – rather than an indication of where you truly need to be heading in order to be world-changing.
To disrupt your existing model and reset your competitiveness, you need to step-change how people feel about your culture, how they connect with it, what they understand the future could be.
Contribution to purpose should feature as an ongoing consideration in how leaders evaluate performance.
Three steps to turning purpose into practice
You want your people to make an emotional shift in direction: to commit to feeling a different way about the company and to approaching their work with a different mindset. Without that, leadership teams will often define success based on their own priorities: ROI, engagement, reputation … Those measures are all important but they’re not universal enough to directly achieve a deeper sense of alignment across functions.
The first step is to give people permission to dream. People will tell you what needs to change if you let them: but first decision-makers need to foster an environment where those conversations and challenges feel welcome.
Then, instead of asking “what do you think this company should be like?”, we ask “what would you like to feel that you don’t feel now?”. There are a number of ways to discover this. For example, you can use the Emotional Culture Deck to identify the emotional shifts needed in your culture.
The answers help build an emotional gap analysis of the company you are versus the company your clients and your staff would like you to be. Once you know that, you’re ready to develop a strategy for the emotional connections the brand and the culture must look to generate from the inside-out.
The third step is to set a north star purpose that recalibrates who in the world you think you are and what you think you’re here for. We do this in a range of ways, but usually through workshops or strategic sessions informed by interviews with people throughout the organisation.
Purpose should be purposeful
So, a purpose is powerful and potentially very good for your culture. But do you really need one? And are there options? Does purpose have to be all-in?
For a time there, purpose was every marketer’s golden word. It felt like there was purpose in everything and everywhere you looked.
Inevitably, there was a backlash. Fund manager Terry Smith famously took aim at Unilever, saying that the organisation’s focus on sustainability and brand purpose had jeopardised performance. He singled out Hellemann’s mayonnaise as an example, stating that the purpose of the brand extended to creating better salads and sandwiches.
A middle ground formed. Mark Ritson, in an article titled Good purpose Bad purpose, makes the point that purpose itself is neither good nor bad. It is a strategic choice, not a dogmatic must-have, he argues, and execution is everything. Many get it wrong, because they put pursuit of purpose ahead of everything else, and fall flat on their face.
“Review your market.
Review your category and the role your brand plays within it.
And review your competitors, and the room that purpose would allow for distinctiveness and differentiation against them.
And then make the decision.”
In other words, treat purpose as a strategic opportunity and evaluate the need for it on that basis.
“Some brands in a multi-brand group should be purpose-driven and some, by definition of market, heritage, category and competition, should not.” If purpose is not applied this way, and is instead treated as a must-have, then the very point of having one – as a focus for strategic differentiation – devolves to just being the latest marketing panacea.
There are two potential north stars. They look the same …But they will take you to different places.
The different ways organisational purpose is applied
Our experience is that purpose is applied in a range of ways, and with varying degrees of success. Too often, it comes up in conversation (at brand or cultural strategy level) only to be left there, once that work is completed. To our minds, that’s an influential indicator lost for CHROs. Purpose should feature as an ongoing consideration in a shared leadership framework.
In an eloquent article in HBR, Ranjay Gulati reviews his in-depth research on how mission-driven organisations—both old and young, and spanning a variety of industries and geographies—succeed. His research advocates for using purpose as a north star to clarify priorities and inspire action in situations where trade-offs must be made. It also requires leaders to lean into such deliberations in consultation with stakeholders.
He breaks the application of purpose down into four groups:
- Deep purpose organisations are those that are deeply committed to pursuing purpose through dips and rises in commercial and social outcomes.
- Organisations with convenient purpose talk about purpose but act on it only in superficial ways.
- Some treat purpose as a peripheral issue: taking part in corporate social responsibility efforts, but keeping them separate from their core business.
- Finally, there are those who take a balanced view, looking for a win-win for both profit and purpose.
Why leadership needs an organisational north star
The secret to making purpose work well if you want to be a deep purpose organisation, Gulati suggests, is:
- Have a north star purpose, and state it clearly. Make it an active decision filter.
- Resist the urge to dodge tough decisions that your true north purpose may generate and instead live with the discomfort, ambiguity, and contradiction to make effective trade-offs.
- Look beyond short-term win-wins to accept good-enough-for-now solutions that will lead to broader long-term benefits.
- Communicate your decisions clearly and effectively to stakeholders.
Embedding purpose in culture: identifying the right north for your purpose
Taken together, all these ideas point to an inherent trick-of-the-light in finding your north star purpose. There are two potential north stars. They look the same. They broadly head in the same direction. But they will take you to different places.
If your purpose aims true north, it is the yardstick for everything you do. You literally take your direction from it. Sticking with a true north star purpose includes tackling the trade-offs needed to get there and to change the world. It requires you to prioritise aligning everything else to your purpose.
We think true north lies at the end of this question: What changes will we look to contribute to in the world as proof that we are on-purpose?
If your purpose looks magnetic north, it sets a direction that your people and investors feel comfortable having but one that is much less demanding. You use purpose as an intention rather than a commitment. It does not drive your strategy.
We think magnetic north lies at the end of this question: How will we need to feel and work as a company, and how will our customers need to feel about us, in order for our investors to be making the money they deserve?
Both work to achieve change – but at different levels of intensity. The role of your cultural strategy is to help your company or brand find its best north in the light of all the factors that Ritson sets out. And then for the CHRO to take the culture from there.
Checklist: Three questions for leaders around purpose
- What difference would it make to your decision-making if your true north purpose was a consideration factor? Satya Nadella of Microsoft once observed that purpose should be used to bring clarity, alignment and intensity.
- Presumably, you’re already using measures like engagement, retention and productivity to monitor your people outcomes. What measures could you meaningfully introduce to monitor your purpose outcomes? Purpose is not just about what you believe. It’s about what you decide, and why – and how your people feel about those decisions.
- Could purpose be the missing factor in motivating your culture to successfully lift performance to the next level? As Indra Nooyi, the former CEO of PepsiCo once said, “We do better … by doing better”.
How to find your north star purpose
As per earlier, identifying your true north purpose is pivotal to forming a Principled Culture. Alongside your vision, role in market and values, your purpose drives your culture’s shared belief system. It provides a motivating and shared focus. This is particularly important if you’re competing in rapidly evolving markets.
If your leadership team hasn’t defined its north star purpose, our Culture-fy strategic session is an accelerated option for people leaders and decision makers to enable the wider brand culture to purposefully thrive.
In less than a day, we can help you clarify and broadly articulate what a true north purpose should look like for you, and start a conversation about ways for CHROs and other leaders to embed that idea (and its implications) into the wider business as a key decision filter. Please contact us to find out more.
Acknowledgements
This article has been significantly updated since it was first published.