Our study of the month May
A study by Kienbaum and Human Unlimited
Kienbaum (2020), Kienbaum Institute at the International School of Management (ISM) in Dortmund Study of more than 1,300 employees
Corporate Purpose – a key HR trend that not only reflects the “soft facts” of a company, but also delivers added economic value. As Kienbaum and Human Unlimited can prove in their study. Changing value frameworks are leading to an increasing understanding of organizations as part of society. Which in turn leads to the higher importance of developing a Corporate Purpose (CP). What is meant here is the raison d’être of an organization – beyond profit-making. Companies “should create ecological and social added value. The Purpose refers to this and in this sense shows the fundamental goal of an organization. Strategy and business model should go hand in hand with the CP, but according to study results, HR also has a decisive impact on the implementation of a CP in an organization if the purpose is to be integrated into the thinking and behavior of employees in the long term.
Overall, the results of the study prove that, in addition to a still rather diffuse state of CP in organizations, it is clearly perceived that Purpose is a management matter and is controlled top-down. Positive effects of a sustainable CP were measured. Among other things, on factors such as performance, customer and people issues such as a positive change in employee satisfaction and employer attractiveness.
In addition, Kienbaum and Human Unlimited focus on how HR’s contribution as an “organization shaper” can help create a corporate purpose. A deliberate approach is relevant here, as the CP must be “brought to life by people” in order to ultimately bring about a positive effect and benefit for companies. The following processes are applied
- Strategic HR processes
Because the HR strategy follows the corporate strategy and thus also the Purpose, the involvement of HR is already relevant in the development of the CP. The value aspect provides the framework for an organization’s overall value framework and leadership mission statement. Here it offers itself e.g. Establish KPIs to measure CP effectiveness as well as build an employee base that shares the company’s values.
- Core operational processes
These include employer branding, recruiting, diagnostics, performance management, compensation and training [&] development. In all these areas, the involvement of Purpose is essential. To create a lasting impact: for example, in external communication through employer branding or the development and attention to the purpose fit of candidates in diagnostics.
Conclusion and outlook:
The design and success of an organization depends largely on the people who belong to it. HR has a fundamental responsibility and involvement in the development, implementation and maintenance of the Purpose. Collaboration between corporate strategy, which is followed by HR strategy, corporate communications and HR as a business partner should be defined and driven forward here as a matter of course.
You can download and read the full Purpose study here.