It's not easy to predict what the future labour market will look like. Most think, however, that it will be more complex and intricate than today. Leaders will have to deal more extensively with greater diversity among employees where the majority are highly educated, demanding and hungry for knowledge.

The world is constantly changing. It always has, but it's an undeniable fact that the changes are taking place more quickly now than they used to. The world today is characterised by innovation and disruptive brands , while at the same time we are seeing millions of young people dreaming of fulfillment and a desire to help improve the world through their jobs. Being a leader has become a balancing act at a high level.

So what is needed to lead the companies of the future?

There is no clear response to this, but most experts indicate that the managers of the future will be more hands-on, inclusive and open to the notion of including more employees in decision-making processes. It will be more important to get the entire organisation on board in order to ensure effective implementation.

The companies of the future will be less hierarchical than before, and effective internal communication will be critical in order to get people on board when important decisions have to be made. This will require a high level of social intelligence and empathy from leaders, capable of balancing the interests of the owners and the board, and the requests of customers and employees.

In this article, we look closely at:

Why the primary task for managers should be to ensure that the business has a meaningful purpose.

We argue that leadership based on a strong purpose results in better management tools, decision-making capacity and the power to get things done and increased effectiveness.

We explain why purposeful managers are not like traditional managers, who are usually most concerned about the bottom line and short-term financial gains: instead, they are more concerned with creating positive effects that are channeled back to the local surroundings to the benefit of a variety of stakeholders.

Why there is a move away from profit for profit's sake and instead we are seeing a focus on creating long-term value by caring for a wider range of stakeholders for companies.

Who the leaders behind this transformational change are.

We ask when Norwegian companies will get on board and realise how important it is for the management to make the most important strategic decisions on the basis of a meaningful purpose.

We ask when the management will understand that being unaware of why they are in business, leads to employees walking on a loose tightrope. People may lose their footing and fall. Last but not least, we share with you five competitive advantages that can be achieved by your company by being anchored in a clear purpose.

The fact that the world is constantly changing is nothing new. This has always been the case, but the undeniable fact is that the changes are taking place more quickly now than before.Technological progress is taking place so quickly that none of us is able to maintain a constant overview.

In a world that is characterised by innovation, disruptive brands that grow massively almost overnight and millions of millennials who dream of fulfilment and helping to improve the world through the hours they spend at work, being a manager has become a balancing act at a high level.

According to a report from EY Beacon Institute , having a defined purpose can help managers to adopt an overall approach, see the big picture and plan for the future rather than wasting energy on short-term firefighting. This report also emphasises the fact that leadership anchored in a purpose avoids the pitfalls associated with a silo approach, and instead aims to achieve a holistic approach in tune with the more intricate global enterprises of the future, full of individualists who are concerned with ensuring that the company helps to create positive changes in society.

What is a leader’s most important job?

According to EY Beacon Institute and Saïd Business School at Oxford University, “Purpose” has become a much discussed term among the world’s top leaders over the past few years. Having a clear purpose is viewed as part of the development which involves companies being more concerned with creating growth for parties other than themselves, and where concern for the environment is on the agenda.

Harvard Business School offers a leadership programme which helps companies and managers to develop leadership anchored in a purpose, which is known as leadership purpose. This institution is able to document the fact that leadership based on a meaningful purpose is of the utmost importance when it comes to creating growth and having implementation skills. According to HBR, this form of “purpose to impact” is the most important ability you need to develop in order to succeed as a manager.

In the Mission Purpose Report 2017, we investigated 100 of Norway's leading brands in the spring of 2017 and found that just one in three had defined their purpose. This should provide food for thought for Norwegian business.

Why do the most successful managers find strength in a purpose?

When the oil disaster happened in the Gulf of Mexico in 2010, this was incredibly bad news for the environment; but it also caused major problems for the oil and gas companies drilling there. Naturally, the authorities put a stop to all further activities for the companies that were working in the area, and it was not long before the legal actions against authorities and among the companies themselves began to accumulate. However, Noble Energy had a different approach.

According to Chuck Davidson, the former CEO of Noble Energy, they decided to work together with the authorities in order to implement new requirement specifications for drilling equipment in order to prevent future oil leaks.

Although they originally just wanted to work to prevent future natural disasters, their attitude also had another positive effect. Noble Energy’s desire to cooperate with the authorities turned out to be profitable in that they were the first oil company given permission to resume their activities in the region. How could this happen? According to Davidson, this was linked with Noble Energy’s purpose statement: “Energizing the world, bettering people’s lives”. This was something that he was prioritising in his position as a recently appointed CEO. Davidson is of the opinion that a meaningful purpose is invaluable as an anchor for managers.

When leaders leverage purpose, it creates a competitive advantage that’s difficult or even impossible to replicate.
- Chuck Davidson, former CEO of Noble Energy

In Mission’s survey, we found that Norwegian companies with a meaningful purpose had 41.8% greater profitability on average, compared with companies without a purpose. Although leadership involves more than just defining the company’s purpose and bringing it to life, defining the company’s purpose is undoubtedly the most important job for any manager.

Without a purpose, managers do not have the necessary anchor and so they have less direction and management capability when changing agendas come to the fore. Basing your approach on the company’s visions or core values is not as significant and does not go as deep as a purpose, nor does this approach have the same strength as a purpose.

Amy Bernstein, editor of Harvard Business Review, could not help but notice HBR’s purpose statement when she took up her position: “To improve the practice of management in a changing world”. She says that this purpose acts as her guiding light and helps her to make important decisions.

"Purpose helps leaders make brave decisions"
- Amy Bernstein, editor of the Harvard Business Review

Scott Snook, who teaches at Harvard Business School, agrees that the managers of the future have to find security and drive in a meaningful purpose. It is precisely this anchor that provides the necessary backbone in a world characterised by technological progress, political uncertainty and disruptive brands.

Five advantages for companies with a meaningful purpose

1. Significant . The company has a direction that is perceived to be more genuine, and it runs deeper. IKEA’s purpose is "To create a better everyday life for the many people". This is inspiring not only for employees, but for customers, suppliers and investors as well. In fact, it would be hard to find anyone who can disagree.

2. Steady . When a company has a purpose that is known throughout the organisation, this is the glue that binds employees together. Managers who are able to implement the purpose effectively ensure that departments such as HR, marketing and communication work together so that there is unity between the public face presented by the company and the day-to-day operations of the company on the inside.

3. Future-oriented . Purpose is here to stay. The millennium generation and generation Z have grown up caring about one another. The whole world is just one tiny Google search away, and companies that invest in young people are investing in sustainable development.

4. Credible . All companies have to earn money. But if they are to be believed and taken seriously in today’s world, wanting more than this is absolutely essential. Not only does Nike produce cool sportswear and trainers, it also says that anyone can work out no matter what their body shape, age, skin colour or sexual orientation. You do not need to be an Olympic champion – just be yourself. To bring inspiration and innovation to every athlete.

5. Profitable . One not insignificant point is that focusing on purpose pays off. Our 2017 Purpose Report documents the fact that Norwegian companies with a purpose have no less than 41.8% greater profitability than companies without.

It should not come as a surprise that we focus on purpose at Mission. This is been on the agenda for a long time in countries such as the US, and now we are gradually seeing Norway and Scandinavia following suit. Even so, we are trailing behind.

At present, business in Norway needs managers and leaders who are not only concerned with the bottom line, but who are capable of thinking big, having grand visions and staking out a meaningful direction for the company going forward. Such managers will result in more companies that do their own, unique thing and define their purpose. When we are able to document the positive effects of this, including the financial benefits, this will provide clear encouragement to business leaders to do the necessary and define their purpose, bring it to life in their leadership style and propagate it throughout the entire organisation.

We guarantee it will be worth the effort.

Sources
The state of the debate on purpose in business, EY Beacon Institute
Why the best CEOs consider purpose before profit, Forbes
From purpose to impact, Harvard Business Review
Millennial careers 2020 vision, Manpower Group