Purpose Matters

Your credit union’s purpose is the “why” behind your organization’s existence. Your purpose has power. It is the aspirational reason your employees show up to work. It is the call to action to serve your members and the community. Organizations that put purpose at the core of strategy do better. A clear purpose creates alignment throughout the organization. Purpose can guide boards, senior leaders and employees alike in decision-making, and your employees want to align with a clear unified organizational mission. Purpose provides impetus that inspires people to do even more.

Every organization has a mission, vision and values statement, and you can think of mission and purpose as synonymous. It is the sentence or two that tells everyone in a simple, clear, distinct, unique and accurate way the point of the organization. Going beyond the mission statement, there is greater strength in thinking of your purpose as even more: It’s more personal to employees, more impactful, more ambitious, more empowering and more enduring. Credit unions do better when the purpose is clear and understood to the extent that it guides strategy. Unfortunately, only a minority of credit unions effectively use their purpose as a strategic driver. The obstacles reside at the top and addressing them start in the C-suite and the board room.

Too often, C-suite and board members lack clear consensus about how to describe the purpose of the organization; they don’t concur on how to articulate it. Yet consensus and clarity around purpose, and how it applies to driving strategy, are the starting points to aligning the organization toward a strategic direction. Too often, even if a great statement of purpose exists, senior management does not communicate it effectively, broadly and consistently. And, the connection to leadership development, training, employee performance metrics and rewards is weak. Clearing these obstacles is fundamental and a basic responsibility of leadership.

Especially with the troubling effects of COVID-19, senior management must make a steely-eyed assessment of the credit union’s purpose. Economic disruption is causing organizations to reevaluate business models and some are being forced to pivot. Clarity of purpose is critical in such times, and a process to assess, refine and re-articulate purpose is called for. The process may be backward-looking, forward looking or a hybrid. When the board and senior management look backwards with fresh eyes, that “aha moment” may arise whereby the statement of purpose fully describes what has been in the organizational and cultural DNA all along. Looking backwards, purpose fits the organization’s past achievements, makes clear where a credit union came from, how it got to where it currently is and what makes it unique to stakeholders.

Alternatively, a forward-looking approach is an externally focused look into the future that takes into account the overall ecosystem available to the credit union. Leaders come to understand the potential for operating in that environment. The statement of purpose emerges as leaders ask about the trends affecting the business, new needs for members, and opportunities and challenges that lie ahead. Purpose clarifies how the credit union will pursue future opportunities. Finally, a hybrid approach may start with the existing statement of purpose, and then the board and leadership may adjust it based on the emerging realities.

Regardless of how a current relevant statement of purpose is identified, leadership’s effective communication of it is essential. Everyone must know the “why” of organizational existence. All must be clear on what the credit union wants to do and where the organization is going. Senior leadership must communicate organizational purpose with regularity, consistency and while utilizing multiple channels, and it must be cascaded through all levels of the credit union. Stories that illustrate the importance of purpose in decision-making are particularly effective when employees can envision the positive result for the member, the credit union and the community.

We have found that employees are the most important audience for messaging around purpose. When your purpose resonates with your staff, superb member service follows. Employees are more engaged when they care about the result and they know they are part of something larger than themselves. Organizations do better with everyone pulling in the same direction, and a shared purpose provides the direction. People understand why their work is important and see the value they bring.

Mission and purpose are not soft issues. They don’t belong on the wall, rather they need to become part of the culture of the organization as strategic drivers and decision-making. Those companies able to harness the power of purpose to drive performance and profitability enjoy a distinct competitive advantage.

Stuart R. Levine is Chairman and CEO for Stuart Levine & Associates and EduLeader LLC in Miami Beach, Fla.