Introducing The Purpose Matrix
This piece follows on from Lewis’ most recent article In Defence of Purpose. In this secondary piece he outlines the Purpose Matrix, developed by Purpose Union to help organisations understand and identify where they are on their purpose journey.
The Purpose Matrix is a framework that allows us to analyse why many businesses have struggled to balance competing agendas when engaging with social issues. Our core belief is that businesses are more successful if they have a reason for existing that is linked to societal benefit therefore we use the Purpose Matrix as a way of helping clients identify where they are on this journey.
An organisation's position in this grid presents them with different levels of risk and opportunity
'Islands', in the bottom left quadrant, are organisations with limited or no integration of purpose. Their levels of innovation in response to social and environmental challenges are minimal, as is their advocacy and involvement in broader social debates and agenda-setting. At one point, maintaining this position was tenable. However, occupying this zone today represents a risk - failing to attract, motivate and retain talent, losing the competitive edge, and being caught off-guard when issues like the Russian invasion of Ukraine or Roe v Wade pose questions that the leadership must answer.
Then there are the 'Walls'. These are companies with a robust internal understanding and integration of their role in society. The leadership supports the adoption of a purpose-driven mindset, and business functions understand how this shapes the strategy of the business. However, they fall short when it comes to using their purpose-driven culture to shape the world around them. Their engagement with societal issues like homelessness or water insecurity is tactical rather than strategic, sporadic rather than sustained. They also participate passively in wider conversations about social progress. They are often slow and reactive, rather than proactive, missing opportunities to effect change and be a wider force for good.
It is enlightening to see businesses with a strong culture of purpose realise the potential gains from being bolder
Many companies in this zone found it challenging to respond to the murder of George Floyd in a sustained and impactful way because that event demanded that organisations embrace anti-racism - the proactive identification and elimination of racism by changing systems, organisational structures, policies, and practices. It is enlightening to see businesses with a strong culture of purpose realise the potential gains from being bolder.
‘Flags’ embrace being part of the local, national, and global solution. However, their public positioning and internal practices and culture are often misaligned. Decisions about external facing activity are often not made or justified with reference to a purpose, sometimes due to few within the organisation being able to articulate why the business exists. Those external-facing initiatives are often the pet projects of a select few individuals.
Catalysts demonstrate a profound commitment to purpose, both internally and externally
This is where ‘Catalysts’ enter the frame. These companies demonstrate a profound commitment to purpose, both internally and externally. They possess a clear, well-understood purpose that is embraced at every level and intrinsically linked to their business functions. Catalysts are at the forefront of innovation to address social and environmental challenges and their strategic advocacy is centred around a hero issue. They don't just participate in the national or global debate; they shape it. They recognise the need for collective effort to solve problems and, as such, adopt a coalition-based approach.
Understanding the opportunities and threats faced by Catalysts, Islands, Walls, and Flags provides a useful way of analysing today's landscape because this grid is dynamic rather than static. As catalysts seek to defend their position amidst higher standards from the public, they have rightly sought to fill gaps in moral and practical leadership on social issues that matter to their business. As stakeholders have grown more suspicious of purpose-washing, greenwashing, and diversity-washing, they've also recognised the need for greater consistency.
Companies aiming to enter the catalyst zone will inevitably come into conflict with defenders of the status quo
This is why a bank that might champion the potential of everyone and affirms a commitment to anti-racism may consider transacting with a customer harbouring racist views wholly inconsistent (even if the application of that principle may be debatable in specific cases). This is why companies aiming to enter or remain within the catalyst zone of opportunity will inevitably come into conflict with defenders of the status quo, both inside and outside politics.
This grid also gives us a picture of where the sceptics of this agenda would like companies to stay in. There are renewed calls for companies to go back to being Islands. Following the resignation of Alison Rose, CEO of NatWest, several commentators quickly voiced the view that all businesses should stick to their core operations and nothing else. Unfortunately, this perspective fails to appreciate the risks of inaction and is disconnected from the shifting expectations of a growing group of core business constituencies - their people, customers, and investors.
The brand's leadership was not as committed to the purpose agenda as they should have been
This grid also helps to explain why we’ve seen brands recant in the face of criticism. We've also seen what happens when brands such as Bud Light sidestep the internal work and become Flags. An opportunity arose to include trans voices in their marketing, arguably aiding in shaping perception and improving awareness among their customer base. However, when faced with some pushback, they retreated. The brand's leadership, it seems, was not as committed to the purpose/inclusion agenda as they should have been.
Unsurprisingly, I believe that all companies should aspire to be catalysts. It is, and will continue to be, the zone with the most opportunities to win as a business.
Lewis Iwu, Founding Partner, Purpose Union
This is an adapted version of Lewis Iwu’s letter ‘In Defence of Purpose’ which can be read in full by downloading this PDF.
Want to talk to us about how we could help you find and action your social purpose? Get in touch with Lewis Iwu at lewis.iwu@purposeunion.com