Can purpose driven organisations scale and expand without compromising their purpose?

Over the last few months,  I have met some wonderful people running extraordinary organisations with authentic purposes, to benefit a community, a cause or a place. I’ve met with organisations which are working to protect biodiversity, those focused on upliftment of indigenous communities, others operating as aggregators between urban consumers and rural producers, some focused on regenerative farming or promoting traditional ingredients and many others working towards similar causes. They are businesses and yet, they are all truly purpose driven; they are not driven solely by economic exchanges. They stand for something more aspirational. The founders and their teams have an immense sense of meaning, giving them the strength to overcome all odds for the sake of the cause and their beneficiaries. 

All organisations are purpose driven, one might say. Yes, all organisations set a mission statement when they start, which encapsulates what the organisation is trying to achieve through their actions. Unfortunately, for a variety of reasons, most of them are unable to follow through. The mission statement becomes a set of words with no meaning. 

When a founder runs an authentic purpose-driven organisation, they often find themselves at a crossroad - can the higher purpose remain true within the economic realms of the firm or, does one have to be compromised for the other? How can these organisations grow - and grow they must - so that their impact to the communities and their causes can multiply, and yet, remain true to their purpose. 

We believe it is possible to do both. Founders can develop distinctive organisation capabilities that can move the organisation from small to scale. 

Achieve growth without introducing complexity: Such organisations are usually founder-led and reliant on initial rounds of funding. Their main strategic priority is to capture value quickly.  However, as they mature, there are changes in what they do and also, who does what within the organisation. 80% of organisations which develop and launch a product fail to see it through to full scale-up. Usually, scaling challenges do not come from the nature of the organisation or the product but, from mismanagement of talent or due to the culture or the operating model¹. When an organisation is starting up, the founder is performing all roles - strategy, sales, product development, finance, delivery, operations - with intense, hands-on involvement across the entire process. This is a great way of operating early on, decisions are taken very quickly and executed even faster and the organisation stays true to its mission. As the organisation starts to scale, the founder will need to bring in other people and at this point, the founder will need to reassess and redefine their own responsibilities. They will need to pick the functions to own, those that are mission critical or decisions that only they must make, and delegate the rest. As they grow the team, defining roles and responsibilities, clear accountabilities and associated metrics will become essential to ensure that the team is operating with clarity and at peak performance, delivering the results envisioned by the founder. These tools provide clarity to the team and also, create alignment. Founders will have to create an operating model that is agile and can move quickly, to capture any new opportunities. At the same time, the organisation must have stable elements which keep current operations running smoothly and provide the right guardrails for decision making.

An organisation culture that is designed to support the purpose: Culture is nothing but, the collective of actions, behaviours and intentions that any stakeholder - a customer, an employee, a supplier, an investor - experiences, and it permeates the organisation. The day an organisation is set up, it starts to build a culture, whether we realise it or not. Early on, the founder will need to have their hands in everything and likely, ‘micro-manage’. Since the initial team is small and probably made up of familiar people, often friends and family, founders might not be conscious and deliberative about how they express their thoughts and emotions. Since there is practically nobody to share with, they may tend to hold information closely and make decisions unilaterally. As the organisation grows and new people join the team, cultural elements begin to get hard-wired into the organisation. This is the time for founders to think about what the culture of the organisation should be, what behaviours and mindsets will support growth and those that will prove to be roadblocks. Setting up effective ways of working, governance and feedback loops can help propel the organisation towards the right culture. The best way is to involve the team through design workshops to define the organisation’s culture. This ensure that the culture generates enthusiasm, ownership and builds cohesion. 

Scaling up leadership capabilities across the organisation: A different type of leadership capability will be required as the organisation grows. Early on, there are very few layers in the organisation, the founder will work directly with everyone and there will  little distance between the founder or senior leadership and the rest of the team. But as the company grows, so do the layers - thus requiring an intentional approach to developing leadership capabilities across the organisation. Sprints in different teams can help leaders and teams co-create leadership journeys to develop “transformation leaders” and “operational leaders”. A well defined leadership development program can also help align everyone to the vision, to growth priorities and create clarity regarding individual roles in contributing to the growth. Also, a leadership development program may not necessarily require people to step away from their jobs for days. Crucible experiences can be incorporated through action learning projects, with time set aside for self-reflection and assimilation ². This usually results in the highest personal growth.

A robust talent engine that can propel growth: One of the biggest challenges for a small organisation poised for growth is to hire for roles that don’t yet exist, and plan to fund them- particularly in a tight talent market and with evolving aspirations of people.  Founders also face another challenge. Early on, the founder interviews every prospect but, at scale, this becomes untenable very quickly.  Also, founders may find that the type of candidates they attracted while starting out is not the same that they need as they scale. On both these fronts, founders will need to articulate their talent needs and be able to communicate a clear employee value proposition. In reviewing this employee value proposition, founders will need to consider everything - roles and responsibilities, titles, career paths, compensation and benefits. Last but not the least, founders cannot underestimate the value of diversity; as the organisation grows, there is immense value in ensuring that not everyone in the company looks like the founder or the top team. 

Constant assessment of alignment between the purpose and evolving ambitions of the founder : Early on, the organisation is a reflection of the founder's aspirations, dreams and convictions. And more often than not, it is propelled forward by the founder's personal energy. Hence, it is very important that the founder take the time to pause and reflect once in a while, re-caliber their own priorities and assess whether their current strategy continues to be aligned to their purpose. Driving for growth need not mean compromising on the purpose. Many founders have taken the help of external coaches. Having an external sounding board often helps arrive at clarity. The next step then, is to set the ambition for the top team and ensure the top team is equally energised by with the vision for the future. And finally, measure effectiveness of the team and course correct as required. 

¹ Scaling up : How founder CEOs and teams can go beyond aspirations to ascent. McKinsey report, November 22

² Crucibles of leadership. McKinsey report, September 22