Leadership is easy 12/26
An organisation exists to achieve a purpose
Every organisation exists for a reason. For a company, this may mean creating value for customers and owners. For a public sector organisation, it may mean delivering a service or solving a societal challenge. The purpose itself can vary greatly, but the underlying logic remains the same – an organisation exists to achieve something that individuals alone would not be able to achieve, or would achieve far less effectively.
At first glance, this may seem like a simple and obvious idea. In practice, however, it is one of the most important principles of management and one that is often overlooked in the daily life of organisations.
As organisations grow, more activities, roles, processes and internal practices emerge. Over time, these elements can begin to develop their own logic and importance. People focus on what they are responsible for, what tasks they need to complete and what results they need to deliver within their own area. At the same time, the connection between individual activities and the organisation’s overall purpose can gradually become less visible.
This leads to an important management question: are we managing activities, or are we managing the achievement of the purpose through those activities?
Activities are not the same as results
Every organisation carries out numerous activities necessary for its operation. People create plans and reports, attend meetings, improve processes, conduct training, solve problems and develop new ways of working. All of these activities can have a valid purpose. The challenge is not that organisations do too many things, but that over time the connection between activities and the organisation’s actual purpose may become unclear.
An activity does not create value by existing. Its value depends on whether and how it contributes to achieving the desired outcome. An organisation can be extremely busy, people can work hard and many initiatives can be underway, yet this does not automatically mean that the organisation is moving closer to its purpose. The real outcome depends on whether different activities form a coherent whole and support a common direction.
This is one reason why organisations sometimes find themselves in situations where people are doing their work well, but the overall results do not meet expectations. Departments achieve their objectives, processes operate and people are professional, yet the organisation as a whole does not achieve what it was created to achieve. In such cases, the issue is not necessarily a lack of capability or commitment. The issue may be whether different activities are sufficiently connected to a shared purpose.
Purpose creates alignment between different parts of the organisation
As organisations grow, the interdependencies between people, teams and activities increase. In a small organisation, individuals can often see directly how their work contributes to the final outcome. In a larger organisation, this becomes increasingly complex because an individual’s daily work is often only one part of a much larger system.
In such an environment, it is not enough that everyone performs their own tasks well. Organisational performance depends on how these different contributions connect with each other. Sales objectives, operational capabilities, financial decisions, people development and management practices cannot function as separate systems because each influences the organisation as a whole.
Purpose is the element that connects these different perspectives. A clear purpose does not only mean that people know the organisation’s strategic goals. It means that people understand how their own role, decisions and daily activities contribute to achieving that purpose. When this connection is missing, people naturally begin to optimise their own area of responsibility, and the organisation-wide perspective can weaken.
An organisation cannot be evaluated only through its individual parts
In management, there is often a tendency to evaluate organisations through individual elements. We look at employee competence, leadership quality, team performance, organisational culture or process efficiency. All of these factors matter, but none of them alone explains how well the organisation functions as a whole.
An organisation is a system where different parts influence each other. Highly capable individuals do not automatically create a capable organisation if their activities are not connected. A strong team does not automatically create a strong organisation if its work does not support the work of other teams or the overall purpose.
This leads to an important management implication: organisational development is not only about developing people. It is equally about developing the organisation as a system – the clarity of objectives, decision-making logic, accountability structures and mechanisms for cooperation. Only then can individual potential become organisational capability.
What does purpose-driven management mean?
When we accept that an organisation exists to achieve a purpose, our understanding of management also changes. The role of management is not only to ensure that people complete their tasks or that the organisation applies good management practices. The central responsibility of management is to ensure that the organisation’s activities continuously move towards the desired outcome.
This means leaders need to look beyond individual activities and continuously ask how those activities contribute to the organisation’s purpose. Do our decisions support what we are actually trying to achieve? Do the objectives of different units contribute to the same overall outcome? Do people have enough clarity to make good decisions within their roles? Does the organisation’s structure support or hinder the achievement of its purpose?
These are not only strategic questions. They are everyday management questions. Purpose is not something that is defined once a year by senior leadership and then placed aside. It needs to remain the foundation against which decisions, activities and priorities are evaluated.
The starting point of management
The purpose of an organisation is not simply one element of management among many others. It is the starting point from which management begins.
When the purpose is clear and people understand their connection to achieving it, it becomes possible to design better accountability, decision-making and cooperation. Without this foundation, even good management practices may fail to create the intended results.
The quality of management is not measured by how many activities an organisation performs or how many management practices it applies. It is measured by how effectively the organisation can connect people’s knowledge, decisions and actions in order to achieve a shared purpose.
In the next article, I will continue with the next question: What is management, and why is understanding people management alone not enough to understand how organisations function?