Effective leadership is one of the most essential factors in an organisation’s success. According to McKinsey research ¹, only 4% of CEO’s will lead an average company to become a top-tier performer, but these outstanding companies create nearly 90% of their industry’s value and 30 times more value than the next three tiers combined. So, what is the secret that distinguishes great leaders from good ones?

There are numerous factors which play a part in this formula, such as strategic decision making, innovation, adaptability and strong management skills, but in the modern workplace, many CEOs and top executives are now embracing a purpose-driven leadership style to fuel their actions, inspire their teams and propel them to success in the corporate world. To break down what this term actually means, three of the primary traits of a purpose-driven leader are explored in more detail below:

Big-Picture Thinking: Having a clear sense of purpose allows a leader to focus not just on short-term gains and profitability, but on building sustainable success for a company. The best leaders spend time thinking about how the purpose of their company factors into the big picture impact of day-to-day business operations, whether that means creating jobs in the community, improving the lives of your customers, or reducing your environmental impact.

Giving your company a purpose anchors your decisions and actions as a leader and ensures that your future choices not only benefit the organisation, but also your employees, stakeholders and the surrounding environment. This fosters a culture of ethical decision making, social responsibility and sustainable practices, creating a positive legacy that extends beyond immediate achievements.

Inspirational and Empowering: A purpose-driven leader has the ability to inspire and empower others with their compelling vision and goals. This means communicating the mission and values of the company in a way that motivates your team to exceed expectations by aligning their work with a larger purpose.

Employees who feel fulfilled in their work and that their wellbeing is cared for are much more likely to perform at a higher level, as companies with good employee engagement are reportedly 21% more profitable than their competitors ². In modern workplaces, being able to connect with your team as a leader is particularly crucial, as there is often a significant divide between employees and executives. A study from Deloitte ³ shows that 91% of executives believe that their employees know they care about their wellbeing, but in reality, only 56% of employees believe that to be true.

Able to Adapt and Innovate in a Crisis: In times of crisis, a clear sense of purpose acts as a compass that guides leaders through the various challenges they may face and helps them to make decisions that are in line with their long-term vision. Staying focused on the bigger picture and adapting your strategies to navigate obstacles effectively is crucial to not only surviving but thriving during challenging times.

Beyond simply adapting, however, keeping the company’s overall purpose in mind can lead to ground-breaking innovation. Historically, companies who have invested in innovation during times of crisis have grown tremendously afterwards. For instance, during the 2009 financial crisis, organisations that maintained a focus on innovation performed 30% better than the market average and continued to grow significantly over the next five years ⁴.

Case Study: ParkerSteel Ltd
In 2021, Dylan Alexander succeeded Guy Parker as the Managing Director at ParkerSteel, a leading steel stockholder and processor in the UK. Recognising that profitability alone was no longer sufficient to measure their success, Dylan identified the need to shift the company’s focus towards a new purpose, which included taking into consideration the environmental and social impact of their operations.

As a result, SWITCH was created, an innovative business model developed to address global issues across every level of the company through six distinct channels: Sustainability, Waste, Information, Technology, Community and Home. This purpose-driven approach in addition to a visionary growth strategy has allowed ParkerSteel to flourish despite global challenges such as the Covid-19 pandemic and the war in Ukraine. Due to Dylan’s sustainable initiatives under SWITCH and his strategic investments in people, quality products and technology, the company’s revenue has tripled over the last 3 years during what remains a turbulent time for the industry.

When asked about the secret of ParkerSteel’s ongoing success, Dylan commented, ‘Embracing purpose has strengthened our resilience in the face of challenges and increased the value we create for our customers and the surrounding community.’

Author: Shirley Carruthers - Content Creator at ParkerSteel Limited

References:
1.McKinsey Research
2.Employee Engagement Statistics
3.Deloitte Study
4.McKinsey Innovation in a Crisis