CEO MONTHLY / MARCH 2025 17 Cultivating a Purpose-Driven Culture: The Cornerstone of Sustainable Business Growth Medium-sized businesses approaching rapid growth face a critical inflection point in their cultural evolution. Our experience working with UK organisations has shown that success hinges not just on what these businesses do, but on how their teams work together to achieve it—a finding that echoes Google’s groundbreaking ‘Project Aristotle’ research on team effectiveness. The Performance Flywheel Think of organisational culture as a flywheel, where each element - communication, relationships, alignment, execution, and capacity drives the next. This framework, influenced by Google’s research, reveals that highperforming teams share key characteristics: psychological safety, dependability, structure and clarity, meaning and impact. When these elements work in harmony they create unstoppable momentum. The Next Generation’s Imperative Gen Z’s emergence in the workforce has amplified the importance of purpose-driven cultures. Recent studies show that 82% of Gen Z workers prioritise an organisation’s purpose when choosing their employer, and 75% would consider leaving a role that didn’t align with their values. This isn’t merely idealistic thinking, it’s reshaping how successful businesses operate. A technology scale-up we partnered with recently discovered this firsthand. Their challenge wasn’t attracting young talent it was retaining them. By embedding purpose into their daily operations and decision-making processes, they saw retention rates among Gen Z employees increase by 40%. More importantly, these employees became their most vocal champions for innovation and positive change. Beyond Values Statements Building a purpose-driven culture requires more than aspirational statements. It demands practical and systematic approaches that connect daily actions to larger organisational aims. ‘Project Aristotle’ demonstrated that team effectiveness isn’t about personality types or skills alone, it’s about creating environments where people feel safe to contribute and feel connected to their work’s impact. Organisations need simple but effective ways to evaluate choices against their purpose, making it easier for teams to navigate complex situations autonomously. Creating spaces for honest conversation about challenges and opportunities fosters an environment where purpose can be questioned and refined, a key factor in psychological safety. Building reflection and adaptation into operational rhythm ensures culture evolves intentionally rather than accidentally. The Alignment Challenge Alignment emerges as a crucial factor in cultural transformation. When a business doubles in size or prepares for investment, maintaining alignment becomes increasingly complex. However, those who master it gain significant advantages in both performance and adaptability. For Gen Z employees particularly, this alignment between stated purpose and actual practice is nonnegotiable. They expect transparency and consistency, quickly identifying when actions don’t match words. This generational shift is forcing organisations to become more authentic in their approach to purpose and values. Building Cultural Resilience Cultural resilience (the ability to maintain purpose through change) becomes particularly important during rapid growth or transformation. This resilience stems from how deeply purpose is woven into organisational fabric. Practical approaches we’ve seen work include: • Regular purpose-focused discussions in team meetings • Integration of purposerelated metrics in performance reviews • Leadership development programmes that emphasise cultural stewardship • Mentoring programmes that pair experienced staff with Gen Z employees, facilitating two-way learning about purpose and impact The Investment Perspective For businesses preparing for investment or sale, culture increasingly features in due diligence processes. Investors recognise that strong cultures correlate with sustainable performance. This makes cultural development not just a ‘nice-to-have’ but a crucial element of business value, particularly given the growing influence of younger generations in the workforce. In service based businesses for example, PE investors can attribute as much as 70% of the intrinsic value of the company in people and culture. Getting it wrong can be costly! Looking Forward As businesses navigate complex market conditions, purposedriven cultures will increasingly separate high-performing organisations from the rest. The insights from ‘Project Aristotle’, combined with the clear preferences of Gen Z, provide a compelling roadmap for cultural development. The most successful organisations understand that culture isn’t a destination but a journey of continuous refinement. They focus on building systems and practices that naturally reinforce their purpose, while remaining flexible enough to evolve with changing circumstances and generational expectations. For medium-sized businesses approaching significant change, the message is clear: investing in cultural development isn’t just about creating a better workplace, it’s about building a more valuable, sustainable business that attracts and retains the next generation of talent. The path forward requires patience, commitment and careful attention to how different elements of organisational life interact. However, those who successfully navigate this journey create something truly valuable: organisations that don’t just perform well today but are equipped to thrive long into the future. Bio: About Kate Davis: Kate Davis is the founder of Meraki People, an organisational health consultancy specialising in team dynamics and culture change. As a 5 Voices Master Practitioner, she helps leaders and organisations harness the power of different voices to drive better performance. She is the current Paseda360 National Coach of the Year www.merakipeople.co.uk www.linkedin.com/in/ katedavisleadership https://katedavis.giantos.com/ store/5-voices Oct23629 By Kate Davis | Executive Coach, National Coach of the Year | Founder, Meraki People
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