Why Companies of the Future Need Purpose

 Why Companies of the Future Need Purpose

“Purpose” is the new star in the economic cosmos. But what impact will this new orientation have on workers and on software development?

Just imagine it: the fifth day of your work week entirely at your disposal. You could start working on the project that you’d always dreamed of. You could get involved in social initiatives while drawing on support and resources from your employer. Or perhaps you’d like to spend time with friends and family, or simply be all by yourself.

It sounds too good to be true, right? Not at IXDS. The Berlin-based design and innovation agency believes in a 32-hour week, total employee flexibility, and a company organization free from hierarchies. And it’s proven to be quite a success. For more than 10 years, IXDS has been working with its customers – including startups and DAX companies – on future scenarios, innovative products, and novel services. 

Nancy Birkhölzer, CEO at IXDS, recently participated in the first SAP Research Round Table hosted in the Data Space in Berlin, alongside other representatives from industry, academia, politics, and associations. The panel discussed how digitalization is shaping the social, economic and ecological framework, and how this could impact people, companies, and the world of work. The panel also discussed what software providers like SAP have to do to not only meet the challenges of this dynamic environment, but to actively shape it.

With these challenges in mind, the organizational team under Norbert Koppenhagen, head of Research at the SAP Innovation Center Network, selected the new location, in which SAP collaborates with startups, and maintains its network in Berlin thanks to a fresh event and design concept. The array of topics was as vibrant as the participants present. Discussions included the new leadership culture, alternative organizational forms, people-centered service systems, solopreneurship, as well as purpose activation in companies. But why purpose activation? At the end of the day, companies all have one purpose: to generate revenue, right?

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No Place for Empty Words Without Actions

For Markus Heinen, chief innovation officer at EY and keynote speaker at the round table, it’s certainly not all about revenue. In the future, companies which are aware of their social impact will make all the difference: “Companies need to follow a purpose. Purpose is an aspirational reason for being that is grounded in humanity and inspires action,” he explains.

At first sight, it may sound rather philosophical, and have little to do with economic success. Yet social responsibility and having a credible brand promise have become key differentiating factors for companies. Thanks to Big Data, real-time reporting, and digital discussion platforms, people are constantly connected and up-to-date.

“There is no place for empty words without actions. Companies without a purpose will fail to keep pace. Only when all performance factors are rigorously targeted towards that purpose is the concept able to bring genuine added value,” affirms Markus.

But what does this all mean for employees? At IXDS, for instance, company success is measured by how the results contribute to the company’s purpose. For each project, the team decides on a project purpose, which is both derived from the overall purpose and specified for the project-related deliverables. How the employees wish to achieve this is left up to them. And the same for how long they wish to work on it.

“We don’t assess our employees based on the number of hours they work. We also don’t pay them based on their position. Everyone assumes a role in the project based on where they think they can make the best contribution. For that reason, we like to assess colleagues based on their impact, their value contribution,” Birkhölzer explains.

Dedication to the Future of Work

This example shows how it is increasingly important for companies to identify and manage non-monetary assets, such as knowledge, innovativeness, teamwork, and value-oriented conduct. Today, these factors account for 80% of a company’s value. Enterprise software must therefore be able to map not just financial metrics, but also intangible assets. It is precisely these issues that Günter Pecht-Seibert and his team from SAP Innovation Center Network are looking to focus on – in the new “Future of Work” focus area.

Günter explains his team’s ambitions as follows: “We want to develop cloud-based solutions that improve employee engagement and well-being, increase companies’ brand value, and accelerate genuine knowledge work. As a first step, we plan to help companies activate their purpose. Our long-term goal is to support companies who have not yet ventured this far, and help them transform into a purpose-led organization.”

The first two solutions are planned to be launched in 2017 with Knowledge Workspace and People Insights. A complete software suite will follow later.

The same applies for the next research round table session. The event was well received by all participants, and triggered many constructive talks. The result of the round table was the identification of promising research topics that the Research & Innovation Team from the SAP Innovation Center Network would like to tackle, and refine in additional workshops. The overarching goal: to help the world run better and improve people’s lives – yes, SAP has also defined its purpose.


Five Things to Know about the Future of Work

The experts who participated at the round table discussed many interesting topics. Here are the five key takeaways:

1. Companies should dedicate themselves to a purpose that can be globally integrated in the company, and pursued consistently.
2. The health and wellbeing of employees is the way forward to a company’s success. Recognizing, measuring, and managing these factors is a key challenge for companies.
3. Employees must have the opportunity for lifelong learning, which corresponds to their interests, and is useful, orchestrated logically, and independent from their current employer.
4. In the future, organizational structures will be less based on hierarchies, but rather on decentralized networks, which push beyond company boundaries, and create added value.
5. This means that companies will need software tools that can be adapted as required. The applications of the future will enable flexible problem solving, make collective knowledge accessible in organizations, and allow companies to combine data from various internal and external systems.


Günter explains his team’s ambitions as follows: “We want to develop cloud-based solutions that improve employee engagement and well-being, increase companies’ brand value, and accelerate genuine knowledge work. As a first step, we plan to help companies activate their purpose. Our long-term goal is to support companies who have not yet ventured this far, and help them transform into a purpose-led organization.”

The first two solutions are planned to be launched in 2017 with Knowledge Workspace and People Insights. A complete software suite will follow later.

The same applies for the next research round table session. The event was well received by all participants, and triggered many constructive talks. The result of the round table was the identification of promising research topics that the Research & Innovation Team from the SAP Innovation Center Network would like to tackle, and refine in additional workshops. The overarching goal: to help the world run better and improve people’s lives – yes, SAP has also defined its purpose.