New Zealand research finds 95 per cent of organisations have a defined purpose, but employee understanding trails leadership alignment
Nearly every New Zealand organisation now has a clearly defined purpose. New research suggests it is much better understood in the boardroom than across the wider workforce.
The Purpose When Tested report by Hum Consulting, found 95 per cent of senior leaders surveyed said their organisation has a clearly defined purpose. Another 88 per cent rated purpose as important or extremely important to performance. But while 95 per cent agreed their senior leadership team was aligned around that purpose, only 68 per cent agreed it was understood across the organisation.
Market Research NZ carried out the research independently. It ran structured telephone interviews with 41 senior leaders between August and September 2026. Respondents included chief executives, managing directors, general managers, people leaders and board members from manufacturing, construction, professional services, agriculture, transport, energy, health and government.
Mat Kearney, founder and partner at Hum Consulting, said the gap stood out.
“The one thing that was a bit of a gap that we identified is that purpose is often held more closely and dearly at the senior levels of the organisation. It’s not really as well disseminated and understood and latched onto in other parts of the organisation as you get down to your staff,” he told HRD.
Why purpose matters during restructuring and change
Thirteen of the 41 organisations had been through a restructure or significant change in the previous 12 months. Twelve of those 13 leaders, or 92 per cent, rated purpose 4 or 5 out of 5 for helping guide decisions and keep people engaged.
For Guy Stewart, managing director of Skope Industries, purpose is a competitive necessity.
“We’re a manufacturing business at the bottom of the planet, with no economies of scale and no proximity to markets, competing against global players who have all of that. So we simply have to be better. We have to live our purpose, otherwise we’d be trying to compete on terms that just aren’t a strength for us,” Stewart said in the report.
Kearney said hard times are the real test. “In good times it is easier to spend time on the bigger picture, with big mission statements and glossy marketing material, but when you are staring down the barrel of tough decisions, how easy is it to stick to your purpose and does that resonate with your people?” he wrote in the report.
He gave the example of Auckland not-for-profit Altus Enterprises. Altus creates jobs for people with disabilities and makes Will&Able eco-cleaning products. In May 2020, 1News reported that 137 staff had been made redundant as COVID-19 hit. Orders surged after the company’s situation was aired on television.
“Consumers responded not just to what the product is, but they responded to why the business exists,” Kearney said.
Kearney also said purpose still has to compete with vision, mission and values for attention. “To be honest with you, I think it’s still unfortunately quite hard yards. The concept of purpose, I think, still kind of is struggling to find its place sometimes in organisations that have got vision, they’ve got mission, they’ve got their values. Do they also need a purpose?”
The findings back up earlier HRD reporting on maintaining employee trust and morale through restructures and redundancies. In that reporting, clear communication about direction was central to keeping people engaged.
Purpose as a talent attraction and retention lever
Leaders gave purpose an average rating of 4.1 out of 5 for attracting and retaining talent. Thirty of the 41 respondents rated it 4 or 5. No respondent expected purpose to become less important over the next three to five years. Sixteen expected it to grow in importance, and 25 expected it to stay the same.
“People are drawn to belong to something that has more meaning and significance, to be part of something that’s important to them, and organisations can and should offer that,” said Simon Batters, general manager people and safety at The Lines Company, in the report.
Kearney said the goal isn’t to make every employee’s personal purpose match the organisation’s.
“It’s not exactly about aligning an individual purpose to an organisational purpose, but it’s an organisation being clear on why it exists and then individuals being clear around how does that support them and their own purpose and what they’re about,” he said.
“That can help them choose to decide, or for some people it might help them choose to leave if they’re not really connecting with that. And I think that both results can be good for a business if you’ve got people making those decisions.”
That matters for employers who see why hanging onto existing talent is HR’s real competitive edge in a tight market.
How leaders can close the purpose gap
Kearney said the research shows leaders believe in purpose but are falling short in passing it on.
“I think if anything, the research has pointed out to us that while they might believe it, they’re not doing a great job at really telling that story,” he said.
“I think leaders have got a critical role to play in helping tell a story to their people of why their work matters and why the work of the organisation matters. I think wired into all of us at some level is, ‘I want to do something that makes a difference. I want to do something that is having a positive impact.’”
The report sets out five connected actions:
- defining a purpose that creates value
- using purpose to set priorities
- holding leaders accountable for living it
- building it into everyday work, including recruitment, onboarding, performance and reward
- measuring and celebrating its impact
It suggests simple decision tests for trade-offs. Examples include “Does this choice align with our purpose?” and “What will we stop or deprioritise to make this possible?”
Organisations don’t need to tackle all five at once, the report says. A practical starting point is to find where the gap between leadership intent and employee experience is widest. For managers looking for practical steps, HRD has also looked at how to help your team find purpose at work.
For Kearney, the business case is simple. “It’s good for your customers. It’s good for your people. And if you’re good for both of those things, then it’s gonna be good for your business in the end.”
