Anyone can hire a talented copywriter to put together all the right buzzwords in a beautifully composed symphony. But for purpose to create actual value for a business, it needs to go beyond a nicely put tagline.
The purpose of a purpose is not to make your business appear better – it is a strategic tool that can improve the efficiency of your top and bottom line by creating the focus needed to ensure further growth. How, you may ask? By attracting, retaining and aligning employees around a shared understanding of the future scenario you are trying to create.
If you ask Boston Consulting Group about the value of a well-defined and activated purpose, the answer is quite remarkable:
Higher returns
Over the course of the next 15 years, organizations using a more focused language are expected to achieve a 9% higher TSR and generate growth 10% higher than today.
More value
Over the past 12 years, brands with a strong sense of purpose have seen their value increase by 175% on average compared to the median growth of 86%.
Better results
Over the past 15 years, purpose-driven organizations have grown 10% faster than the market. At the same time, they have, on average, generated savings worth of $5,5 millions a year.
While profit is a crucial factor for the existence of any business,
the strive for profit does not provide an organization
with a sense of direction and focus in and of itself.
That simply requires a greater purpose.
It is a common misunderstanding that purpose and profit are incompatible. But they really aren’t – quite the opposite actually. While a purpose is the foundation of a business, profitability is the engine driving it forward and enabling the ability to pursue and realize a grander purpose.
It is your profitability that enables you to satisfy your shareholders, build up your talent pool, your tech-stack and your product – all of the central elements of running a business.
In addition to this, your vision, mission and purpose provides your business with a sense of focus and a long-term goal that can drive everything from culture to product development and your long-term ability to make profit.
The purpose of a purpose is never to undermine your business’ profitability. The purpose is to emphasize the positive impact your business can have on the world while generating a profit.
Profit, returns and satisfied shareholders? Definitely. Yet the majority of businesses are founded on an idea that goes beyond positive numbers on the bottom line. The purpose is found in the intersection between who you are and the need your business was established to fulfill.
The key question is why?
Why was my business established?
Why are we in a unique position to realize the market’s potential?
Terminologies and definitions are multiple and easily confused. With the purpose as a focal and permanent component, you have the point of departure for defining the more adaptable elements such as vision, mission and values.
This is how we see it:
Many leaders tend to become a bit uncomfortable when the conversation touches upon purpose, vision, mission and values. And that is perfectly alright! Finding your purpose demands the courage to look yourself in the eyes – and at your business from the outside-in. It is an exercise that exposes the gap between the status quo of a business and the management’s aspiration for the future.
So, it starts with daring to ask questions. To yourself, your employees, partners and customers. And with questioning your business’ raison d'être reason to exist.
Make sure to involve your key stakeholders in answering these questions.
01
Why was our business founded?
02
What are we passionate about?
03
What would the world (or the industry) miss if we didn’t exist?
04
What makes our employees proud to go to work?
05
What makes our customers and partners proud to be collaborating with us?
