Learn why a purpose-driven company attracts more success and what you can do to develop your company’s purpose
If you’re a company with a purpose, it means more to your company than you, your employees, and your customers might realize. The truth is that companies without a purpose actually experience less success in comparison to those with a purpose.
Research from the EY Bacon Institute reveals that companies that are purpose-driven “are more successful in acquiring and retaining customers.” That’s a no-brainer, you might say to yourself. But this revelation is also supported by behavioral science.
People are drawn to something bigger than themselves, and a purpose mobilizes people in a way that pursuing profits alone never will. The reality is that people want a sense of purpose, and if that sense of purpose could extend into their personal lives, even better! For a company to thrive, it needs to infuse its purpose in all that it does.
If people can feel that their work is purposeful, or that the company they support is a good company, it comes full circle. This is because people don’t only buy things because it makes them feel good about themselves; they are loyal to “those they trust.” Often, a company with a purpose establishes an intrinsic air of trust between them and their customers.
A company’s purpose cannot simply be a set of pretty words, though. As the adage goes, actions speak louder than words.
What Purpose Is Not
Here are some examples of what having a purpose as a company is not and why:
Purpose Is Not Corporate Social Responsibility
Purpose Is Not Just A Mission Statement
Purpose Is Not Your Business Model
Purpose Is Not What You Sell
Don’t confuse yourself on what your company does habitually versus what you stand/fight for as a whole, year-round. If you look at the way organizations talk about their corporate social responsibility (CSR), it starts to reflect the opinion that donating a certain amount, for example, is enough.
Some companies will use phrases like “doing well by doing good” when they send out press releases about their donation to a local food bank as if that small percentage of their revenue is suddenly the justification for their entire business success.
While the act in itself is commendable, the truth is that this isn’t a purpose; it’s just a donation. Consider 2 of the 4 “is not” purpose examples:
Your purpose isn’t just corporate social responsibility.
This means that if a Big Name company has the resources to do something good for society, the likelihood of them doing that good, regardless of their practices, is high.
The reality is that a company is expected to put some of its profits into society simply because it can and if it doesn’t, it probably will come across as selfish. Sometimes, the business model of an organization may actually be in contrast to some of those causes they support.
True purpose isn’t borne out of obligation or expectation or a “we can because we should” mentality.
Your purpose is not just a mission statement.
A set of pretty words is nice, but is there more substance behind the aesthetic? We said this earlier: actions speak louder than words.
In a world where upcoming generations are more interested in the aesthetic of things rather than the substance, this could be an increasingly difficult task for companies to balance.
A mission statement isn’t wrong in and of itself, but when it’s treated like an audible aesthetic rather than something to be reached for, there is no long-term consideration, which is why its long-term effect on a sense of purpose is pretty minimal.
You want your purpose, mission statement included, to inspire a sense of meaning in both your employees and your customers. If it doesn’t inspire a sense of meaning to you, it likely doesn’t do so in others.
Click here to read more details on our last two misconceptions of a purpose-driven company (purpose is not your business model, purpose is not what you sell)
Simple Steps to Understand, Develop, and Commit to Your Purpose
An organization without purpose manages people and resources, while an organization with purpose mobilizes people and resources. The difference is in the objective.
In a publication discussing why purpose-driven companies will drive the economy in upcoming years, the point was made that purpose-driven companies succeed by “building genuine relationships with employees, granting them trust, mentoring and supporting them” in both personal manners and professional goals.
In contrast to past approaches where managers would threaten or use outdated processes like stack-ranking and performance reviews held only once per year, this new model encourages employees (and customers alike) to seek the highest levels of personal fulfillment — both at work or while making a purchase.
Understanding your company’s purpose. Suppose you don’t have a purpose yet. One easy way to understand your purpose is by asking yourself this: Why does my company exist? One article said that purpose “is an organization’s aspirational reason for being, beyond profits alone.”
Developing your company’s purpose. Put your purpose into action in an authentic way. Whether it’s by telling your story to connect at a deeper level with your consumers, regardless of who they are and where they are from, or by being transparent and accountable for everything you do, developing your purpose means honing in on authenticity.
Committing to your company’s purpose. This means that who you hire, the way you interact with your employees, how you treat your customers, your role in your community and/or society, all matter. Remember that purpose can require nurturing and revisiting. Stoke your purpose over time, revisit your core DNA, and evolve it inclusively with all your people.
More ways to unpack your purpose can be read here.
Purpose: The Soul and Identity of Your Organization
Purpose provides both a platform to build upon and a mirror to reflect its existence in the world. It articulates why an organization exists, what problems it is here to solve, and who it wants to be to each human it touches through its work.
While managing a purpose-driven company requires effort and commitment, the reward pays off. And it truly proves that “nice guys” don’t always finish last.
