Have you ever been on the verge of signing the person your business really needs only for things to go quiet … and then … they turn down your offer and cease communications. Or maybe you’ve gone out of your way to coddle your emerging leaders only to be blindsided by a sudden departure.
Like an amiable break up, they might be kind and say it’s about them and not you, but it really is about you. You’re just not as inspiring as the company they’ve signed on with – the one that everyone’s talking about and gravitates towards.
Okay, so I may have exaggerated here for effect, however it will ring true to some of the acquisition and retention experiences we’ve all had. It’s a warning sign that the best and the brightest may see you as a business that hasn’t kept up with the times.
How do you create the ‘special sauce’ and become an irresistible first choice? This is where business purpose – as distinct from personal purpose – comes into its own. It’s like the perfect binding agent in the recipe for success.
Business vs Personal Purpose
The purpose statement of your business should explain why it exists – it’s the promise you make to your customers about solving their problems and improving their lives.
For example, the bionic ear device company, Cochlear, aims to “help people hear and be heard“, Sony seeks to “fill the world with emotion, through the power of creativity and technology” and Securitas is about “making your world a safer place“.
Facebook is about “giving people the power to build community and bring the world closer together” and it’s routinely caught up in the controversies of the day. There has been internal unrest over its policies and practices, highlighting that a purpose statement alone is not job done, you have to live it and your people must believe in it for you to gain the benefits.
Business purpose reflects the benefit to society you intend to create through your core business and, if done well, has many positive flow-on effects.
Purpose at an individual or personal level is quite different: many companies help employees achieve a certain level of satisfaction in their lives and it might include flexible working arrangements, improved health benefits, access to volunteering opportunities and so on. They are leaving money on the table if they overlook the inspiration and motivation that business purpose can add to their lives.
On a personal level, we can help out various causes and do some good things, but the size of core business operations at work provides next-level impact opportunities that we simply can’t create on our own.
How does Business Purpose Boost Business Performance?
A study of high growth companies by Malnight, Buche & Dhanaraj found business purpose to be central in overcoming instances of declining growth and profitability:
…as we worked with the high-growth companies in our study and beyond, we began to recognize that many of them had moved purpose from the periphery of their strategy to its core …
The authors learned from the C-suite executives in these companies that purpose helps in redefining playing fields and reshaping value propositions for customers.
For example, in redefining its purpose as “a better world for pets”, Mars Petcare expanded into pet health, a major shift from products to services for a 75-year old company. It acquired veterinary services in North America and Europe and commentators point to the clarity of their purpose as a significant factor in unifying their people during a period of major change.
The authors of Tribal Leadership find that serially high-performing companies are predominantly those where employees see themselves as part of a team pursuing a noble cause. This is interesting because it highlights that the main audience for the purpose statement is employees – if you can inspire them with your purpose then your relationship transcends a contractual one. You are adding fulfilment to their lives through their everyday work – as opposed to the giving and volunteering they do on the side. It is a powerful means for attracting, retaining and unleashing the power of the best talent in the market.
The shift in business mindset here is from a traditional one of creating profits and then doing good to one of delivering what the world needs profitably.
While business purpose provides a strong platform for performance and growth, the gap between intent and action is large. A global survey by PwC found that only 28 per cent of employees felt fully connected to their company’s purpose, and a McKinsey survey of US companies found that 82 per cent of people believed in the importance of purpose but only 42 per cent said that it had much effect.
The Trend to Purpose
The escalating importance of business purpose is occurring so fast that leaders are struggling to keep up. It wasn’t so long ago that a new purpose statement would be crafted at leadership retreat only to be set aside for another year once everyone got back to their desks, however it’s now viewed as the cornerstone for building strong cultures, earnings resilience and financial success.
Hubert Joly was appointed CEO of electronics retailer, Best Buy, in 2012 and many analysts predicted the company would fail given competition from the likes of Amazon. Since then the share price has increased 10x, with Joly attributing his success to adopting the purpose of “enriching lives through technology“.
Boards are responsible for defining, delivering and measuring purpose, and they need to build this new capability with haste, especially as investors are agitating for clarity of purpose from the companies they invest in. When the World Economic Forum and Bank of America in conjunction with Deloitte, EY, KPMG and PwC reviewed and recommended a uniform set of environmental, social and governance (ESG) metrics for companies, purpose appeared as the first item on their list of 21 key indicators.
Apart from being on-trend, business purpose is formidable in terms of attracting and retaining the best people. A strong, positive and purpose-driven culture is one of the few avenues for sustained competitive advantage.
Business Purpose Challenges
Putting purpose into practice involves a re-wiring of the corporate mindset, and here are three early-stage challenges that must be overcome:
If you are at the start of your journey your first task is to get everyone in the upper echelons of your business on the same page by illustrating links between profit and purpose. It’s helpful to openly and honestly appraise where you are at right now, make the case for change and engage your people in these conversations to start envisaging what the journey will look like.
2. Purpose Statement Review
Many companies have traditional defined their reason for existence as an activity instead of an outcome. For example, a purpose of “making cars” describes an activity whereas “sustainable transport solutions” describes an outcome. The purpose statement review process also provides an opportunity to positively engage with employees and business partners. As an aside, you might find this analysis of company purpose statements to be useful.
3. Preparing People for Change
In clarifying your purpose and acting on it, some of your people may find the shift to be too much and decide to opt out of the journey – that’s to be expected with any transformational change. To reduce unnecessary loss you’d be wise to create a strong narrative and communications strategy to galvanise your people and, down the track, if you can integrate purpose into your business, expect to gain attention from the best talent in the market.
Communication is the Common Denominator
Communication lies at the heart of these challenges. As George Bernard Shaw quipped, the single biggest problem with communication is the illusion that it has taken place.
You can help your people connect the dots and open their minds to a new world of work satisfaction and opportunity that they might not have fully appreciated before. You are complementing their internal sense of purpose with an external one, increasing their stickiness to your firm.
They can be inspired on both the personal and work fronts.
Your efforts will be bolstered by a strong narrative for the transformation process and being able to talk candidly about what is and isn’t working. Your people will need to know how their role connects to your business purpose, how it impacts the decisions they make and they will want to see social proof in the form of messaging and stories you put out there.
Attracting the Best Talent
As our world becomes increasingly connected, crowded and resource strained, businesses are being held more accountable for the harms they do. Putting purpose into practice gets you on the front foot because it helps in mitigating this risk while simultaneously providing a platform for profit growth.
Whether you choose to follow this path is entirely up to you, however the trend is strong and exists for good reason, and I’d argue it is essential if you are to be taken seriously by the talent you seek to acquire and in keeping up with the future of business in general.
You can look forward to the day when the best of the best are banging down your door to get in and sign on without a second thought!
Phil Preston is the author of Connecting Profit with Purpose and Founder of The Business Purpose Project, helping individuals and organisations navigate the shift to the purpose economy. His Business Purpose Assessment tool will help you gauge where you’re at in your journey.