Purpose is powerful, responsible, and fiscally smart.
Purpose. With investors increasingly focused on long-termism and corporations signing on to the UN’s Sustainable Development goals, it’s the hot topic of the moment. More and more, many business leaders view purpose as an essential tool for strategic business transformation, much in the same way a corporate brand was in the late 1990s and early 2000s. This is because when well defined purpose is an effective tool to develop much more than cause marketing, philanthropic programs, and corporate social responsibility. It also is an excellent benchmark for product development, employee engagement, stakeholder relations, sustainability, and operational policies and processes. Ultimately, purpose can help a company increase financial value as well as social impact.
Principles to Identify Your Organization’s Purpose so its Powerful, Responsible, and Fiscally Smart
Yet, brand managers and entrepreneurs alike wrestle with identifying a purpose that can act a central organizing principle. Having helped many B2B and B2C business leaders across sectors, as well as in non-profits, clarify purpose, I’ve learned that some universal principles apply, regardless of the age, size or focus of a business:
- Be True. Purpose must be true to who you are and what you do, not based on a competitor’s position, an advocacy group’s demands, or a politically correct definition.
- Be emotive. A meaningful purpose is related to your business operations yet about much more than the products and services you sell. It’s true to what your brand delivers and simultaneously taps into universal truths that emotively stir employees and customers.
- Be impactful. Developing purpose requires considering how your brand impacts people’s lives on a deeper level rather than a review of product features and benefits or social causes executives or founders personally care about. (NB: yet, if your purpose is too high order and disconnected from your value proposition, it likely will not successfully signpost product and service delivery, especially in a time of crisis.)
- Be thoughtful. Purpose sits at the intersection of the reason your business was created (your raison d’etre), the things that matter most to your customers and other stakeholders, and the way you conduct business. Identifying it may require stepping back and reviewing your heritage (for newer businesses your heritage is simply why you formed the business in the first place) and reflecting on the core competencies and values that drive business success today, as well as those that will shape it in the future. When doing this, many longstanding companies discover that a meaningful purpose has been part of their business all along but was lost over the years or not highlighted as important.
- Be inclusive. To effectively guide activities across your organization, purpose should be crafted soliciting broad input, not developed by one team or department in isolation. The passion and shared beliefs purpose encompasses mean more than the final words chosen to communicate it. When purpose reflects your organization’s driving passion, it inspires employee behavior at a transactional level and cultivates trust with stakeholders.
Need Inspiration: Some Well Known and Not So Well Known Purposes
Take for example, the purposes of some of the brands I review in my book Do Good. Each purpose is based on a universal truth, and each….
- has the power to change the way people think, feel, and act;
- reflects the sector the brand represents;
- can encompass a social mission; and
- is motivating to both employees and customers.
SunTrust Bank: “To light the way to financial well-being.”
Plum Organics: “To nourish little ones with the very best food from the very first bite.”
Forest Stewardship Council: “To meet our current needs for forest products without compromising the health of the world’s forests for future generations.”
Giffgaff: “To enrich people’s connections through mutual giving that comes from community.”
Seventh Generation: “To inspire a consumer revolution that nurtures health of the next seven generations.”
Lush: “To make a difference in the world with the choices we make as a brand: fresh and organic have an honest meaning beyond marketing.”
Socialize Your Purpose
One you’ve clarified your purpose, it’s essential to acculturate it across your organization, so it becomes a driving force in day-to-day operations, not just in big, strategic decisions. The best purpose-led businesses have collaborative and interconnected cultures rather than competitive and siloed ones.
When effectively socialized, purpose will motivate and enable managers to move beyond traditional divisional boundaries, create teams that cross borders, and build coalitions with stakeholders outside the organization, all in support of delivering meaning and impact alongside profit. And in turn, employees will embody the purpose every day in product and service delivery, through their attitudes, behaviors, and their every gesture.
Link Purpose and Operating Principles
I’ve learned over the years that operating principles are often a better way to underpin purpose than values. There’s less cynicism around them; they’re easier for employees to relate to; and, they more readily translate what you stand for into behaviors.
Operating principles link the ambitions embedded in your purpose with your organizational focus, processes, and procedures. They reflect the unique aspects of how your brand is delivered, thereby distinguishing your company culture from that of your competitors.
- Capture the spirit of your brand purpose.
- Highlight the core competencies/capabilities that are essential to delivering your purpose.
- Are simple to understand yet introduce behaviors that deliver your purpose.
- Reflect both the way your company does business and how your brand creates value.
- Communicate the experience you deliver to customers, employees, and other stakeholders.
- Engage, not constrain, employees, emphasizing what is important while leaving room to breathe. In other words, they effectively guide employees to determine the exact how-to’s on their own and are neither highly specific or prescriptive.
The Time to Focus on Purpose is Now
While defining a purpose that is powerful, responsible and fiscally smart for your brand is a challenging task, it’s increasingly an essential one for remaining relevant to customers, employees, and ultimately for delivering sustainable growth to shareholders.
Numerous studies from McKinsey, BCG, EY and others have shown that the consistently best-performing businesses have a long-term focus, which serves a purpose greater than their own self-interest. Businesses that embody a clear purpose have a clear understanding about how they impact people’s lives through the products and services they offer and how this in turn creates financial value and social impact. So, what are you waiting for? The time to start focusing on purpose is now.
If you’re interested in learning more about how to define your purpose, how to use purpose as the starting point for creating an ethos of responsibility and citizenship, or how to actualize your purpose across your company, check out Chapters 3 and 9 of my book Do Good or feel free to email me.