Not long ago, our founder, Chris, wrote about her love/hate relationship with Purpose. Because there is SO much literature and research on the concept of Purpose now – from the 2002 Christian take in The Purpose Driven Life to Oprah’s The Path Made Clear and Simon Senek’s Start with Why, it is becoming increasingly difficult to understand what someone means when they say Purpose. We want to be clear that we believe your organization can – and should – have an organizational purpose. We’ll explain what a business purpose is and isn’t, and how Purpose-Led companies are different from their peers.
Your organization’s Purpose statement explains the organizational why, its reason for existing.
What Business Purpose Is NOT
Sometimes it is easiest to define an ambiguous concept by starting with what it isn’t.
Your Business Purpose is NOT the same as your personal purpose.
Speaking to the Founders/CEOs/Presidents/Executives here – while your organization’s Purpose should align with your personal purpose, they should not be the same. To build a Purpose-Led company that continues to operate purposefully after your exit, the Business Purpose needs to be distinct from your own. Your personal purpose is important! It will inform your leadership style. But the Business Purpose provides the overarching “why” for the organization. There are plenty of examples of an organization’s Purpose being too closely tied to its founder or CEO. Once that person makes their exit, the business begins to lose its soul, and falls into a steady decline (sometimes to make a recovery when said leader steps back in).
Purpose is NOT a tagline or marketing slogan.
Your organization’s marketing exists to serve a function that (we hope) is based on departmental and business objectives. In other words, your marketing aims to help your organization deliver on its Purpose. That may be accomplished by using your Purpose as your tagline or in your marketing. But in many instances we have encountered, a Purpose statement is not going to a) make enough sense to your target audience when delivered as a marketing message, or b) connect with your audience in a way that will achieve your marketing goals. Some organizations discover that their Purpose transitions easily into a tagline, but they are usually the exception, not the rule.
Purpose is NOT Corporate Social Responsibility.
Corporate Social Responsibility is a set of initiatives or policies put in place to contribute to society in a philanthropic, activist, charitable, or voluntary nature. These policies are sometimes enacted out of a genuine feeling of responsibility and sometimes out of a need or desire to appear ethical. While CSR initiatives can provide many benefits to a variety of stakeholders and can serve as a genuine expression of your Business Purpose, the structure of your organization’s CSR policies do not form your Purpose.
So then What IS Business Purpose?
Your organization’s Purpose statement explains the organizational why, its reason for existing. It defines the business’s distinct role served within the market and society at large, creating unifying threads between all stakeholders. It should be markedly unique to your organization but not overly specific, allowing room for organizational growth and scale and the ability to create impact. When properly implemented throughout the organization, the Purpose should inspire, generating value for the organization, and beyond.
Here are a few examples of truly compelling Purpose statements from very different organizations:
- Southwest Airlines: Democratizing the Skies
- MD Anderson Cancer Center: Making Cancer History
- Whole Foods Market: Our Purpose is to nourish people and the planet
- Zappos: Delivering Happiness
- Harley-Davidson: We stand for the timeless pursuit of adventure.
The difference between having a Purpose and being Purpose‑Led
But wait, there’s more!
While identifying your Business Purpose is an undertaking, it’s not enough to send out a company-wide email stating, “This is our Purpose,” slapping a decal on the wall, and calling it a day. Most of us can easily generate a long list of companies we know that either don’t have any clearly defined mission and values, or have a mission statement, but don’t as an organization embody any of the principles it outlines. In order for your organization to really reap the benefits of your Purpose, you have to live it. You have to put your money (and your actions) where your mouth is.
Implementing your Purpose is more than we can easily cover in a blog post, but in short, it needs to weave its way into all of your operational units, be known (and used!) by employees and other stakeholders, and be the basis for hiring/firing. Being Purpose-Led means that an organization is actively using its Purpose as its guidepost. The board of directors and executive team use the Purpose as the benchmark against which to make large decisions. Employees use the Purpose to empower them to make decisions. Knowing if their decision serves the Purpose, will assure them they’ve made the right one.
It’s worth it.
Going through the process of developing and implementing a Business Purpose provides your organization with some distinct benefits over your peers that we will highlight below:
Stakeholder Solidarity
Rarely does a business have one group of people to which it is beholden. The operations of a company impact many different people. Customers, vendors, employees and their families, investors and shareholders, executives, the greater community, and even the environment. All of the aforementioned may have a stake in the decisions the company makes. Therefore, to encompass them all, we refer to these various groups as stakeholders.
One great outcome of a Business Purpose is that it unifies stakeholders who may, in other organizations, be pitted against one another. It is no longer the executive team vs. the board or customers vs. employees or shareholders vs. the environment. The Purpose creates a clear understanding of the direction of the company. There is a unified goal to achieve. Does this mean that everyone will hold hands and agree on every point? Of course not. But employees, leadership, unions, customers, shareholders, and society will all know the Purpose. This helps to ensure that any decisions that will be made achieve that Purpose. And if they decide that the organization’s Purpose doesn’t align with their own, then they know that this is not the company for them.
Consumer Buy-In
Last month, I wrote that yes, your customers do care about your corporate values. There’s lots of data to back that up in the previous blog, so we won’t dive into it all again here. But suffice it to say that an overwhelming majority of consumers – 88% as reported in a recent study – do business with companies that have values they feel align with their own. There is a reason why people will pay more and wait longer for the purchase of a Harley-Davidson. For the consumers who buy them, a Harley-Davidson is more than just a motorcycle. The brand is the embodiment of freedom and adventure.
Long-Term Success
There has been study upon study proving that Purpose-Led organizations achieve success above and beyond that of their peers. That is not to say that organizations without a Purpose don’t succeed – they certainly can and do. But a 15+ year study by authors of the book Firms of Endearment have found that the Purpose-Led organizations in their study cumulatively outperform the S&P 500 14:1. That’s a pretty staggering number. The Firms of Endearment companies even outperform the businesses studied in Good To Great: Why Some Companies Make the Leap and Others Don’t by 6:1.
Check out the next installment in our series on Purpose for Business, Top 10 Tactics Purpose-Led Companies Should be Implementing.
Are you ready to discover what your Business Purpose can do for your company?