These days it simply isn’t enough for a business, any business, to think solely in terms of revenue, expenses and profit.
The two most important groups of people for any business - employees and customers - increasingly expect more from the “corporate citizens” of Australia (and beyond).
In fact, research indicates a large proportion of the population believes there’ll come a time, probably not too far away, when businesses that think only in terms of maximising revenue and minimising expenses will, simply put, fail.
If that seems a little far fetched, consider the following…
There's so much evidence pointing to purpose and its importance to business:
according to PwC studies, nearly 90% of millennials prefer to work for a business that can demonstrate values that are similar to their own. Similarly, Deloitte found that the majority of this group looks beyond the financials of the business when choosing where to work
We could quote more stats like these but doubt it's necessary. You probably get the point.
There's a challenge in all this.
Purpose is one thing, demonstrating commitment to it is an entirely different matter. How can a business rise to the challenge and become “purpose-driven” from top to bottom?
Purpose is the popular kid in school right now...
Which is at once fantastic and something of a risk...
It’s fantastic because it’s true what they say - any publicity is good publicity.
It’s also a risk because popularity can be fleeting. That’s particularly true in the 21st century - a time when it’s easy to be distracted by the latest shiny thing.
Knowing isn't enough.
What’s become clear to us, is that there’s not too many practical insights in all the writings we’ve seen. Hints about how to go about getting your business purpose down to a few words that make sense. And most importantly, how to give that purpose “life” in your organisation.
This post is the first in a series focused on exactly that - hints and tips to give life to your business purpose.
Purpose is next to useless on its own
Too many businesses point to a purpose but go no further.
It’s not enough to simply verbalise a purpose and expect it to make any sort of impact on your business. That’s just a bunch of empty words in the end and will most likely do your business more harm than good.
As an example, one of our major banks tells us in its investor updates that its business purpose is to "back the bold who move Australia forward". We're not sure how many of the bank's staff know it, but it doesn't appear to be something that guides its behaviour - sadly, it comes across as rather insincere. You can read more about this here.
There has to be real evidence that the purpose seeps through every nook and cranny in the business. That all team members from top to bottom, longest serving to newest recruit know and understand the purpose.
Ideally, you want everyone in the organisation on board with its purpose - this is one of the key determinants of the level of employee engagement in the business. Which in turn is proven to positively correlate with customer engagement and ultimately profitability.
It also needs to be something customers (and potential customers) identify with. It helps them see your business as more than just a profit machine.
What you want is a business that’s seen to be “doing good”. Not necessarily solving one of the world’s really big problems…it can be as simple as focusing on how your business can change your customers’ lives for the better.
A great example here is IKEA whose purpose is to make everyday life better for people. Simple, straightforward and outward looking (that is, not about profit per se).
There’s mountains of evidence from around the world that purpose-driven businesses outperform the rest. So it’s an ideal to which business owners and leaders ought sensibly to aspire.
Where to start?
If you’re a bit foggy on your business purpose, the best way to truly capture (or re-capture) it is to go back to day one.
Why was the business established in the first place? It matters absolutely nought whether the business is big, small, old or new….you need to get back to the basic driving force behind the origin of the business.
Here's an example.
If you look into the history of Westpac, originally known as the Bank of New South Wales, you’d find that it was established by Governor Macquarie to "provide a stable financial institution underpinning an emerging economy".
While back in the day I’m sure the Governor didn’t talk in terms of business purpose, this is pretty close to one. And, if the bank was of a mind, it could easily be modernised to reflect today’s economic and social imperatives.
Your business might not be as big as Westpac, and if not, then it should be way easier for you to go back to your roots to verbalise your purpose.
On a (much) smaller scale, our own business is all about “creating ‘on-purpose’ businesses”. We didn’t originally talk in exactly those terms, but when we sat down to formalise our purpose, we realised it was as simple as that.
How to start?
As you may have gathered reading “where to start”, your purpose likely already exists in your business…you just might not know it yet.
But as clear as the history of your business might make things, our recommendation is to interview people across the business to hear their story. What you’ll get is a range of opinion but most likely a common theme or two that will support the history.
It’s important to do this in a structured way, with consistent questioning across the board.
Armed with all that input, step back and using the key theme or themes driving your team, draft your “statement of purpose”.
As we said at the beginning of this post, being able to articulate a purpose is one thing. Embedding it so that it truly becomes the key driver of your business is another matter altogether.
It’d be great to say this is a linear process but it’s not. There’s a heap of things that need to be done, many of them concurrently.
And that, folks, is a conversation for another day.
In the meantime...
Does what you've read make you wonder what's possible in your business?
We'd be happy to talk you through embedding purpose in your business and help you reach outcomes you probably didn't think possible.
In fact, we can't think of a good reason not to give us a call or drop us a line to start a conversation.
At the very least, why not check out some of our previous posts? There's quite a few posts on business purpose and related issues - we're sure you'll find some gems!
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