Simplified down to just five words or less, a Purpose sits at the heart of business transformation. Consider Google’s “Organising the World’s Information” or Apple’s “Humanizing Technology”. These are far more than just straplines. Each is a deeply-rooted value system, driving direction, energy, and alignment from the inside.
There are many advantages to defining a clear Purpose. Here are the top five:
1. Sharpen your competitive edge
Purpose enables your organisation to align everyone clearly, to remain agile and react quickly, streamlining otherwise cumbersome processes and systems, and transform as one whole entity, all focused on a singular objective. Purpose-led transformation happens fast, and what better advantage in a competitive environment than speed of execution?
2. Increase your profits
In the book Firms of Endearment: The Pursuit of Purpose and Profit, organisations with a clear Purpose are shown to have outperformed the market by a ratio of 9:1 over 10 years. Put simply, more meaningful companies drive more profit, by having a higher Purpose. Purposeful brands have also been shown to outperform the stock market by 133%, gain 46% more share of wallet, and achieve results which are twice those of lower-rated brands. This also applies for less tangible benefits, such as staff attraction and customer loyalty.
3. Attract better people
The power of Purpose can also make the difference when attracting better talent. A smart millennial graduate is hardly likely to desire a job at a traditional bank over the chance to work with Google. Why? Because helping to organise the world’s information is inspirational, whereas making wealthy people wealthier simply isn’t. Today, organisations are witnessing a generational influx that is entering the workforce with Google-type values of Purpose over purely traditional motivators of money and perks.
4. Increase loyalty
A classic case study for brand loyalty is Harley-Davidson. Does this company in fact build the best motorbikes? It doesn’t matter. People buy into this brand by the million. They seek to work for the organisation, and simply enjoy riding the “hogs”. Because they feel a sense of belonging to something much bigger than simply the idea of getting from A to B on two wheels. By fulfilling a dream of “personal freedom”, Harley have driven internal and external alignment, accelerating margins, and maintaining passion loyalty. It is no coincidence that Harley-Davidson’s logo is still the second most tattooed symbol in the world.
5. Become the best at what you do
It takes a careful mix of vision, people, and behaviour to define, align and execute a clear Purpose. At the heart of a Purpose is the goal of cultivating a culture of being the best at what you do which radiates from the inside out. When organisations organise themselves around a Purpose, they build a culture of excellence based on their shared ambition and values. You may feel your organisation has already achieved this, but having even clearer Purpose can take most businesses to an unexpected new level.
So what’s your Purpose?
Can you articulate your organisation’s essential reason to exist, in five words or fewer? If not, it’s time to examine and action this. A Purpose isn’t just a nice-to-know, it’s a need-to-know, in order to thrive in the competitive reality of tomorrow.
If you’d like help unlocking and defining a higher purpose, to enable your organisation to stand for something that matters and move into a new era of value-based growth, contact me for a personal presentation. Or take a look at our Purpose Constructor solution here.