Member News
The purpose of a business underpins everything about it and drives its reason for being. It’s so easy for us to focus on what we make, sell or provide that we sometimes forget to think about the actual value, in other words, what problems we are solving for our customers.
The Oxford Dictionary defines purpose as ‘The reason something is done or created or for which something exists’. Yet how often do we take a step back and reflect on why we exist?
The late author, management consultant and professor Peter F. Drucker had a profound grasp of economics, politics, demography, geography, sociology, and psychology. He was obsessed with the responsibilities of leaders and managers. Drucker identified the importance of purpose as early as 1954.
“If we want to know what a business is, we must start with its purpose. And the purpose lies outside the business itself. What the business thinks it produces is not of first importance. But what the customer thinks he is buying and what he considers value is decisive. What a customer buys and considers of value is never a product. It is always utility, in other words, what the product does for him.”
If your team know your purpose, they can be 100% focused and at maximum efficiency. If suppliers know your purpose, they can focus on giving you exactly what you need regarding products and services. If customers know your purpose, they are more likely to provide you with all the orders for your essential products and services.
A company’s purpose goes beyond financial results; a company with a clearly defined purpose is more likely to experience growth, achieve greater customer satisfaction and retain talent.
At the World Economic Forum, EY, together with Said Business School and the University of Oxford, concluded that purpose-driven organisations tended to have better results across a variety of measures, and all recognised that purpose is a driver of innovation and transformation.
There is strong evidence to corroborate this.
· 38% more likely to experience strong growth - A Harvard Business Survey revealed that of the companies that clearly articulated and understood their purpose, 58% had achieved 10%+ growth in the past three years. Compared to only 42% of those whose purpose was not understood or communicated.
Employees, inspired by seeing a clear direction forward, can better align their full energies and resources to achieve progress toward the shared vision of achieving growth goals.
· Ability to transform and innovate - Fifty-three per cent of executives who said their company has a strong sense of purpose said their organisation is successful with innovation and transformation efforts, compared with 31 per cent of those who are trying to articulate a sense of purpose and 19 per cent of the companies who have not thought about it at all! The Business Case for Purpose
· Attract and retain talent A Deloitte survey of over 4,000 respondents* found that over half of employees (62%) consider an organisation’s purpose before deciding to join, with over a third (36%) saying that an organisation’s purpose was just as essential as their salary and benefits package.
· Customer loyalty and employee satisfaction - Harvard Business Review conducted a global survey of 474 executives and found that most believed purpose matters. Eighty-nine per cent said a strong sense of collective purpose drives employee satisfaction; 84 per cent said it can affect an organisation’s ability to transform, and 80 per cent said it helps increase customer loyalty.
· Health and psychological benefits - Having a clear purpose has many benefits to a business, and there are health benefits, too – Forbes reports that when people have a greater sense of purpose, they have less incidence of cardiovascular disease and lower mortality, experience less loneliness and make better lifestyle choices.
A clear core purpose is the glue that holds everything together. It connects your team, provides structure and gives everyone a common drive towards shared goals.
We all crave purpose in our lives. Whatever level of work people do, it is crucial that they feel it is meaningful and worthwhile.
A strong sense of purpose can be central to our psychological well-being – keeping us fulfilled and motivated. And purpose aids the resilience needed to meet challenges.
How to find your purpose
Stay true to yourself and remind yourself of why you are doing it. Take a step back from the day-to-day business and reflect on what drove you to set your business up in the first place. Ask yourself? Why am I doing this? What do we do? “What is the benefit of this?
Reach out to your best customers and ask them what it is they value most about what you do. Often the things we think are most important to our customers are not the things they value most. Once clear, you can focus your efforts accordingly.
Seek the input of the people you want to engage – your team. Ask your team to work with you to create a compelling and engaging purpose.
Bring it all to life – make it a living, breathing influence on everything you do. And remember to celebrate when people deliver on the purpose.
Connect everyone to it, make sure everyone has a clear understanding of how their role contributes to the overall purpose of the business.
Create an open and authentic culture where everyone can come forward with new ideas. Hold two-way reviews on a regular basis and stay passionate about the company’s purpose.
Your Core Purpose should come from a mix of what you love, what you are good at, where there is a customer need and should be the reason your business exists.
