Last week I shared our story about integrating purpose into Guusto through a partnership with the One Drop Foundation. So this week I’d like to share everything we’ve learned about purpose, in an effort to help you build it into your organization.
What is Purpose?
A firm’s purpose is its reason for being in business. WHY the company exists. It’s an expression of how the firm improves the lives of those it sets out to serve.
Mark Zuckerburg, in his 2017 Harvard Commencement Speech, said: “Purpose is that sense that we are part of something bigger than ourselves. Purpose is what creates happiness."
Purpose forms the foundation of the company’s brand and culture. It communicates what your organization believes to both customers and employees. Customers who believe what your company believes will identify with your brand, and employees who believe what your company believes will work together to deliver a product or service in line with brand promises.
A company’s purpose is different from the company’s Mission (HOW you accomplish your purpose), or Vision (WHAT you hope to accomplish). Tesla provides a great example:
Purpose (WHY): Accelerate the world's transition to sustainable energy.
Mission (HOW): Bring compelling mass market electric cars to market as soon as possible.
Vision (WHAT): Become the most compelling car company of the 21st century.
While Tesla’s mission and vision will help guide employee actions and decisions, it’s purpose that shows employees how they are making a difference and gives them a sense of meaning. This can have dramatic impacts on the business.
How Purpose can Impact your Business
When employees understand their jobs' bigger purpose, they tend to be more productive, stay engaged, and are better at decision making.
A report from the EY Beacon Institute showed that purpose-driven companies generated higher revenue and performed better at transformational change. About 63% of executives surveyed also said that having a sense of purpose allowed for greater innovation, as well as enabled people to better disrupt or respond to disruption.
Effectively communicating purpose-driven strategies to your employees can help facilitate growth into new market segments, by allowing teams to properly evaluate long-term goals, and create holistic value propositions.
Also, providing purpose can have a significant impact on attracting new talent. A study by Cone Communications showed that Millennials prefer working for companies that are committed to social or environmental causes.
Finally, companies with a clear purpose at the center of business activity can better engage other stakeholders - customers, investors, the environment, local and wider communities - to stay relevant in a competitive world.
How to Integrate Purpose1. Identify and articulate purpose
While it seems obvious, the first step is to clearly identify the company’s purpose and write a Purpose Statement. Start by asking some questions about the business:
- Why was the business created?
- Why are we in business?
- Why are we doing what we do?
- Why are we good at what we do?
- How do we improve lives?
- How do we make the world a better place?
These questions can help you understand the big picture goals of the organization, and form an impactful Purpose Statement that is short, easy to understand and shows all stakeholders how the company strives to make a difference in the world.
Just like the company’s business model, the purpose may need to be updated, or sometimes redefined as conditions change. That's totally fine, as long as the rebranding is genuine and serves as the North Star for the company and its employees.
2. Train leaders to share purpose
Your leadership team plays a big role in communicating the organization’s purpose. Allocate time and resources to make sure your leaders understand and align their actions with the company’s purpose.
It is important to differentiate leaders from those who lead your people - a leader is someone with power and authority, whereas those who lead will inspire people around them to be better. Train your leaders to lead by weaving purpose into team meetings, sharing results, and showing team members how minor tasks make an impact.
3. Include purpose in hiring and onboarding
If you just hire people that can do a job, they’ll just work for a paycheck. Hiring candidates that share the organization’s beliefs will ensure employees care about why they come to work, and strive to achieve great things.
Ask candidates how they connect to the company’s purpose during interviews. Ask them to share life stories of how they may have demonstrated actions in line with the company’s purpose.
The company’s purpose can be reinforced by including it in onboarding and training programs, to really show new employees what their efforts will ultimately translate into.
4. Connect employees with purpose
Employees must be purpose-aware before they can be purpose-driven. But it’s more than just putting the Purpose Statement on the wall. You have to show employees how their actions are making a difference in order for them to feel a sense of purpose. Here are some ways to connect people to the company’s purpose:
- Be transparent and share results on how the company is performing to meet its purpose. This can give people a better vision of long-term goals, and feel better about the work they are doing.
- When delegating tasks, don’t just tell people what to do, but instead explain why it matters.
- Share stories in team meetings about how individuals helped the company achieve its purpose.
- Performance reviews provide an opportunity to show employees how their efforts made an impact.
- Recognize and/or reward people that demonstrate a commitment to the company’s purpose, or through their efforts, help the company fulfill its purpose.
- Provide the opportunity to have first-hand experiences making a difference (e.g. meet with delighted customers, sponsored volunteer trips).
Purpose is Worth it
Organizations that provide a sense of purpose will attract better people, increase employee engagement, and inspire better performance. They do this by identifying purpose, training leaders to share it, including it in hiring, and connecting employees with it.
Purpose also takes commitment! For example, CVS Health, one of the United States’ largest pharmacy chains, decided to stop selling tobacco products due to a conflict with its purpose of “helping people on their path to better health”. Although this decision led to billions of dollars of revenue loss, their choice has opened opportunities to offer quit-smoking programs and had massive positive impacts for their brand both externally with customers and internally with employees that were no longer required to sell tobacco products. Bottom line - purpose is worth it!
In next week’s post, I will share the story of why we scrapped our Core Values and started from scratch. It was not a smooth process, but it has paid massive dividends, and has laid the foundation for our company to succeed. We’ll cover:
- How we realized the core values weren’t working
- The process we followed to develop new core values
- How we integrated the new core values to build culture
Hope you’ll join us for the discussion. Have something you want to learn more about? Let me know in the comments below or connect with me on Linkedin.
Muucho Guusto :)