Your purpose as a business owner is critical. It shapes how you work on a day to day basis and how your company is perceived.
But in and of itself, having a purpose is not good enough. You have to be useful too.
First of all, we need to understand exactly what purpose means. The Chartered Management Institute defined purpose as “an organisation’s meaningful and enduring reason to exist that aligns with long-term financial performance, provides a clear context for daily decision making, and unifies and motivates relevant stakeholders.”
Let’s break that down.
- “an organisation’s meaningful and enduring reason to exist” – ie: your company’s vision, its mission
- “aligns with long-term financial performance” – ie: making a profit / not making a loss
- “provides a clear context for daily decision making” – ie: considering the business’s purpose when making daily decisions, both big and small
- “unifies and motivates relevant stakeholders” – ie: bringing people (the stakeholders) together and providing them with a reason to do something
First of all, regarding the second bullet point, “aligns with long-term financial performance”; making a profit (or at least, not making a loss – specifically charities and non-profits) is something all businesses are aiming for and so we can leave this to the side, for now.
Back to the first bullet point; “an organisation’s meaningful and enduring reason to exist.” If we were to sum up the reason for betternotstop to exist we would say that we want to change how people work and live to help create a better world for everyone.
In recent years, a business’s purpose has driven their branding. We’ve seen it with particular types of oat milk, and beer companies. More often than not, this type of purpose-driven branding has only focused on external messaging, rather than being used to develop a top to bottom purposeful mindset for everyone in the company.
You could hire the best marketing team in the world, spend time (and money) on creating the most appealing mission statement, printing and framing it – attaching it to every surface of the organisation, but if employees aren’t connected to that purpose then what’s being promoted by the company as its purpose will in fact lead to discordance and disengagement (and likely a hefty dose of skepticism too).
Which brings us to bullet point no.3; providing “a clear context for daily decision making.”
This is where we act upon our stated purpose. Using betternotstop as the example again, how can we change how people work without considering that in literally every decision we make? Are we asking our employees to work 9-5 at a desk, in an office, watched over by the boss? Nope. Everyone, from the top down, works in a flexible manner that works for them.
It’s great that your purpose as a business is clear to those outside of the organisation. But it’s not enough. It has to be clear to everyone internally too – and that includes yourself. You have to keep checking in with your purpose and ensuring that your behaviour adheres to it.
On to bullet-point no.4: “unifies and motivates relevant stakeholders.”
Every successful business needs to provide their stakeholders with a reason to do something. That something could be remaining as an investor, purchasing your products or retaining your services.
By staying true to your purpose and allowing it to provide a clear context for daily decision making you will maintain and increase legitimacy within your business, which will attract, motivate and (crucially) retain talent. This, in turn will drive strong customer and stakeholder relationships, which will then increase business performance.
So; have a purpose, stay true to that purpose and allow it to inform your decisions, use it to motivate all stakeholders and this will all result in a profitable business.
But as we said earlier, while purpose is critical regardless of size, it’s not good enough. You have to be useful too.
To be useful in business is to be able to be contributing something to the wider society. To not simply be taking, or damaging society through fast fashion, environmentally damaging products and non-sustainable business practices.
You need to be able to have a purpose that actively contributes towards making the world a better place for those of us in it now, and for those to come in the future.
A recent global study has revealed that consumers are 4-6 times more likely to purchase, protect, and champion purpose-driven companies:
- 4 times more likely to purchase from the company
- 6 times more likely to protect the company in the event of a misstep or public criticism
- 4.5 times more likely to champion the company and recommend it to friends and family
- 4.1 times more likely to trust the company
This is especially true when looking at the younger generation. Research shows that younger shoppers want to buy from businesses and brands that are committed to making a positive impact and are transparent in their approaches in doing so.
According to Forbes: “Commitment in this area will build brand loyalty, yielding stronger reputation, brand affinity, and bottom-line results.”
On top of this, a new sustainable economy centred on the United Nations Sustainable Development Goals is estimated to be worth $12 trillion.
Which takes us back to that second bullet point laying out the definition of ‘purpose’: that it “aligns with long-term financial performance”.
The facts are there – the only way for your purpose to align with long-term financial performance is for your purpose to be useful.
Useful to people, useful to the planet.
If your purpose is useful you will not only be making the world a better place, but making the right decision for your business.