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TEN REASONS WHY YOUR BUSINESS NEEDS PURPOSE
- Purpose helps attract, motivate, engage and retain the right type of employee
- Purpose helps attract and retain the right customers
- Purpose helps create unity within the company
- Purpose helps to drive growth
- Purpose helps to drive higher profit margins
- Purpose helps build the value of the company and the brand
- Purpose helps guide all thoughts, action and communication
- Purpose helps speed up decision making•
- Purpose helps promotes consistency in communication
- Purpose helps foster a culture of innovation
1. Attracting and retaining the right employees
Let’s start at the very beginning. With your most valuable asset. Your people. Just about every person employed in the workplace right now is searching for a sense of purpose, and this has become even more prevalent during the pandemic. And much more evident amongst Millennials and Gen Z employees.
On average, only 30% of employees feel a sense of purpose at work, and the lower down the organisation structure you go the lower this statistic becomes.
Imagine being able to harness 100% of your employees’ talents, and increase their commitment, satisfaction, engagement and loyalty? Well, the best way to do this is to increase your company’s sense of purpose. The very first outcome of this is improved levels of engagement and loyalty.
As it grows, this stronger sense of purpose becomes a magnet that attracts the best talent. Because purpose-driven companies attract and retain purpose-driven individuals, and enjoy the benefits of much higher levels of productivity and output.
2. Attracting and retaining the right customers
According to the 2020 Strength of Purpose study conducted by the Zeno Group, over 90% of customers said it was important that the companies they engage with have a strong sense of purpose. We firmly believe that this figure has shot up over the past 18 months.
The research went on to show that consumers are 4 times as likely to purchase, 6 times as likely to protect, 5 times aS likely to recommend and 4 times as likely to trust a company or brand with a strong sense of purpose.
We also know that customers that care about these sorts of issues are exactly the right type of customer. They are concerned and interested citizens and reward their chosen brands with loyalty and advocacy. So, with as many as 9 out of 10 consumers preferring to deal with purpose-led companies, is there any good reason for your company to remain purposeless?
3. Creating unity of purpose within the organisation
We have seen time and time again that the process of defining and articulating an organisation’s core purpose can be a profoundly unifiying experience at all levels within the company.
Creating a meaningful, clear and concise expression of why your company exists also provides everyone within the organisation with the same picture. Without it, there will be as many different opinions as there are employees.
At it’s best, this unity of purpose is profound, fundamental and sublime.
If it connects with the individuals own reason for being the results can be extraordinary. People like structure and order. But most importantly they want meaning. And that’s exactly what an inspirational core purpose can deliver.
4. Driving growth through purpose
According to a recent Deloitte Insight Article entitled Purpose is Everything, Unilever’s purpose-led brands such as Dove, Vaseline, and Lipton delivered 75 percent of the company’s growth and grew 69 percent faster on average than the rest of its businesses in 2018 (compared to 46 percent in 2017).
These brands have been at it for a long time and have invested much in their messaging. But it is clear to see that more and more customers are buying with their hearts and heads, and that brands whose reason for existence resonates strongly with their customers grow much faster than those that don’t.
5. Purpose improves profit margins
It is a well-known fact that consumers are prepared to pay more for a product, service or brand that they are both emotionally and rationally connected to, than one they are simply rationally connected to.
Purpose is a great way to create emotional bonds between a product, a business and a customer. We know that the vast percentage of purchase decisions are made emotionally and justified rationally. Consumers are more likely to emotionally connect with brands whose reason for being they can identify with and who they feel an affinity for.
Brands that exhibit a strong combination of emotional and rational appeal are able to charge a premium and ultimately improve their profit margins successfully.
6. Purpose helps build the value of the company and the brand
It is a well-known fact that consumers are prepared to pay more for a product, service or brand that they are both emotionally and rationally connected to, than one they are simply rationally connected to.
Purpose is a great way to create emotional bonds between a product, a business and a customer. We know that the vast percentage of purchase decisions are made emotionally and justified rationally. Consumers are more likely to emotionally connect with brands whose reason for being they can identify with and who they feel an affinity for.
Brands that exhibit a strong combination of emotional and rational appeal are able to charge a premium and ultimately improve their profit margins successfully.
7. Think, act and speak on purpose
In 2010, Simon Sinek gave his now famous Ted Talk entitled starting with why. He drew his golden circle – three concentric circles representing why, how and what from the centre out. He made the point that successful companies think, act and communicate from the inside out, starting with why and finishing with the what.
Once a business has defined and articulated its core purpose, its almost impossible to go back to outside in communication. Why we exist tends to be the starting point and the how we work and what we make become secondary. And the business’s stakeholders respond far better to this form of organisational behaviour. Both sides of the brain are engaged and far deeper connections are formed and repeated. This is one of he most obvious and powerful outcomes of moving from purposeless to purposeful.
8. Purpose helps make decision-making clearer
Defining, articulating and implementing a core purpose and becoming purpose-led make all decision making within the company a lot clearer. One simply has to ask about any decision “is it on purpose?” and then decide form there.
If the company’s core purpose is unambiguous and well-stated then the answer to this question will become immediately apparent. Take EY for example. For any proposed endeavour the question to be asked would be – “does this initiative enable us to build a better working world?” If yes then there is a strong case for it to go ahead. If no, the best course of action could well be to return the drawing board. Failing early is a great characteristic of innovative companies and clarity of purpose can help determine the right outcome in the majority of instances.
9. Purpose helps promotes consistency
A wonderful outcome of knowing your why and then thinking, acting and communicating from the outside in is that it brings about enormous consistency of purpose.
Think about human traits that attract us. Right at the top of the list would be consistency of character – human beings value consistency of attitude and behaviour, because then they always know where they stand.
Consistency promotes dependability and trust, and over time promotes a reliable and comfortable sense of familiarity. Inconsistency comes from entities that are not in tune with their purpose, and in all likelihood have not taken time to codify this critical component of their own success. It is not an attractive characteristic of an individual or a company and it can be completely nullified by instilling a strong sense of purpose.
10.Purpose inspires focused innovation
When it comes to activating a new core purpose within an organisation, lateral and creative thinking is encouraged at every level of the organisation. Every employee is required to think about ways and means of manifesting this purpose internally – bringing purpose to life and giving it meaning.
This is a never-ending process as new ideas are continually required to keep the new purpose flourishing. But everyone soon learns to thrive on the creative freedom that a tightly defined purpose creates. And all of a sudden, the relevant idea flow speeds up and spills over into the product and service part of the organisation. And a new corporate culture of innovation grows out if it.