Why Purpose-Led Businesses Succeed
Purpose-led businesses have an advantage in today’s VUCA (volatility, uncertainty, complexity and ambiguity) and ever changing world; they have the ability to weather the inevitable and often unpredictable storms and continuously reinvent themselves for greater success. They are the answer to one our most burning questions:
Why do some businesses succeed while other -seemingly similar ones- don’t?
We’ve often heard it’s not the number of times you fall, it’s how many times you get up, but that answer -perseverance- never seems to be completely satisfying. And it shouldn’t be.
Because the key to success is not perseverance – it’s why you persevere.
Purpose, understood as “the reason why we exist and do things”, can be the difference between success and failure in a world of unicorns, burgeoning apps and pop-up shops. In fact, research shows that purpose adds years to your life, makes you more resilient, translates into committed employees and improves your bottom-line in business.
If that’s not enough, here are four compelling reasons to become a purpose-led business:
Why Become a Purpose-led Business?
- 90% of people who believe their organization has a strong sense of purpose also report a strong financial showing in the business. Deloitte
- Companies with purpose-engaged employees saw 2.5 more growth in their stock price than those with lower to no engagement. – Quantum Workplace
- 73% of millennials say “it’s more important to find a job that allows them to do what they love than one that pays well” – McGraw Hill Education
- 45% of those millennials want to do something “that’s good for society” – McGraw Hill Education
If customers connect more with brands that have a story, it follows that employees will do the same. Engaged employees, that believe in a company’s purpose and story can provide incredible results. Purpose is a much more powerful motivator than money.
Consider Unilever’s bold sustainability move in this story: Paul Polman, Unilever’s CEO asked shareholders to sell if they expected “quarterly results” since he intended to move the company’s focus to creating value that is “equitable, shared and sustainable”.
To do so Unilever vowed to reduce 50% of its carbon footprint by 2030 and to source all its energy from renewable sources, forgoing short term profits but focusing on long term revenue.
How to Become a Business with Purpose
How have great companies learned to develop, embrace and embody a purpose and use it to guide their business actions and direct their business decisions? Purpose-led businesses excel in clarity in these areas:
- A defined purpose: why are you in business and who are you in it for? Purpose springs from identity and is an aspirational, inspirational statement, not a mix of your mission, vision and values.
- A clear purpose-to-impact plan.
- An effective way to communicate that purpose effectively to employees and customers alike; facilitating ownership, engagement and identity.
- Purpose as the driver of your corporate culture, focusing on “the how and why” and translating that spirit to campaigns, partnerships and innovation.
- A prescriptive approach to solving problems, one at a time, by keeping purpose and customer at the center of the conversation.
An exemplar for purpose-led business actions is IBM. IBM’s largest philanthropic effort to-date is the Smarter Cities Challenge, with an investment of $66 million since inception in 2010 and deploying over 800 IBM experts to 130 cities. Cities around the world can tap into the IBM Smarter Cities Challenge and apply for help with their greatest challenges.
In Denver (my hometown), IBM is using data, experts and their super computer, Watson to help tackle homelessness. The initiative includes Denver’s collaboration with 41 cities, six counties and local agencies.
People are no longer motivated solely by money, and they are becoming more conscious consumers every day, voting with their dollars and attention based on emotional affinity. Purpose-led business thrives with committed employees and loyal consumers that support a brand because they’re part of something bigger. Committed to significance. Weaving a legacy. Leaving things better than when they arrived.
How will you let purpose drive your business today?
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