After a recent conversation with a new client not so long ago, we thought it would be useful to go right back to some basics on business purpose.
We'd had a wide-ranging conversation with the client, covering everything from client and employee engagement, strategy, business plans...you name it, we talked about it. Towards the end of the conversation, we asked about the client's business purpose and its role as the glue that holds everything else together.
"Tell us about the purpose behind your business", we said.
After what felt like a few minutes - but was only a few seconds - of "crickets", the responses came. They ranged from "more flexibility" to "I like being my boss" to "I can make more money" and a few others along similar lines.
And so this post was born. We've set out to remind our readers of five key benefits of a clear business purpose. We hope it also encourages you to step back from the day-to-day pressures of running your business and challenge your mindset.
What is business purpose?
If you go looking, you'll find plenty of definitions of business purpose. An old-school Google search gets over three billion results. Even ChatGPT managed to overly complicate things with almost a page of explanation.
Here's our definition:
Purpose is the reason your business exists beyond making money. It inspires your vision, informs your strategy and provides the framework for day-to-day decision-making and business activity".
Simple enough in concept though practically speaking, it can be a challenge to put your business purpose into words. As we'll see, it's a challenge worth taking on.
Purpose exists in all businesses.
Every founder had a reason for starting their business, and for only a tiny handful, was it ever purely about making money.
Clearly articulating your purpose and embedding it in your business brings a number of significant benefits. Here are five of them.
1. Purpose aligns and engages your employees
As your business grows and you bring on new employees, keeping everyone heading in the same direction and focused on the same objectives can be challenging. Every time you launch a new product or service or undertake a new project, there's potential for confusion (and even some conflict) among employees. That confusion will inevitably have a negative impact on outcomes.
A clear business purpose can help you meet this challenge head-on. Your purpose provides the common direction employees need and helps them individually understand their contribution to the "bigger picture". Employees will collectively know and understand what they're working towards.
Purpose enhances collaboration and conflict resolution by establishing a framework for decision-making.
What's indisputable from global research is that a clear business purpose is instrumental in attracting and retaining high-quality employees. It really is your superpower in the war for talent.
2. Purpose enhances client engagement
We'd all like to think we're highly rational decision-makers. That every decision we make is the result of exhaustive, objective research.
Nothing could be further from the truth.
It turns out that even though we may do extensive pre-decision research, the actual decision when made, is greatly influenced by the heart rather than the head. The only actual proof we need for this is the existence of luxury brands. It's hard to mount a really strong argument that buying a BMW would be a totally rational decision when a Kia performs the same function at a much lower price.
Brands are built on emotion.
And clients today are looking for more than just a product or service. They're looking for that product or service to be delivered by a business that sees them as more than simply a source of revenue. If your business can position itself as one that prioritises client outcomes over profits, you'll be well ahead of the competition.
Your objective should be to create an emotional bond with clients.
Why? Because they'll be more loyal, long-term clients who tend to become advocates for your business.
Purpose sits at the core of this. It's what tells clients why you do what you do that makes you unique. Without purpose, you end up trying to sell a list of features and benefits - anyone can do that. Your purpose differentiates you because, by definition, it's unique to you. And as such, it helps create an emotional connection between you and your client, which fosters strong engagement.
3. Purpose creates an environment conducive to innovation
As we've already mentioned, purpose provides a natural framework for decision-making in your business. In doing so, it also creates an environment in which measured risk-taking is ok.
Your business purpose is far more inspiring to employees than any financial targets will ever be.
With a profit/financial mindset, the main focus for your employees will be the next deal and making more sales.
While you need to keep doing business to stay in business, are these the things a client considers when deciding whether or not to buy from you? Unlikely.
Will they encourage employees to think creatively about how they can make their best possible contribution to the business? And deliver exceptional outcomes for clients? Absolutely not.
Your business purpose can inspire your employees to pursue innovative ways to satisfy client needs and exceed their expectations.
That's great for business.
4. Purpose builds market recognition
Showing a genuine commitment to your business purpose helps you demonstrate brand integrity.
With a clear message to your market that doesn't start with "we're the best in the market because..." potential clients will spot the difference you bring to the table and want to know more.
Because your purpose focuses you on the difference you make in your clients' lives, you have a head start in building credibility and trust....two commodities that are in short supply and that consumers cry out for.
Your business purpose also helps enhance your reputation with suppliers, business partners and other external stakeholders. Even investors, banks and other financiers are increasingly looking to purpose as an indicator of business quality and strength. When that starts happening, you know you should be paying more attention!!
5. Purpose keeps the passion alive
Running a business is a tough gig. Small, medium or large...it doesn't matter. Sometimes your enthusiasm can falter.
Purpose keeps your motivation alive, especially at times you need it most. It's a constant reminder of why your business exists. It fuels your belief that you're doing something good for your clients and, potentially, for the broader community.
It also helps you identify significant achievements and milestones you can celebrate with your employees, clients and other stakeholders (when appropriate). It's recognising those moments that keep everyone in the business engaged and motivated to do their very best work.
Oh...one more thing
We've left this observation until last very deliberately.
Most businesses rely on a reasonably consistent supply of the right clients buying the right products and services for the right price. Those products and services need to be delivered by an enthusiastic and engaged group of employees.
It's your business purpose that helps you achieve those things. And when you do that, you'll have laid the foundations for long-term, sustainable and profitable growth.
Let's be frank. When it's all boiled down, great financial results come from a purpose-driven mindset. They do not come from a sole focus on spreadsheets.
Should you give more attention to purpose?
You know you should.
We can help you make it happen with a process focused on discovering (or rediscovering) purpose in your business. With our objective advice, you'll craft a powerful statement that captures the essence of your business and the impact you want to make.
Is there clarity of purpose in your business?
Does it validate your strategy and business plan?
If not, shouldn't it?
The advisers at GrowthCatalyst can help you create and embed purpose and put you on the road to long-term, sustainable and profitable business growth.
Why not contact us to arrange a face-to-face or virtual conversation?
Alternatively, you can book a time for an initial discussion here.
How purpose-driven is your business right now?
If you're keen for immediate feedback on how sustainable your business growth might be over the longer term, please follow the link to our "Strength of Business Purpose Health Check".
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