From the outside looking in, having a higher purpose in your business might sound like just a fluffy feel-good concept. If you're aware of purpose-driven companies like Airbnb, Patagonia, and TOMS, you know that might not be true.
Purpose and profit can go hand in hand. In a world of consumers that are increasingly choosing the values of a company over the value of what they're buying, it means purposeful and profitable companies are more likely to be sustainable in a rapidly changing time.
Two researchers, Millward Brown and Jim Stengel, developed a list of the world's 50 fastest-growing brands (FedEx, Coca-Cola, and Starbucks, for example) based on 10 years of empirical research involving 50,000 companies. Known as the Stengel 50, it was found that these purpose-driven companies saw 400 percent more returns on the stock market than the S&P 500.
In a recent report by Great Place to Work, 85 percent of employees of Fortune 100 Best companies reported that their work has "special meaning: this is not 'just a job.'" These employees were 11 times more committed to staying with their organizations and were 14 times more likely to look forward to coming to work.
If your profit strategy and your employees can both benefit from being purpose-driven, why not develop a higher purpose for your organization? Here are two key guidelines to keep in mind when creating your company purpose:
1. Make it aspirational.
It can have some relation to the business, but it doesn't have to; in an ideal sense we want it to transcend the workplace and extend into how you can live this purpose at home and in your community.
These are three of my favorite purpose statements:
- Airbnb: Belong Anywhere
- Zappos: Delivering Happiness
- IKEA: To create a better everyday life for the many people.
It can be better when a company's purpose doesn't obviously translate to the nature of the business. Sometimes we live our purpose in ways beyond the scope of our service offerings. In a world that is always changing and innovating, having a purpose that can be fluid and adapt is a more sustainable approach.
The purpose statement of Century 21 Department Stores -- Delivering Value to Live Better -- is a great example. If you're familiar with Century 21, you might guess that the "value" delivered relates to the prices of the designer merchandise they sell. If you aren't familiar, you still get something positive from reading that statement.
The purpose applies to all aspects of the business (and it should). From answering a customer's question to coordinating inventory with a vendor, Century 21 employees can orient themselves as not just workers, but as people who can help others live a better life.
2. Start with why.
Simon Sinek's famous "why" approach to purposeful leadership can also be applied to developing the why of your organization. Figure out what the benefit of your business is to the world and keep asking the question: why? If you owned a pizza parlor, for example:
The parlor's benefit to the world is to make pizza.
To give people a taste of what your family's pizza is like.
To carry on the family tradition and share it with the world.
After about four or five rounds of why, you'll end up with something that aligns with an authentic, honest purpose.
Does this all sound like fluff? At first, it might. A Deloitte survey found that 87 percent of executives believe companies perform best over time if their purpose goes beyond profit.
Once naysayers begin to connect the dots on purpose to the benefits of their bottom line, they turn into believers. The purpose you create ends up being the guiding force in transforming a company culture that is both adaptable and profitable.