Have you ever paused to consider what the purpose of your company is? Is it clearly defined?
With a clearly defined purpose companies can create value far greater than its offerings or the sum of its parts. Having a purpose can create loyalty and trust, drive sales and motivate all stakeholders to act as one. It can positively affect the bottom line of the business.
For example, Facebook’s purpose is to “make the world more open and connected’. Funny enough, it also gives a yardstick for the business folks in the room to measure progress against. In every quarterly earnings call (Facebook is a public company after all), Mark Zuckerberg gives Wall Street an update on the number of Monthly Active Users (MAUs) who they have connected. Today, that number is more than 1.7 billion people, more than 1/5th the human population.
Business experts make the case that purpose is a key to exceptional performance, while psychologists describe it as a pathway to greater well-being. And recent studies have shown that purposeful, value-driven companies outperform their counterparts in stock price by a factor of 12.
Bottom line, purpose driven companies—and its people—are often more successful.
If you immediately heard the word “purpose” and associated it with your company philanthropy and volunteer efforts, you’re not yet thinking big enough. Sure, these wonderful Corporate Social Responsibility efforts tie in to the overall purpose but they’re far from what defines it. CSR is just a small (mighty) piece.
Consider the following questions:
What is the ultimate goal of your company? How does it want to change the world?
What kind of value does your company deliver to the world?
What is your company vision and does everyone within the organization act against the same values and vision?
If you’re able to answer the questions above in a detailed and precise manner, congratulations, you’re one of a select few. In fact, only 20% of companies have a clearly defined purpose. Some of these include:
To organize the world’s information and make it universally accessible and useful. –GOOGLE
A relentless ally for the individual investor. –CHARLES SCHWAB
Warby Parker was founded with a rebellious spirit and lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially-conscious business. –WARBY PARKER
Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. –PATAGONIA
It’s no coincidence that the companies listed above continuously rank high in customer satisfaction, brand loyalty and report steady or rising earnings.
In its simplest form, as shown in the examples above, purpose is your organization’s reason for being. It’s a unifier and connector. It also has very real value for some of the biggest companies of our time. Have a look at this informative video describing Apple, Amazon, Facebook, and Google and how one even pays a tax for not having a measurable purpose:
And a few wise words from Mr. Mark Twain…
“The two most important days in your life are the day you are born and the day you find out why.”
Take this and set out on the important journey to define what it is your company is living for. Then use it for all the good you can.