 Why does purpose matter? Why not just work on sound strategy and positioning year after year and have a good, viable business in the marketplace? You can certainly do that, and you may even have reasonable success doing it. But in our experience, purpose offers up a host of benefits, including easier decision-making, greater organizational alignment, deeper employee and customer engagement and ultimately, more personal fulfillment and happiness. And in the end, a clear and compelling purpose is a huge tiebreaker in the marketplace that will make not only your people and your customers happier, but also your shareholders.  It will drive all major decision-making and become the determining factor in how you allocate resources, hire employees, plan for the future and judge your success.  It fulfills a deep-seated need that people have and will drive preference for your company. More >>  It provides the motivation and direction necessary to create meaningful innovation in the marketplace.  It can rally the troops to overcome seemingly insurmountable odds.  It will see you through when times get tough and the road seems unclear.  It is not something you can fake. It’s genuine. It’s real. And it’s something that your customers honestly appreciate about you.  It creates a level of engagement and passion among like-minded stakeholders.  It provides meaningful and sustainable motivation for employees.  Work is no longer a 9-to-5 job to be endured but a meaningful source of fulfillment and satisfaction.  Jim Collins demonstrated in Built to Last that organizations driven by purpose and values outperformed the general market 15:1 and outperformed comparison companies 6:1. Harvard Business School faculty members Kotter and Heskett studied blue-chip firms across 20 different industries and found that firms with strong adaptive cultures based on shared values significantly outperformed firms with weak, values-neutral cultures. Over the four-year period that they observed these companies, revenue grew more than four times faster, rate of job creation was seven times higher, stock price grew 12 times faster and profit performance was significantly higher than comparison companies in similar industries.(1) In a book entitled Firms of Endearment, the authors identify 30 companies (three of whom include our past or current clients: BMW, Southwest Airlines and Whole Foods Market) driven by a sense of purpose and humanistic principles. These companies put the needs of their stakeholders ahead of the needs of shareholders and are bringing about a profound change in the existing capitalist paradigm. The authors found that companies that choose to put their employees and their customers first are outperforming conventional competitors (who have an eye almost exclusively on profit and shareholders), on the order of 8-to-1 in stock market performance. Not only is overall stock performance significantly better, employee turnover is lower, productivity is higher and pricing strategy is not subject to the same low pricing pressure experienced by pure profit-driven, shareholder-focused competitors.(2) Far from being some touchy-feely concept, the best business gurus of our time have identified purpose as a key ingredient of high-performing organizations. (1) Corporate Culture and Performance, John Kotter and James Heskett (2) Firms of Endearment, Rajendra Sisodia, David Wolfe, Jagdish Sheth |
