Even if they don’t realise it, most business owners are building a purpose driven business to some extent because they have a purpose beyond profit.

When I speak to business owners about their business, we often go back to why they started the business. I don’t think anyone has ever said to me that it was all and only about profit.

There is always a range of reasons.

I wanted to be independent. I wanted the flexibility. I wanted to do it differently. I didn’t agree with the way my old company was doing things. I didn’t like my boss. The list goes on. I’ve written separately about the benefits of being a business owner, so I won’t explore them here.

There is usually a mixture of personal reasons, family reasons, right through to changing the world reasons.

If I then ask why the business matters today, I also get a range of answers – but still the answer is never all about profit.

Purpose Beyond Profit

Most business owners therefore have a purpose beyond profit. That purpose could be anything from providing for my family and the future, helping my customers, being a home for a like-minded team, through to transforming an industry and even changing the world.

It seems like that purpose beyond profit can show up in two ways:

  • Dependent upon the profit – this is about creating things for themselves and their family, what the money can buy, the personal goal behind the business goal.
  • Dependent upon the business – this is about creating things for others, and serving customers through the activity of the business and is not so dependent upon what the profits can buy.

It goes without saying – but I’ll say it anyway – that profit is essential. I have a background as an accountant and worked in several not-for-profits. This is of course untrue. They are profitable and do make profits! The point is that those profits are ploughed back into the work of the organisation, not distributed to owners as dividends. There are no owners. There are no dividends. They must make a profit to ensure that they survive and thrive. Their first duty is to still be here next year to continue their work to fulfil their primary purpose. They must be financially viable. They are not really not-for-profits. They are really not-for-dividends.

Non-profits, NGOs and charities have a purpose beyond profit – and probably so do you.

The question then becomes what that purpose is and how to turn it to good use.

Why Have A Purpose?

“Far and away the best prize that life has to offer is the chance to work hard at work worth doing.” Theodore Roosevelt

So what’s the purpose of purpose?

Purpose-driven businesses typically do very well. Their purpose beyond profit happens to be quite profitable!!

A report by Kantar showed that brands with a high sense of purpose have seen their value increase by 175% over 12 years compared to a growth rate of 70% for brands with a low sense of purpose.

Purpose fuels profits.

Why is this? There are perhaps several possible reasons.

Purpose Motivates People

The same Kantar report indicated that 84% of people in over-performing companies said that they were proud of their brand’s purpose. Also almost two-thirds of millennials expressed a preference for brands that stand for something.

People want to work in a business that resonates with them, that they are comfortable with, that matters, that has a purpose beyond profit. (Note this is not a purpose other than profit – no-one said they wanted to align with a loss-making business!)

Purpose motivates people.

The psychologist Daniel Pink wrote about this in his book Drive. He identified 3 motivators for people at work and one of them was purpose. The sense that they were doing something for a reason other than themselves.

Indeed, the dictionary definition of purpose as a noun gives two meanings:

  • the reason for which something is done or exists
  • a person’s sense of resolve or determination.

The two are linked. Having a reason for doing something can also give a sense of determination to pursue it.

So for an SME business, this is of some interest. Unlocking what is called “discretionary effort” from your workforce greatly improves your return from this valuable resource.

Not only do they do what is needed according to the job description (you’ve got some of those, right?), they want to do a good job because they believe in the purpose.

Note that they are not doing this for you! They are doing this for them. They do the job for you and go the extra mile for themselves – when they want to.

To look at this in a different way, they are not working for you, so much as you and they are working together in service of a greater purpose.

High-Performing Teams Have Purpose

What’s difference between a group of people and a team?

The most commonly accepted answer is that a team has a shared goal – or purpose. Individuals become a group when you put them in close proximity. But a group becomes a team when they unite together to co-operate around the achievement of a shared goal.

What better way to make your business more profitable than to get all your teams working well on their individual functional goals AND all united together on the delivery of a business-wide purpose?

Aligning your teams to support an overall purpose sounds like it will give you a pretty good return on investment!

Stickiness of Employees

It has been said that people join companies but leave their managers. They join a company to do a job, maybe excited by the purpose, maybe not. Once there though, people tend to stay unless there is a good reason to leave – and most people’s day-to-day experience of their workplace centres around their colleagues and particularly their boss.

As the business owner you probably are that manager!

If you and your business are driven by your purpose – and that aligns with the member of staff’s view of the world – then you increase the stickiness of your business as an employer.

They have skin in the game – or more precisely, they have an emotional connection to what working for your business means to them. This is important, because if the relationship with you breaks down at some point, they still have an emotional anchor for stability.

I know this to be true from my own experience in NGOs, even on a bad day, or when working late it feels worthwhile. (I recall printing a budget report out one evening and looking at the time stamp on it and thinking that this was ridiculous and was getting out of hand – the time stamp said 6.28pm 24th December).

Let’s consider the alternative – no purpose, just a profit goal. As soon as the employee stops enjoying working for you, there isn’t much else to keep them there. Indeed, the thought that the only reason the business exists is to put profit in your pocket might hasten them out of the door even faster!!

I think it’s clear – you are cutting down recruitment costs, time and disruption by articulating a purpose that resonates with your team.

Stickiness of Customers

Most of the same thinking applies to customers.

As Simon Sinek said in his famous TED Talk, people don’t buy what you do, they buy why you do it.

Or as Seth Godin wrote in his book Tribes, people are looking for someone to lead them.

Creating a movement or tribe around a common purpose might be the logical outworking for some businesses, but not for most. The insight though is that customers may well congregate around your business because of its values, what it stands for.

Marketing people might now start talking about branding and brand personality. Quite rightly too. However this is where purpose-driven business can get a bad name. Creating a purpose-driven brand is a seductive thing to do – marketing consultants love that sort of thing – the problem is that it can become a marketing gimmick that is only skin deep.

If marketing are the most enthusiastic people about the business purpose then alarm bells should ring!

You as the business owner need to be the most enthusiastic person about business purpose.

Articulating the Purpose

Now don’t misunderstand me, I’m not being rude about marketing people! They can be particularly helpful in articulating and packaging the purpose, especially in a way that resonates with the customer.

What they can’t be allowed to do is to drive and own the process across the business. That must be you, the business owner.

Articulating the purpose comes from within you. It’s an inside-out process. It probably develops and refines over weeks month or years. Forget trying to do it on one away day. Of course, in a day you can get off to a flying start and probably have most of the main parts, but it’ll need space to breathe and evolve.

It’s more like a cow chewing the cud and using their four stomachs to digest it, rather than swallowing an energy drink and it rushing into action straight away!

You need to ruminate.

Articulating the purpose is about putting down on paper, for the first time, what drives you.

It is bundled up with the way that you make decisions and prioritise things, what you value and what not, how you do things.

It’s the decision-making software that runs in your head that you aren’t even aware of.

It might come out fully formed on day one, but I doubt it.

Differentiation

Whilst on the subject of marketing, articulating your purpose gives your business another significant advantage. Instead of competing directly with other businesses for your customer, you differentiate yourself via your values and purpose.

You set yourself up in a new category of one.

Of course, not all your possible customers will come to you, but the ones that do will love it (see stickiness).

If you can articulate what you’re about in a way that resonates with them – and demonstrate it with your actions, consistently – then you should be well on the way to a strong and committed, loyal customer base.

The purpose-driven business doesn’t need to compete, it can differentiate.

Goal-Driven Business vs Purpose-Driven Business

You may be wondering what the difference is between business goals (or strategic goals) and a core purpose. The purpose will almost certainly need to break down into goals and those goals (or strategic objectives) will be what you and your people need to focus on.

However, there is a difference and I think it might be this: goals get fixed in the mind of the team, whilst purpose gets fixed in the heart.

Goal-driven businesses can succeed very well, but the only pleasure and satisfaction comes from achieving the goal. This is a short-lived satisfaction as the focus then moves on to the next one…and the next one.

Purpose-driven businesses by contrast produce satisfaction from the work itself – or to be more exact, the meaning of the work itself.

The work has significance and whilst achievement of some goals along the way may be motivating, just like in any other business, failure to meet them can be seen in the context of the broader purpose.

Purpose Creates Determination and Resourcefulness

If your purpose is strong enough and your emotional commitment to it is strong enough, then you will keep going long past the point when a less committed person would give up.

Why is this? Because you know it’s right, it matters, it’s meaningful to you.

The purpose inspired you on day one and continues to inspire you down the road.

You know WHY you’re doing this.

With dogged determination you then work out HOW to overcome the various practical hurdles and obstacles that present themselves.

You become resourceful.

Along the journey you recruit other people to the cause – team members and customers – even suppliers.

You keep going UNTIL you find out how to make it work. The good news is that you only really need to find one way to make it work and then build from there.

If you have a strong enough WHY, you will find out HOW and keep going UNTIL.

If you don’t have a clear purpose, it’s easier to get disheartened at setbacks and give up.

Authentic Purpose

It has been said that when you can fake authenticity, you‘ve got it made!

Well, for the long term, faking isn’t going to work, it’s too hard to sustain.

So forget faking a purpose if you’re trying to create a long term business that you can be proud of.

Instead it requires an inner journey. Into the business. Into yourself.

As an owner of a small or medium sized business – and especially if you are starting out, YOU are at the centre of the business.

The diagram of the 6 elements of a business puts YOU at the centre.

The purpose needs to come from you.

This might not be easy but it’s worthwhile – and essential if you are building a long term business that you’ll be proud if.

It needs to align with your values and keep you engaged and motivated.

If it won’t do that for you, how can it do so for your team and your customers?

Big companies struggle to have an authentic purpose because they need to drive it through the layers of bureaucracy. They struggle with alignment, because there are too many moving parts – which are often pulling in different directions.

For an SME, it is much easier. There are fewer moving parts and the business owner is the major influence and has the oversight of everything.

However, the onus on the business owner is significant. It takes a bit of personal development work to “Know Thyself” as Socrates put it. Indeed, it’s a lifetime’s work!

So let’s lower the bar, trying to find your ultimate or true purpose is an impossible task!

Let’s set a more realistic goal of articulating what feels right for now and allowing it to develop and refine as your business moves forward. As long as you’re moving in the right overall direction.

Solid as Brighton Rock

In the seaside resort of Brighton in the UK – like other seaside resorts around the world – one of the traditional sweets is Brighton Rock. It’s a cylindrical stick made of boiled sugar with the words “Brighton Rock” running through it from one end to the other.

In Graham Greene’s novel, Brighton Rock, one character, Ida, says “it’s like those sticks of rock: bite it all the way down, you’ll still read Brighton.”

So it can be with an authentically purpose-driven business.

The purpose and values should run through it like lettering in a stick of Brighton Rock.

No matter where you snap the stick of rock, you can clearly see the purpose and values.

Whether you break it where the customer service team is, or the finance team, senior management or the receptionist, the purpose and values should be clear.

This is a tough challenge and gets harder the larger your organisation.

Refuelling With Purpose

One way to embed the purpose like letters in a stick of rock, is to be a role model and repeat messages that align with and support the purpose and values.

This should be effortless – shouldn’t it? Talking about the thing that you are most inspired by? In truth this can be hard work when the demands of your business weigh down on you.

It’s all very well others looking to you to inspire them, but how are you supposed to refuel?

You need to be re-inspired from time to time, to feel again the feelings you’ve felt in the past when you were feeling driven, motivated and resourceful. To re-confirm that it’s still right, or maybe to tweak direction.

Purpose fuels profits and it can fuel you too – but you do need to take the time for a pit-stop and top up the tank.

The ROI of Purpose

Whether I have my business coach hat on or my accountant hat on, I can see that building a business around a purpose – an authentic purpose – is a great long-term investment.

For you as a business owner it gives you:

  • a sense of meaning and fulfilment
  • a fuel to drive your work – the fuel of inspiration
  • a clear sense of direction
  • a framework for decision-making
  • a sense of accountability to something greater
  • a sense of belonging to a wider team or movement
  • the chance to build a community
  • hope for the future
  • motivation to keep going.

For your business if gives:

  • a clearer strategy
  • the option to pivot – i.e. with a different way to express the purpose in the market
  • motivated people – offering discretionary effort
  • inspired teams – with lower need for direction
  • sticky staff and customers – i.e. lower acquisition costs
  • a source of differentiation
  • a long-term horizon.

There are many benefits – they satisfy both the so-called “soft” elements (eg culture) and “hard” elements (eg financial performance) of a business.

It’s personally rewarding and financially rewarding.

Most business owners I work with are interested in building a long-term business that matters. Indeed, when they’ve built it, they still love it. It runs through them like a stick of rock. So there is no particular exit strategy either.

As Zach Klein, the founder of Vimeo put it, with some regret, after he had sold Vimeo: “Build something that you would never sell.

A purpose-driven business truly is greater than the sum of its parts.

Build a Business You’re Proud Of

It’s a lot easier to build a business you’re proud of when it’s doing something that matters to you, your team and your customers – a purpose-driven business.

If you’re not proud of it – of what it’s doing, how it’s doing it and how it goes about what it does, then why should anyone else be?

If you’d like to chat about the purpose of your business and you’d like to build a business you’re proud of, then let’s find a time to speak.

Sounds interesting? Then get in touch.

Quick chat

Book a short 15 minute conversation to say hello and ask any questions.

No sales pitch. No obligation.

Business Review

A longer conversation to help clarify the issues and explore if/how business coaching could help.
No charge. No obligation.
Availability is limited, so book yours today.

Driven by Purpose. Guided by Values.