It’s awesome to see more and more people talking about the role of purpose in business. There’s a lot to be said for placing a greater emphasis on the true purpose of our business – a reason for why the business exists and operates that goes beyond financial gain.
Unfortunately, a lot of people still don’t understand why purpose is so critical to successful businesses. People get confused and think purpose is all about corporate social responsibility, good PR campaigns, or altruism. This couldn’t be further from the truth!
For example, when I brought up purpose in a recent episode of my P3: People, Performance, Profits web series, I got a lot of responses along these lines:
“Hey Steve, I appreciate what you’re saying about purpose, but I’ve got a business to run!”
“What’s the practical value of purpose for my business?”
There’s nothing wrong with corporate social responsibility or altruistic endeavors at our organization. However, that’s not what we’re referring to when we talk about purpose.
Purpose Should Be at the Core of Everything We Do
Purpose is more than feel-good altruism or CSR – it’s about what you do and the value you provide to other people. Purpose is about how your services or products make the world a better place and impact the lives of others.
It’s not an external or auxiliary component to our core business…it should be our core business!
Now, we all need to make money. If we’re not making money, we’re not able to fulfill our purpose in the first place! However, we need to prioritize purpose over profits in our business decisions. In fact, we need to prioritize purpose in everything we do at the organization.
“Profit is not the purpose. Executing your purpose will drive profits!”
When I started this business, I had a distinct purpose in mind: redefining recruiting with services that offered genuine value. That was the focal point for every decision I made at the company. However, somewhere along the way, the focus shifted to…you guessed it…making money. We see this happen all the time at different organizations. It’s only natural, but it’s a mistake nonetheless.
The problem is that whenever we put a great emphasis on profits, our profitability actually decreased. When we put the focus back on purpose…we became more profitable. That clued me in that purpose did indeed have practical value. Now let me elaborate on how purpose specifically benefits our organization.
Purpose Draws People to Our Company
Think about how much time people spend at their jobs. Almost everyone spends more time at their jobs than they do with their families! Simon Sinek calls companies the new tribes – they are groups of people who are (ideally) united by a common purpose.
At many companies, it’s just a group of people united by a profession or united by a common drive to make money. But the most effective organizations have a purpose beyond money driving them forward.
We know people crave a sense of belonging. We know that everyone wants to be a part of something bigger than themselves. If we have the right purpose, we can offer that to our employees.
Purpose draws people to our organization. When we’re recruiting, people will be more drawn to an organization with a purpose beyond money. Furthermore, purpose allows us to unlock the best performance from our people.
People Will Work for Money, But They Perform for Purpose
If you’re trying to go from people to performance to profits, the promise of money isn’t enough. Let me share one of my favorite quotes on the subject:
“There is a cost for the money that we make and sometimes the cost is not worth it.”
Your team will sacrifice more if they feel the cost is worth it. They will determine whether to make sacrifices and put in that discretionary effort based on your purpose! If your purpose doesn’t inspire them, they will never put in discretionary effort.
Businesses are always trying to improve their engagement, to get their teams to crush their goals and deliver better performance. The secret here lies with purpose. When we have a genuine purpose, we inspire our team to go above and beyond for our clients or customers. We inspire them to give the best they can to the organization.
Purpose Provides Direction
Let’s face it: making decisions at the executive level is hard! In fact, making decisions at every level of the organization is often difficult. Leaders need every tool they can get to determine the right course of action.
Purpose won’t make your decisions for you, but it will certainly give you a guiding light. We can view every business decision through the lens of purpose. We must ask ourselves, does this initiative align with our purpose? Does it help us live our purpose, or does the initiative obstruct it?
Keeping in mind that purpose attracts talent, inspires our teams, and boosts our profitability, it’s not hard to remember the importance of purpose in our decision-making.
Everything Should Start and End with Purpose
When I ask entrepreneurs why they started their business, 9 out of 10 tell me about the sense of purpose that drove their decision. They tell me about the meaningful vision that drove them to solve a problem in the world. They share the inspiration they had to make an impact and help other people.
The trick is remembering, living, and breathing that sense of purpose on a day-to-day basis while running our organization. It may not be easy, but no one said building a great company was a piece of cake!