Businesses that show a true commitment to purpose – the reason they exist beyond creating revenue and profit – have always been shown to do better than their non purpose-driven cousins.
From stronger customer engagement and loyalty, employees who are prepared to go the extra mile and financial outperformance – global research provides irrefutable evidence of the power of business purpose.
As we endure the current health and economic crisis and at some point begin to contemplate life beyond, it’s even more important to keep your purpose squarely in the frame. It’s the one constant you can rely on as the bedrock for decision-making in an otherwise rapidly changing, hyper-challenging environment.
To begin to understand why, here’s a more detailed definition of business purpose:
Here's why purpose-driven businesses are better placed to survive the current crisis and to thrive in the post-crisis world:
1. Purpose is the foundation for customer engagement
When they make purchasing decisions, customers and prospective customers are a lot less rational than we tend to give them credit for. Rather, emotion plays a part in pretty much any purchase you can think of. Creating an emotional connection with customers is therefore vital.
Your business purpose is part of that connection. Again, we can look to research from around the world to confirm this to be the case. According to the Zeno Group, 94% of consumers say purpose is important in businesses. And they’re 4 times more likely to buy from a brand with a strong purpose – that is, with which they feel an emotional connection.
Once you build an emotional connection with a customer, it’s an extremely difficult bond to break. That’s a powerful thought in a time of crisis. These are the customers who’ll support you through the tough times and be the backbone of your post-crisis regrowth.
If you’re not purpose-driven and actively living your purpose in the eyes of your customers and prospective customers, it’s likely to be tougher to build those really strong engagement levels.
2. Employees respond to purpose
Wouldn’t it be a dream if your employees loved coming to work every day and willingly delivered discretionary effort, going beyond your expectations?
During, and emerging from, a crisis these are exactly the type of employees you want in your business.
Again, we can look to global research for evidence that clarity of business purpose is a strong driver of employee engagement. So strong, in fact, that according to one piece of research by HR Dive:
....around half of all employees would take a lower salary to work for a truly purpose-driven business.
Like customers, employees are driven by emotion at least as much as they are by rational thought. Clarity of purpose helps create an environment where your employees feel engaged, committed and prepared to deliver effort beyond their “job spec”.
These are the employees who’ll support you and do whatever they need to do to help you emerge from a crisis in good shape.
3. Purpose keeps strategy on track
As the definition above suggests, purpose should guide strategy. But even in “normal” times, it’s common for businesses to formulate strategy in a “directional vacuum”. In other words, without any reference to purpose, either because they aren’t clear on it or they simply ignore it. The result is highly likely to be a set of strategies to which there’s no real commitment and which change frequently.
During times of crisis, purpose becomes even more important in its role of providing the guiding set of principles within which decision-making takes place. It helps you stay focused and lowers the risk of being distracted by the rapid change that typifies a crisis.
Many high growth businesses rely on purpose to stay relevant in a fast-changing world.
Most businesses find themselves faced with any number of strategy options and sorting through them, prioritising and eventually deciding on an initial course can be difficult – not to mention time consuming. And there’s always a risk you’ll make the odd bad call.
To reduce that risk and abbreviate the decision-making process, your purpose should be your “north star” guiding you through every step of your strategic thinking. It provides an over-arching set of principles you can use to stress test your options by simply asking how each option helps you achieve your business purpose. If you struggle to answer that question, move on to your next option.
4. Purpose makes business planning a breeze
Shorter term business and action planning really is where the rubber hits the road since it’s the process that determines what goes on in your business on a day-to-day basis. Purpose-driven business planning creates great outcomes on a number of levels:
Prioritising projects: most business planning activity results in multiple new projects, adjustments to existing ones and a range of supporting tasks. You really can’t hope to properly prioritise all this without a clear sense of why your business exists and where it’s heading;
Allocating resources: likewise with clear priorities you can make more informed decisions about how and where to allocate resources in your business. There’s only so many people and physical resources available to you and purpose enables more objective decision-making about resource allocation;
“Fearless” communication: when employees are clear about and committed to purpose (and can see you leading from the front on that score) you have a culture where team members can provide open and “fearless” feedback and advice when they see the need. And they’ll do it in a way that’s considered and constructive;
Innovation: a “purpose-built” business plan gives team members permission to be creative and innovative (as much as those words seem over-used these days). The clarity of direction provided by purpose helps everyone understand the parameters within which measured risk taking is ok.
In Summary...
It's normal to feel disoriented and uncertain during times of crisis. But as Albert Einstein said, in every crisis there's opportunity. The great challenge is positioning your business to firstly identify that opportunity then create the environment in which you can take advantage of it.
The graphic below highlights just some of the steps you can take to create a truly purpose-driven, resilient business.
It's important to remember none of this is specific nor unique to the current health and economic challenges we're facing. As certainly as we'll emerge from this crisis, we'll find ourselves confronting another at some point in future.
The most successful businesses and those that will thrive - not just survive - after a time of crisis will be those that focus on purpose as the driving force behind everything they do. They'll create stronger relationships with customers and employees and operate with considerable more clarity than those that ignore or pay lip service to their purpose...the very reason they exist beyond simply making money.
How strong is purpose in your business?
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