These days, crafting a strategy to help you reach your business objectives is a tough gig.
Rapid and often random change is well and truly the name of the game, which means strategy needs to be far more flexible than the textbooks might suggest.
While flexibility is a much-needed ingredient in strategy creation and implementation, it remains important for that strategy to be driven by your core business purpose. It’s your purpose that will guide you through the many challenges you face in business and help you stay focused on your objectives in the face of short-term uncertainty.
In this Insight, we’ll explore the benefits of embracing purpose as the “north star” for your strategy.
But first, a refresher…what exactly is purpose?
Purpose in this context is the fundamental reason your business exists. It’s embodied in the challenges the founder(s) set out to solve for clients. Purpose goes beyond the economic imperative of making money and seeks to answer the question, “Why do we do what we do?”
So, a business can’t “invent” its purpose. It just “is”.
A clear purpose can validate everything you do in business, from strategy and business planning to action plans and formulation of KPIs for employees.
We should distinguish between “purpose”, as defined above, and “cause” because the two terms have come to be used interchangeably. In our view, it’s wrong to do so.
Adopting a cause – perhaps a desire to create an environmental or social impact – is a noble pursuit. We believe every business should have a social conscience and aim to be a better “corporate citizen”. That said, being cause-driven or supporting a social good gives your business A purpose, but it’s not usually THE purpose of a business.
For a closer look at this distinction and why it matters, check out this post.
So...what are the benefits of a purpose-driven approach to strategy?
Purpose can often feel like quite an intangible concept, making it tough for some to get their head around.
But the benefits of a clear and embedded purpose are real. They’re tangible and all-encompassing. Let’s take a closer look.
Brand reputation and client loyalty: the modern consumer is a pretty savvy creature with almost unlimited information at their disposal to help with their purchasing decisions. They can see straight through mere words when dealing with businesses. They’re drawn to those they feel are authentic and genuinely deliver to their non-financial business purpose.
If you’re a demonstrably purpose-driven business, you’ll build trust with clients and potential clients and, perhaps more importantly, an emotional connection with them, which creates ongoing loyalty. That also means, by the way, they’ll be more inclined to refer others to you.
Ensuring that your business purpose is clearly reflected in client acquisition and engagement strategies is therefore vital.
Attracting and retaining quality employees: the two generations taking business purpose most seriously in their employment decisions are known to be Millennials and Gen Zers. We also know that right now in Australia (according to the ABS), they make up over 60% of the workforce.
Most employees want to understand how their roles fit into the bigger picture of the business they work for. How they’re applying their skills to solving client needs and challenges (as opposed to making money for “the man”).
Your business purpose is important to employees. Which in turn means it’s important to you.
Purpose-driven businesses around the globe create a culture of commitment and shared values. That underpins employee engagement and productivity, which, of course, are great for business.
Oh…and by the way…it’s an employee market with a large majority of businesses reporting they don’t have enough applicants for their available positions.
The implications of all this should be clear. Employee-related strategies must be purpose-driven if you want to attract and retain the best talent on offer in the market.
More effective decision-making: when you adopt a purpose-driven approach to strategy and embed it effectively, there’s a greater likelihood that everyone will “get” the longer-term objectives of the business. And understand their contribution to helping achieve that objective.
Purpose creates the framework for evaluating decision options often missing in businesses. This allows decisions to be made more quickly, confidently and consistently across the business.
The result? Improved efficiency and effectiveness across the business and a more engaging client experience.
Innovation and creativity: clarity of purpose can foster a culture in which innovation and creativity rise to the surface. Employees who embrace your business purpose are more likely to think laterally about their roles. They’ll feel encouraged to bring new ideas to the table and challenge old habits that seem to be getting in the way.
This can result in all sorts of breakthroughs in terms of product/service offerings, process efficiencies and other business improvements. Remember, the best ideas are often hidden in plain sight…as a leader, all you need to do is listen.
Long-term value creation: as a result of all we’ve covered above, a clear purpose, effectively embedded in your business, will be a major platform for growth that’s sustainable over time. By which we mean growth that’s reasonably predictable, consistent and repeatable.
Sustainable growth and the resulting reliability of revenue and profitability are key contributors to enterprise value.
While the value of your business might not be of immediate relevance to you, you should at least be thinking about it in terms of your succession plan. It doesn’t take much in the way of mental gymnastics to appreciate the fact that sustainable growth, underpinned by a purpose-driven strategy, is almost certain to enhance the value of your business.
We’ve written on this before and invite you to check out this post, and this one.
Implementing a purpose-driven strategy
We’re not going to sugar-coat this…it can be a challenging process with several critical steps involved.
(Re)Define your business purpose: you have a head start if you’re already clear on this. Many businesses know their purpose but fail to embed it for maximum impact (hence the following steps).
If purpose is not already clear, you’ll need to make it so before you do anything else. That involves getting right back to the origins of the business and asking a few relevant questions. For example:
Is the challenge that drove the founder(s) still relevant?
If not, why not and what’s the current set of client challenges you’re addressing?
What process will you follow to (re)define your business purpose? Will you engage some or all of your employees? How?
These are just some of the important considerations involved in defining or redefining your purpose. You can find more on this here.
Embed your purpose in your vision: your vision should be a concise statement that describes how you see your business at some point in the future – say, three to five years out. That vision should be couched in terms inspired by your purpose and that employees (in particular) can relate to and feel invested in.
Create a purpose-driven strategy to deliver your vision: we see it frequently…strategy devised in a vacuum, with no “north star” driving its development. Purpose provides that focus and helps you sift through the many strategy options you will likely want to prioritise.
For each strategy on the table, question first whether it will help you achieve your vision in a way that’s true to purpose. For each option to make the cut, the answer to each element of that question must be yes. If that’s not the case, you have to ask whether that particular option is valid for your business.
Remember, developing a strategy is all about identifying those long-term objectives you want to achieve and allocating resources to do so. Given those resources are limited, you of course want the most efficient, effective and purpose-driven allocation possible.
Build effective business and action plans: having put together the best purpose-driven strategy you can, don’t let it sit on a shelf gathering dust! Give it life by building shorter-term action plans to achieve milestones that clearly mark progress toward hitting your objectives.
Make those action plans clear and specific, with realistic time-frames for completion.
An important consideration here is to allocate “single-point accountability” so there’s always someone in the team monitoring the completion of planned activities (or otherwise). That individual doesn’t have to be responsible for completing all the actions required but should be accountable for working closely with those who are.
Review and refine: all the above sounds like a lot of activity. And it can be. It’s important to put in place a process to ensure a regular review of progress. Celebrate what’s going well and/or complete and don’t shy away from taking steps to get sluggish projects back on track.
You might also identify some activities that aren’t delivering the results you expected and that realistically have little prospect of ever doing so. Naturally, you should be prepared to change these radically or drop them altogether.
Ok…that’s a lot…
It is.
Thankfully, there’s a graphic summary!
And here it is.
Planning must start from a place where your purpose - the non-financial reason your business exists - is clear. This is where the overall direction for the business is set.
Purpose informs your vision. Strategy then sets out the medium to long-term initiatives that underpin your "purpose-driven" growth that's sustainable over time.
Only after you've addressed purpose, vision, and strategy can you really create your business plan. Without those things, you'll lack the long-term view of your business that enables a clear focus for your shorter-term business and action plans.
And that clarity brings with it a reduced risk of engaging in activities that are irrelevant in the quest for sustainable growth.
Purpose is at the heart of planning
Recall our definition of purpose: the fundamental reason your business exists.
Logically, if that’s a good definition, then if you’re not planning in a way that’s driven by your business purpose, there’s a fair chance you’ll get sub-optimal results.
The message is simple: be clear on your purpose (or redefine it if needed), then commit to putting it at the heart of your strategy and business plans.
What's driving your strategy?
Is your current strategy drifting?
Does everyone in the business "get it"?
A conversation with a GrowthCatalyst adviser could be just what you need to get you on the road to long-term, sustainable and profitable business growth. And keep you there.
Contact us to arrange a face-to-face or virtual conversation.
Alternatively, you can book a time for an initial discussion here.
In other news...
GrowthCatalyst has joined forces with a number of like-minded professionals to form the advisory group Konektis (check us out here). Collectively, the Konektis team provides integrated, multi-disciplinary advice to SMEs to deliver a "one strategy" outcome.
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