“Purpose? I don’t believe in that wishy-washy ambiguous new-age bullshit!” “Can we please skip the hippie shit?” “That’s ambiguous spiritual mumbo jumbo!”
Over the years, I heard all that and more from some clients. Not every organization is open to discussing its purpose. Cynical ones straight out reject that their company has a purpose. When that happens, I ask them a follow-up question: “Then, why does this company exist?” Their answer is often the same: “To make a profit!”
Unfortunately, profit’s role in a corporation is often misunderstood. Profit is akin to oxygen for a human being: essential for existence, yet not the reason for it. If we can’t breathe, we die. But we don’t live to breathe. Likewise, if an organization can’t make a profit, eventually, it dies. But that doesn’t mean that it exists to make a profit. Clients then ask a fundamental question: “So, what purpose serves the purpose?”
Based on my experience -and others’- an overarching purpose can offer four benefits beyond profit maximization. Let’s go over them one by one.
1. Purpose guides
We can liken organizational purpose to both a compass and a strainer. As a compass, organizational purpose provides a clear sense of direction for companies, pointing them toward their true north. Corporations that align their actions and decisions with their overarching purpose can weather unexpected challenges or market fluctuations more easily.
Organizational purpose also acts as a filter to separate essential decisions from non-essential ones. By using the organizational purpose as a strainer, companies can sift through myriad options and retain only those that align with their values and mission.
By providing guidance and acting as a filter, a well-defined purpose can direct an organization to make informed decisions. It is not a coincidence that Certified B Corps in the UK are growing 28 times faster than the national economic growth.
2. Purpose connects
Organizations are like the solar system. You can draw a parallel between the Sun and purpose. Thanks to its immense gravity, the Sun holds all celestial objects together. Similarly, purpose keeps the entire organization together. The planets represent various internal and external stakeholders revolving around the central purpose, working harmoniously.
A notable example is Patagonia, whose mission is to “build the best product, cause no unnecessary harm, [and] use business to inspire and implement solutions to the environmental crisis.” This clear purpose units customers and suppliers around a shared commitment to environmental sustainability.
A shared purpose fosters a sense of community and unity among stakeholders. In return, stronger relationships would lead to an increased commitment from stakeholders.
3. Purpose attracts
Research shows that customers worldwide seek brands with purpose. For instance, Accenture found that 64% of global consumers find brands that actively communicate their purpose more attractive. Another study says that US consumers are more likely to have a positive image of (89%), trust in (86%) and be loyal (83%) to brands that lead with purpose.
In today’s world, customers are increasingly selective about the companies they patronize, often making informed choices based on an organization’s values, social responsibility, and societal impact. That dynamic is even more pronounced with Gen Z, who are three times more likely to say that the purpose of business is to “serve communities and society” rather than to “make good products and services.”
The moral of the story is that a well-defined organizational purpose is crucial in nurturing and preserving customer loyalty.
4. Purpose motivates
Finally, a compelling organizational purpose can motivate employees to perform at their best. Let’s take it further: the purpose can inspire employees in ways that monetary compensation alone cannot. Research by Bain & Company concludes that if a satisfied employee’s productivity level is 100%, an engaged employee’s level is 144%. That said, the productivity level of an employee truly inspired by their employer’s purpose is a whopping 225%!
Moreover, people seek meaningful, engaging work – even if it means sacrificing income. 27% of managers in British companies would likely accept a salary cut to work for a company with a clear purpose beyond profit.
Long story short, the purpose is a powerful carrot, increasing workforce productivity, well-being and loyalty.
And so, dear skeptical clients, while it may be tempting to dismiss organizational purpose as wishy-washy new-age nonsense or ambiguous spiritual mumbo jumbo, the truth is that purpose offers tangible benefits to companies willing to embrace it. Purpose-driven organizations enjoy directional, relational, reputational, and motivational benefits. Just remember: profit may be the oxygen keeping your organization alive, but the purpose gives it life, meaning, and a reason to thrive.