Blog: No Purpose, No Profit
Why are you doing the work you do? Is there a reason, or are you just going through the motions?
Why is your business even here? Beyond selling products or services, does your company really matter?
Bottom line, what’s your purpose? And what impact do you want to make on the world around you?
If you can’t state your company’s purpose immediately and succinctly, then your business growth potential is limited. You may stay in business and may even grow a bit. But if you want to GROW your business exponentially, having a heartfelt purpose is going to inspire your teams to achieve the amazing and help you reach your long-term business goals.
According to research conducted by former Procter & Gamble CMO Jim Stengel, companies with higher ideals consistently outperform the competition. In Stengel’s book “Grow: How Ideals Power Growth and Profits at the World’s Greatest Companies,” he reveals that in a 10-year growth study of 50,000 brands, the 50 highest-performing businesses were the ones focusing on ideals. In fact, these 50 firms grew three times faster than their competitors!
The most successful brands in the world realize the importance of purpose and do not sell just products. They instead sell “better ways of living.” P&G, not only one of the most successful consumer package goods companies, but one of the most profitable companies in the world, states it in their purpose statement:
“We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our shareholders and the communities which we live and work to prosper.”
P&G makes people’s lives better everyday, through their products, how they treat their employees, and through their philanthropic work. It is the sole reason they have come to serve 4.6 billion people worldwide. It’s simple, it’s two sentences, and no business decision is made unless it meets that criteria.
IBM, primarily a B2B solutions company, is another great example and has three bullet points explaining their core value:
- “Dedication to every client’s success
- Innovation that matters, for our company and for the world
- Trust and personal responsibility in all relationships”
Easy. Simple. And a bonus of stating it directly in the purpose statement is that every single person in the company, from the CEO to the new hire, can understand and remember it. It gives everyone a goal, and just as importantly gives them a clear filter for decision-making. Therefore every person can make decisions faster, easier and more consistently, enabling the company as a whole to move faster and more decisively than the competition, whether it is how to market a new product, what philanthropic effort to participate in, or how to choose employee benefits.
And you don’t need to be an $83 billion or $104 billion company like P&G or IBM for this stuff to matter, either. Patagonia is renown for its commitment to helping the environment. Its mission statement is:
Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
This deep-seeded purpose has translated into a near doubling of its revenue over the past five years. And this was achieved during a severe down economy.
Your business as well can find its purpose, and this is how. Gather the brightest minds and the biggest hearts from every level in your company. Lock yourselves in a room, and just do it. Look into who you are on the inside. What do you care about? What lights your fire?
Then go ahead and define your purpose. This may take 20 minutes, it may take 20 hours. However long it takes, every second is worth it. You will not only help more people, but your business will run smoother, faster and stronger. And, you’ll happen to make more money, too.
Stuck on how to get started. Below is a list of questions that should be answered in your purpose statement:
- How is your company making your customer’s life better?
- How is your company making the world better?
- How is your company making itself better?
So brew a pot of coffee, buy some snacks, or pick up a six-pack, whatever it takes. Do not leave the meeting until a short, 1-3 sentence, purpose statement is written and agreed upon. Introduce it to your employees and customers, abiding by your purpose with EVERY decision you make. Then watch your business grow further than you ever expected.