Purpose is an organisation’s aspirational reason for being, beyond profits alone. It’s why an organisation matters to people.
A purpose-driven company stands for and takes action on something bigger than its products and services. Purpose can be an organisational strategy and a roadmap to remain competitive in a fast-changing economy. Over three quarters of leaders surveyed recently believe that purpose is central to success. Despite this, very few employees know what their organisation stands for and what makes it different.
So, how do companies pursue purpose successfully?
It starts with articulating a clear, authentic, and long-term purpose – something that is true today, and that guides the organisation into the future.
Here are a few examples of what purpose-driven companies do that set them apart.
1. They integrate purpose into core business strategy
Purpose can be a way to set organisational strategy and guide decision-making. This is increasingly important now, at a time when companies are being challenged to make tough choices. If companies are selling products in their mix, detrimental to public health for instance, they may wish to make tough decisions to remove them from the range if it does not fit with their purpose. In doing so they a;so need to involve all the stakeholders affected internally and externally to ensure they all have a seat at the table and input into decision making.
2. They motivate employees’ work to a larger, shared purpose
This is where businesses have the opportunity to embed the business purpose into the day to day workings of the business and the roles and responsibilities of their teams. So the teams then all head towards the same motivating purpose
The Body Shop for instance ‘EXIST TO FIGHT FOR A FAIRER, MORE BEAUTIFUL WORLD.’ And they ask of all their employees BE DARING, BE DIFFERENT, BE JUST!
They believe Business can drive positive change in the world. When Anita threw open the doors of The Body Shop, this was her belief. The products they create, the campaigns they run and the communities they support drive purpose as well as profit. They are absolutely change-makers and always have been.
3. They use a purpose mindset to advance measurable goals
Stand-out companies set measurable goals to put their purpose statement into action. In fact B-Corps embed it into their articles of incorporation and memorandum of association. This makes it a legal obligation to deliver against this, as well as being set as goals within the organisation around key pillars such as people, profit, planet and communities.
4. They harness the power of purpose to innovate
Organisational purpose can also drive innovation. IBM’s business purpose is to “make a connected world smarter.” It harnesses that purpose to drive profitable innovation through programs like Smarter Planet, which in its first year grew to be the focus of a quarter of the company’s research.
IBM connects purpose-driven innovation to the market through its Smarter Cities challenge, which invites governments to submit environmental, social or infrastructural challenges. The company harnesses its expertise and technology to create solutions. It’s reached more than 100 cities so far. Stockholm saw a 22% reduction in traffic congestion and a $92M annual gain in revenue; Bolzano realized a 30% savings in services for its aging population; Malta reduced water consumption 15% and energy use 25%.
This isn’t disinterested philanthropy. Revenue associated with Smarter Cities solutions increased 50%, and the Smarter Planet program as a whole has driven more than $7 billion in revenue. Those who are aware of the program are two – three times more likely to consider partnering with IBM.
Purpose not only gives companies the agility to innovate in times of disruption it can help drive transformational change. That’s particularly true of big picture organisational purpose.
5. They engage their partners around purpose
Purpose goes far beyond traditional philanthropy. It is a business strategy, and so will eventually reach suppliers, customers, distributors, and the whole of a company’s operations. Companies that articulate their core business purpose often seek to evolve the way they engage with society, as well. Surprisingly, that can be good news for a company’s nonprofit partners.
The first question to ask is: what do our customers want?
Your customers are the communities you serve, your corporate partners, and your supporters. It’s essential to listen and know your customers in order to provide value.
Purpose Driven Companies Take a Stand
Purpose-driven companies come in all shapes and sizes and can be found in industries all over the world. The one thing they have in common is a clear understanding of what they stand for, and a willingness to take a stand in ways that create long-term value for their company and all the people they serve. It’s no longer a question of if an organisation should lead with purpose, it’s about how.
Becoming a B-Corp and utilising the tools available to B-Leaders can help companies in a structured and measurable way. This is why we created Bthe. We know that purpose driven businesses can help create the change the world needs. And together we know we can help you Bthe the Business the world needs.