Did you know that a Core Purpose/Mission can increase returns by 400 percent!
When you consider your company’s Core Purpose, what comes to mind? If the first answer that pops into your head is to make an impact on your bottom line, you haven’t quite gotten to your company’s Core Purpose. Maybe you’re quick to dismiss Core Purpose as just the latest corporate jargon that’s got everybody talking, but really not something to spend resources on. If you’re thinking, isn’t a purpose just filler content for our website? You haven’t yet understood the power of your company’s Core Purpose.
Studies by the the Harvard Business Review show that purpose can lead to profit and by Stengal that a company’s “Purpose” can increase returns by 400 percent!
The Stengal 50, a list of 50 of the world’s fastest-growing brands, revealed a cause/effect when a brand served a higher purpose and its financial performance. Investment in these 50 companies over the decade of the study would have been 400% more profitable than an investment in the S&P 500.
What is a company’s Core Purpose and how is it important?
A company’s Core Purpose is often called its Mission. If Core Values are the soul, then the Core Purpose is the heart of the company. One way to begin thinking about your Core Purpose is to consider what would be missed if your company was no longer around.
- Starbucks’ Core Purpose is to provide an “escape” from one’s busy day with a personalized beverage;
- Disney’s Core Purpose is creating “Happiness” for families and friends;
- RedBalloon’s Core Purpose is to “Change the world through gifting” (gratitude) experiences (beginning at home in Australia);
- Atlassian’s (Australia’s only software ‘unicorn’) Mission is “to help unleash the potential of every team;”
and perhaps my favourite;
- This picture was taken in Sydney, Australia. You can’t state a strategy more simply – and for those who don’t get the analogy, this Australian company Grieve Septic & Liquid Waste pumps sewerage! Grieve Septic & Liquid Waste is very clear on the words it wants to own in the minds of its core customers.
Purpose is used in companies to get through challenging times. When employees or leaders can pause and reflect on the higher purpose their work is serving, it can motivate them to stay the course.
In a Bloomberg Business article “The Happiest Man in Detroit” about Ford Motors, Alan Mullaly, the CEO who led the company from the brink of bankruptcy to being profitable again, said he drew strength and inspiration from a Ford ad published in 1925 that stated: “Opening the Highways to all Mankind” during that tumultuous time. Mullaly believed that Ford’s purpose was to bring “safe and efficient transportation to EVERYONE.”
TOMS founder Blake Mycoskie writes about how his company veered away from its purpose when it started to scale up. In the article, he describes the journey he and his company took to get back to the “why” of TOMS—using business to improve lives (the company gives one pair of shoes to a child without shoes for every pair it sells. With eyewear purchases, part of the profit is used to save or restore eyesight for those in developing countries).
Not only does purpose help employees and leaders get through difficult times, but it also streamlines priorities and helps the team focus on only initiatives that help them serve their purpose. According to a Deloitte survey, 87 percent of executives believe that companies perform best if their purpose goes beyond profit.
People need a purpose besides “making money” to jump out of bed each morning and head into work. If you ignite and capture your team’s hearts with a purpose, not just their heads, they will give you 40% more effort.
How do you define your company’s Core Purpose?
First, follow the advice of Simon Sinek, author of Start with Why – How Great Leaders Inspire Everyone to Take Action and start with “Why.” You can see Simon’s TEDx Talk on the subject (a must watch) and then answer these Why questions for your company:
- Why is the company doing what it’s doing?
- What is the higher purpose?
- Why should I have passion for what we’re doing?
- Why should our customers miss us if we weren’t around?
As you keep asking “why” when you answer these questions, you will ultimately end up with your company’s authentic Core Purpose. And it’s OK, and likely better if your company’s Core Purpose goes beyond the products and services you deliver.
A Core Purpose should be broad enough to engage everyone in the organisation, and powerful enough, if developed and articulated correctly, to get your lowest paid worker out of bed on the coldest winter morning.
Even if your company has been around for a while and had established a Core Purpose, you can reinvent it or modify it.
If you would like to receive a worksheet to help you identify your Core Purpose please email or call me.
I hope you have enjoyed these insights. Have a great week, and stay growth-focused! Interested in hearing more? Call me on +61 408 748 980 or email me at jonathan@scaleupgrowth.co
Best wishes,
Jonathan
www.scaleupgrowth.co