Living your company's purpose
Ensuring your company has deeply-shared psychological and emotional logic can increase your performance 6x over competitors.
“A real purpose can’t just be words on paper. It has to get under the skin of every member of your organization…. If you get it right, people will feel great about what they’re doing, clear about their goals, and excited to get to work every morning.”
— Roy Spence
When times were tough at Dupont, CEO Ellen Kullman said she was surprised to find that the most common questions she got from employees during informal meetings were about whether the company was going to stick to its mission. It’s one thing to set a direction, but keeping that direction is something else.
It’s easy to come up with a clever phrase and declare it your company’s purpose. You can bring it out for the annual report, and maybe put it on your website somewhere. It makes you feel like you’ve accomplished a task. (“Purpose: check!”)
However, to actually gain the incredible business benefits associated with having a clear purpose, you have to take significant steps to disseminate that purpose throughout your company. Not only should you as the CEO be able to speak clearly about your company’s purpose, but literally every individual involved with your company should be able to express it as well.
You might be skeptical about that notion, but keep this in mind: a purpose-driven company where the staff, vendors, and customers are all on board will always have a profound business advantage over a weakly-led company where the purpose exists only in the CEO’s mind (and sometimes not even there).
Your company’s purpose should be a mantra that’s repeated, discussed, and considered in every decision throughout your company. Your Sales Director should talk about it when approaching a new customer, your receptionist should think about it when answering the phone, and your janitor should ponder it while scrubbing toilets.
When talking with clients about the idea of becoming a purpose-driven company, I’m sometimes told, “James, I know you’re a ‘creative’ and you’re into all that touchy-feely stuff, but I’m a business person. I hired you to figure out how to make us some more money.”
Most business owners tend to be fast, logic-oriented thinkers, so I understand the sentiment. (I don’t often admit this, but being a business owner, I tend to lean in the same direction.)
But here’s the thing about purpose-driven companies: they make money. Lots of money. I’m not all about purpose because I’m a sensitive soul, I’m all about purpose because it magnifies revenue in a big way, without sacrificing (and actually often enhancing) ethics, social responsibility, team happiness, etc.
In the book Built to Last, Collins and Porras demonstrated that companies with deeply shared psychological/emotional logic outperformed comparable companies by about 6 to 1 over the period of 60 years.
Success Profiles, a performance management company, also found a huge performance gap between normal and purpose-driven companies. They studied 600 businesses and found that the average profit per employee increased from $7,802 per employee to $27,401 in companies with clearly defined missions, visions, and values. In their study, the purpose-driven companies outperformed comparable companies by 3.5 to 1.
Keep in mind, we’re not talking about a modest revenue increase of, say, 15%. We’re talking about purpose-driven companies making 300-600% of what their peers are making.
Why does purpose make such a dramatic business difference? It’s actually really simple. On one side, you’ve got a bunch of uninterested warm bodies following their superior’s orders, and on the other side, you’ve got a bunch of people fired up and united behind a shared set of beliefs and goals. One group is obviously going to outperform the other.
I don’t know of any other business factor that has such a direct and dramatic effect on the bottom line. This isn’t touchy-feely stuff, friends. We’re talking about massive amounts of actual money.
I hope by now you’re really getting nervous about your business. I hope you’re realizing that your marketing problems can’t be solved by adding a layer of polish on top of what you already have. I hope you’re starting to understand that this goes much, much deeper than that.
In fact, I hope you’re thinking, “Awww crap!” about your current business situation because that’s the first step to transforming your company into one of those that makes 300-600% of its closest competitors.