A business without a clear, defined purpose will eventually run into a dead end.
I know this sounds like an extreme statement, but hear me out.
You can try to propel growth by providing ongoing training, doling out regular incentives, and increasing managerial oversight — but it will all lead to disappointing results.
Why? Because you’re basing your approach on economic logic, instead of aligning your organization with a higher purpose. You’re focused on growing for growth’s sake, instead of creating value.
In a report conducted by a team from Harvard Business Review Analytics and professional services firm EY’s Beacon Institute, they declare the following:
“A new leading edge: those companies able to harness the power of purpose to drive performance and profitability enjoy a distinct competitive advantage.”
This is to say that forward-looking companies should embrace the challenge of building a purpose-driven environment that intersects with their business interests.
And as leaders, our most important job is connecting our team to that guiding mission.
It’s as simple and as difficult as that.
What does purpose look like in practice?
“A higher purpose is not about economic exchanges,” write co-authors Robert E. Quinn and Anjan V. Thakor. “It reflects something more aspirational. It explains how the people involved with an organization are making a difference, gives them a sense of meaning, and draws their support.”
Simply put: an inspired and engaged workforce goes the extra mile for customers, and they derive greater fulfillment from being connected to a clear, compelling vision.
As CEO of a bootstrapped company, I launched my company, JotForm, 14 years ago with a specific and guiding purpose: create a product that makes robust online forms easy and intuitive for our customers.
What this means is that no matter how much we change business strategies, we’re committed to that singular focus. It shapes our decision-making and keeps us on track instead of chasing after every new trend in the tech world. CEO of Salesforce, Marc Benioff put it well: “Companies can do more than just make money, they can serve others.”
“The business of business is improving the state of the world.”
When defining your own purpose, don’t just articulate a mission statement and a set of values. Go deeper. Look at your strengths and how you can use them for social good. This is what will ultimately define your organization’s identity.
How purpose creates competitive advantage
Far from a fluffy, new-age term, Forbes contributor, Sherry Hakimi, notes that “In today’s technology-driven, rapidly evolving economy, successful companies are built not from the ground up, but from the purpose up.”
“Purposeful narrative propels experimentation in new products, technologies, and services,” she writes.
Not only does it drive innovation and performance, but it also moves the needle forward in drawing people to your business. According to a 2018 survey, eight in 10 consumers say they’re more loyal to purpose-driven brands, with 67% percent of respondents saying they feel companies with a purpose care more about them and their families.
“When purpose is chosen with conscious intentionality and as a reflection of how a company wants to evolve,” Hakimi writes, “it can have a transformative impact.”
How to weave purpose into your core business strategy
In another fascinating story for Harvard Business Review published last year, researchers Thomas W. Malnight, Ivy Buche, and Charles Dhanaraj shared the findings of their global study on high-growth companies. What they discovered was that leaders who used purpose as a core strategy were able to “generate sustained profitable growth, stay relevant in a rapidly changing world, and deepen ties with their stakeholders.”
Below I share with you some expert-backed recommendations I’ve learned and implemented while growing JotForm.
1. Look at the larger ecosystem
When you consider expanding your business, don’t just think of the current playing field you’re in. Ensure that each move you make is aligned to your company’s core vision. Look around you and find connections between your product and burgeoning opportunities outside of your current periphery.
At JotForm, for example, while we create easy-to-use forms for people with zero developer skills, it’s important for us to always connect the dots for how we might serve diverse customers; not only individuals, but also large enterprises and government agencies who find themselves buried in data.
We think of the larger ecosystem and then go back to our higher purpose: how can we best support our customers in this moment in time? In these specific conditions? How can we make their lives easier?
2. Continuously spread purpose throughout your business
In creating your leadership agenda, always choose value over volume.
Your entire organization, from product knowledge, marketing, and finance should all be in service of understanding and meeting your customer’s needs — not the other way around. This not only helps give your team greater clarity on their “why,” it also keeps them motivated and invested in what they’re doing.
But it also does more than that.
Apart from boosting morale and productivity, according to experts, spreading purpose throughout your organization will eventually spread outwardly as well. “When customers, suppliers, and other stakeholders see that a company has a strong higher purpose, they are more likely to trust it and more motivated to interact with it,” write researchers Malnight, Buche, and Dhanaraj.
3. Cultivate a sustained focus on purpose
Think of your higher mission not as a one and done deal that you write up when you first set up your business. Purpose should be your guiding North that you come back to again and again to help with decision-making.
As we’ve all witnessed during this pandemic, conditions will change. It’s an undeniable fact every entrepreneur will have to face at one point or another.
But how you define and adjust your relationship to these changes, are ultimately what will determine whether you run into a dead end or pivot to an endless stream of possibilities.
The post Why Purpose-Driven Entrepreneurs Focus on the Bigger Picture appeared first on Entrepreneur and is written by Aytekin Tank
Original source: Entrepreneur