Posted by Many companies are not necessarily founded with greater social, cultural or environmental purposes in mind, but that doesn’t mean they can’t incorporate them.
But first, it’s helpful to define what we’re dealing with: What is “purpose” and why is everyone talking about it? I’ve found that the best definition is “the natural evolution of philanthropy and cause marketing,” one that takes the act of giving money and/or partnering with nonprofits a step further. Purpose means a company is incorporating values that impact social, cultural and environmental issues into its fiber and decision-making.
Today, purpose affects every opportunity, and spans from investors to customers. Larry Fink, CEO and chairman of the multinational investment firm BlackRock, created a tectonic shift in 2018 when he said, “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.” In his 2021 letter to CEOs, he went so far as to say, “It is clear that being connected to stakeholders — establishing trust with them and acting with purpose — enables a company to understand and respond to the changes happening in the world. Companies ignore stakeholders at their peril — companies that do not earn this trust will find it harder and harder to attract customers and talent, especially as young people increasingly expect companies to reflect their values.”
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In the 2020 Zeno Strength of Purpose study of 8,000 consumers, 94% reported that purpose is important when choosing brands, while the 2020 B2B Purpose Paradox Harris survey found that 52% of business leaders reported that purpose was a strong link to client loyalty and that purpose influences employee engagement at work. It’s clear then that this is now a key part of a company’s reputation, regardless of size, industry or sector.
As an entrepreneur, you may not be used to considering purpose as part of your decision-making and incorporating it into your plans and culture. Such a prospect might even sound overwhelming, but building a company with purpose ensures you’ll leave a positive imprint on the lives of others. Without question, this takes commitment to execute, so let’s review critical steps to put your company on a purpose-driven path.
1. Review your existing culture
Every company has cultural values, so gather your executive team and review yours. What does your company culture hold dearest? The reason it’s important to start there is that purpose must have some internal meaning in order to have an external impact. For example, maybe your enterprise holds curiosity to a high standard — what you look for in new employees and what you value most in existing ones. That’s a great start, because authenticity is key. If your company’s employees, customers and stakeholders don’t accept your company’s stated purpose, how can it thrive and reach its highest potential?
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Next, think about how that purpose can support a greater social, cultural or environmental mission when combined with your product and stakeholders (employees, customers and investors). For example, you could expand on that passion for curiosity: ask your stakeholders what it means to them and find out what purpose-driven initiatives are important to them. Then come back to the drawing table and put the pieces together in a way that contributes to society. The result should be meaningful and ambitious, but also match your ability to implement. Not every company can turn curiosity into an innovation purpose that changes humanity in a year, but incremental change — drops in a bucket — do matter. Remember, too, that your stated purpose can be fairly bold and broad. For example, if you’re a manufacturing company that values curiosity, perhaps your purpose could become education equity.
2. Implement internally first
You may have had some exciting breakthroughs exploring your company’s values, and in time may find that your stated purpose is taking on a life of its own, and that people are starting to incorporate purpose into strategies. That’s fantastic, because it’s a signal that you’ve hit on something internally, and internalization distinguishes purpose-driven companies. But start slow: Look at your own policies and see if they are consistent with your stated purpose-driven philosophies. Employees need to experience your company’s purpose with every touchpoint, from vendor choices to advertising to policies. For example, how can you expand on that curiosity-driven purpose within meetings? How can you encourage employees to engage in the world around them with that stated purpose? Do your vendors match these values? If not, is there a vendor whose purpose more closely aligns? This is a great opportunity to engage internal stakeholders productively: Ask for help from your entire company, because authentic purpose is implemented from the C-suite to the bottom line.
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3. Walk the walk
True purpose takes courage and long-haul commitment, and successfully implementing it can require sacrifices. That means you may need to make purchase decisions that cost a bit more but are more consistent with your purpose. You may pass on partnership opportunities in order to seek those more consistent with your ethos. This is the stage where you can really begin to celebrate your purpose externally, though — engage PR and marketing teams to speak confidently about your actions and impact — and begin to implement customer-facing and purpose-driven campaigns that will benefit the bottom line through loyalty and differentiation.
Defining purpose is a journey, but one that will return benefits beyond your lifetime, no matter the size of the enterprise. It is a path worth taking for you, your employees, your business and the world.