ARTICLE: The Power of Purpose
This was originally published via Rob Roy Consulting on October 3, 2020
The Power of Purpose
If there ever was a time for companies and organizations to operate around a well-defined purpose, it’s this moment, the one we are living through right now. The global pandemic has generated rising levels of uncertainty, concern leading to panic, and business decisions made from a standpoint of fear. This is the scenario in which leaders risk losing their way, and taking their companies with them.
Ensuring your company is aligned around a guiding business purpose can help you stay on track towards growth, profitability, and employee fulfillment. Don’t make the mistake of relegating the notion of “purpose” to mere words in your mission statement, or a nod to the aspirations of your new hires. Purpose has proven itself as a key differentiator between companies that succeed, and those that fail.
Driving principle, not just lip service
Grounding your business, culture, marketing and narrative in purpose is harder than it sounds, which is why not everybody does it. But for those with the discipline and determination to go through the process, it creates tangible and lasting differentiated value. In fact, a 2019 HBR study found that companies who operationalized around a carefully thought-out, well-articulated purpose generated disproportionately higher levels of profitable growth, stayed more relevant in a rapidly changing world, and deepened ties with their stakeholders more effectively than those who did not.
Famous examples of purpose in action
Steve Jobs reinvigorated Apple with his “Think Different” mantra when he returned in 1997, and a company that was once written off in the face of the PC onslaught is now the most valued entity in the world. LinkedIn was able to differentiate itself from Facebook, establish itself as an iconic brand and flourish in its IPO by remaining true to its purpose of connecting professionals with opportunity. And in the world of retail, Amazon-owned grocery chain Whole Foods has built a multi-million dollar business even as it donates over 5% of net profits to charity and participates in efforts to safeguard the environment and fair trade.
These are big-name examples. But companies of all sizes and all sectors can leverage a sense of purpose to differentiate and succeed. One that we are intimately familiar with is a technology company you’re only likely to have heard of if you’re an electric utility—Tantalus. Full disclosure, they are a Rob Roy Consulting client. And their track record on purpose speaks for itself.
Purpose — the ultimate differentiation for companies of any size
Tantalus is a purpose-driven smart grid solutions company that’s been singularly committed to serving public power and cooperative utilities and their communities thrive for more than 30 years. Nearly 100% of Tantalus’ smart grid and AMI solutions are deployed across these markets, who often serve more distributed communities in some of the most rugged and less developed terrain in the world. These communities cannot get the same level of specialized services or reliable energy coverage from other vendors who focus on serving major metropolitan areas, due to the technical complexities involved in operating reliably in their unique environments.
When Tantalus went through an internal rebranding exercise for its 30th anniversary last year, it rededicated itself to this admirable purpose — it was the right thing to do for communities, and the right thing to do for its commercial success. The company’s most powerful market differentiator is its purpose. A shared sense of commitment to community is one of the top driving factors in Tantalus’ significant customer loyalty. They have 200 municipal, PUD and electric co-op utilities, many of whom have been life-long customers. They chose Tantalus and stuck with them for decades even after intense competitive reviews, and they frequently cite Tantalus’ purpose as the primary reason for their loyalty to the company.
This shared sense of purpose shows up in everything the company says and does — from how it markets itself, approaches new business, supports customers, approaches it annual customer conference, designs training programs, and donates money. They even hand out a “Community Strong” award — complete with a grant — to customers with the most social impact on their local communities. Put simply, Tantalus and its executive leadership area living, breathing case study in how to walk the walk — not just talk the talk — when it comes to their values and ideals.
Purpose starts with questions
To get to your purpose, you have to be curious about yourself. Curiosity leads to rewarding, but difficult, questions. Why are we in business? What value are we trying to create, and for whom? How do we articulate that value not just in financial terms, but in human terms? What kind of future are we trying to create, not only for ourselves but for our customers, employees, partners and other stakeholders?
These and other questions create the tangible parameters companies need to operationalize around their values. They allow you to make your brand and corporate narrative more compelling and emotionally engaging, infusing your sales pitches with meaning and conviction. Defined purpose supercharges talent retention and recruiting, revitalizes partnerships, and boosts corporate valuation with investors and analysts.
Recent studies bear this out:
Customer Experience
Customers, both B2B and B2C, are increasingly influenced by the purpose and mission of the companies they choose to do business with. Data points from multiple perspectives are illuminating this trend.
Edelman trust barometer which demonstrates that consumers brands not only to represent them, but to solve societal problems.
And in May of this year, EY UK&I Managing Partner Alison Kay published an article explaining how consumer trust is higher for companies who do the right thing and take the lead in times of crisis.
Talent
Finding common ground with your employees is vital for making sure your people are engaged, fulfilled and productive. And your company’s purpose — and how well it walks the walk — has a material impact on your ability to recruit top talent.
Glassdoor figures highlight that 77% of employees consider a company’s purpose prior to applying.
And as LinkedIn’s 2020 “GlobalTalent Trends” report concluded, companies are working harder to understand their talent more deeply than before to better serve them. In late 2019, nearly 200 CEOs signed on to a ‘Statement on the Purpose of a Corporation,’ which states that a company’s purpose includes investing in employees, instead of shareholder value. And companies who fail to serve their employees’ interests wind up making headlines — and not the good kind.
Partnerships
The rise of increasingly interconnected supply chains and ecosystems puts an even greater premium on maintaining strong partnerships and alliances. And here again, purpose plays a pivotal role. The driving factor is to shift the focus from win-lose (defeating other) to defeating the challenge in a manner that everyone benefits. This contributes to the trust of the relationship. You can create a win-win-win environment with partners and alliances who have common purpose and are on the path to becoming more productive and engaged.
Corporate valuation
And with investors, the impact is straightforward. As Deloitte pointed out in an October 2019 article titled “Purpose is Everything,” purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction. It makes sense — corporate valuation is a function of present value multiplied by future opportunity. When your future opportunity is grounded in serving an undeniably relevant, fundamental human need, it serves as a force multiplier in your company’s financial value.
Time for companies to get curious about purpose
When your business operations are aligned with your purpose, you can achieve more business flexibility and effectiveness in your business planning. When your entire organization knows where it’s supposed to be headed and why, that empowers them to think creatively and ingeniously overcome obstacles, rather than sticking with some paint-by-numbers tactics devoid of purpose.
And that’s critical, especially in the midst of a global pandemic. A B the Change June 2020 article titled “Why Many Purpose-Driven Businesses Are Faring Better During COVID-19” found that companies risk losing a competitive, innovative edge without a concrete, well-defined purpose.
So clearly, now is the time to get curious. Ask yourself some tough questions. What is your company’s purpose? How does that align with your own belief systems? How well are you operationalizing against it? How could you and your teams benefit from auditing and fine-tuning your purpose-driven operations?
Most importantly, what’s the cost if you don’t?
In our next post, we’ll offer a self-assessment guide for determining if now is the right time for you to revisit your own purpose and purpose-driven operations. We’ll examine some best (and worst) practices for engaging in a purpose-driven exercises. And we’ll look at how to constructively use fear and uncertainty as tools to get you more in touch with your sense of purpose.