Having an established and well-communicated company purpose in place can be a powerful driver of positive change. This statement holds true in terms of a company’s broader social impact, but there is also a strong business case to be made for purpose-driven culture and as its value as a driver of employee engagement.
A compelling amount of research suggests that purpose is key to unlocking greater levels of profitability, productivity and performance.
One of the most valuable investments you can make as an entrepreneur is spending time on defining your ‘why.’ Once you have a good understanding of the reason for your company’s existence – the unique problem it’s trying to solve or the value it has to offer the world, the way forward will become infinitely clearer.
A company’s ‘why’ is so integral to its long-term success that award-winning author and speaker, Simon Sinek, put it at the very centre of what he refers to as the ‘golden circle’ – a model for building a solid value proposition. As Sinek explained – in one of the world’s most widely viewed TED Talks of all time, communicating a company’s ‘why’ effectively is how great leaders inspire action.
Building better workforces – in every sense of the word
The impact of climate change and the growing call for social justice are just two of the issues that reflect the global community’s increasing level of interconnectedness. With this greater level of awareness around how individual actions contribute to the wellbeing of the collective, more employees are looking to fulfil roles that are purpose-driven.
A recent study conducted by McKinsey & Company found that when employees viewed their work to be meaningful, their performance improved by over 30%, they were 75% more likely to be committed to their company and were just under 50% less likely to leave. These findings are evidence of the far-reaching benefits that stand to be derived from showing employees that their work as individuals contributes to a vitally important, bigger picture. In the long run, this can have a profoundly positive impact on employee retention and loyalty, allowing businesses to build workforces that are both professionally and personally invested in making the brand a success.
Your first customers are your employees – once you have their buy-in, you’ll have the makings of the most effective team of brand ambassadors you will ever have access to.
A boost for employee satisfaction
Research also points to the fact that employees who work for purpose-driven companies, are more satisfied and therefore, more likely to engage, strive to improve and ultimately be more productive. This is because of the clear link between teams who share a mutual sense of belonging and a positive, productive work environment.
Excellent employee engagement has become the gold standard for success in the corporate world. The same, valuable lessons can be applied within the small and medium enterprise (SME) environment, where the wellbeing of team members is even more crucial to getting through the tough first years of business.
Employees who have a strong sense that they are valued within their roles, are more likely to operate at their fullest potential. The more we investigate the importance of mental and emotional wellbeing in the workplace, the more we’re beginning to understand that happier employees, are more productive employees.
Bottom-line benefits
The importance of a clearly defined company purpose can also have implications for how quickly and efficiently it is able to acquire and hold market share. This is because purpose-driven brands not only resonate with their employees, internal stakeholders and communities, but also with their existing and potential customer base.
A Cone/Porter Novelli survey found that as much as 78% of consumers would recommend the products or services of a purpose-driven company to others.
A further 66% would switch their brand of preference to a purpose-driven brand – a figure that increases exponentially when younger generations are polled. These findings are indicative of an upward trend that is likely to grow steadily with the increased awareness of millennials and Gen-Z consumers about how their buying decisions ultimately affect others and the world around them.
In closing
You could think of purpose as the rudder that gives a business a sense of direction and helps chart the best way forward in achieving a range of key metrics.
With a firm grasp of what that purpose is, it becomes easier to refine your communications strategy, your brand positioning in the market, your employee value proposition and your strategic vision for the years to come. As we move with greater speed in this direction, we will likely see purpose take the lead as one of the key drivers of good business in an increasingly interconnected world.
Friedrich Meisenholl | Manager | Regional Investment | Business Partners Limited | mail me |
