Discovering Your Why: Find Your Business Purpose
| By Jennifer Kuklenski |
Find your business “why” and realize your full potential as a purpose-driven entrepreneur!
Understanding your why is one of the most motivating ways for realizing your full potential as a business owner. Finding your purpose can create a deeper sense of meaning for the work you do. It can increase your sense of self worth and boost your happiness.
Finding your purpose also creates a value system for your business. Having a purpose statement can help you define a set of core values that will guide your business decisions. You don’t have to waste time or energy each day trying to figure out if what you’re doing is right or wrong for your business. If what you’re doing aligns with your purpose, then you know you’re on the right track.
Nobel Prize winning economist Milton Friedman once wrote:
“The basic mission of business [is]…to produce goods and services at a profit, and in doing this, business [is] making its maximum contribution to society and in, fact being socially responsible.”Milton Friedman
In the decades since that declaration, the expectations of business as an institution have changed. For an increasing number of customers, the pursuit of profit is no longer enough.
In fact, research has uncovered 8 key attributes identified by consumers as the most important elements of a purposeful brand:
- Fair treatment of all employees
- Products that reflect the needs of people today
- Ethical and sustainable business practices
- Support for important social causes
- Creation of new job opportunities
- Diverse and inclusive culture
- Issue advocacy
- Strong set of values
Benefits of a Strong Business Purpose
A recent global study – the Zeno Group “Strength of Purpose” study – revealed important benefits associated with brands that have a strong purpose. The groundbreaking study was the most thorough of its kind, surveying 8,000 consumers across 8 global markets.
A statistical analysis of the data demonstrated that when a brand has a strong purpose, consumers were:
- 4x more likely to purchase from the brand
- 4.1x more likely to trust the brand
- 4.5x more likely to recommend that brand to a friend or family member
- 6x more likely to protect or defend that brand in a challenging moment
This study offered unequivocal proof that purpose-driven businesses will build stronger reputations and brand loyalty. They’ll also likely be stronger financially.
However, while 94% of global consumers say it is important for the companies they engage with to have a strong purpose, and proved they will reward those who do, most consumers (63%) do not believe companies today have a clear and strong purpose. And they’re right.
Less than a quarter of Fortune 500 companies have developed a purpose statement. And it’s even less if we look at small and medium size enterprises, many of which don’t have mission statements either. Indeed, as well put by Peter Drucker:
“That business purpose and business mission are so rarely given adequate thought is perhaps the most important cause of business frustration and failure.”Peter Drucker
Why Do So Few Businesses Have a Purpose Statement?
Part of the problem is due to the fact that many business owners and leaders do not understand what “purpose” in business actually means. Purpose can be understood in three distinct ways:
- Competence: The function a good or service serves
- Culture: The way a business is run
- Cause: The good to which a business aspires beyond profit
A cause-based purpose tends to garner the most attention, partially because cause-based marketing is a powerful way to increase consumer engagement and boost brand loyalty. Additionally, most consumers – especially Millennials – prefer to buy from companies with a cause-driven purpose. Unfortunately, many entrepreneurs don’t know how to effectively align their brands with causes.
One popular way of finding your cause-based purpose is inspired by the Japanese concept of Ikigai (pronounced “eye-ka-guy”), which roughly translates to “reason for being.” Using the Ikigai framework, you can find your business purpose at the intersection of where your talents (what you are good at) and passions (what you love) converge with global problems (what the world needs) and your vocation or profession (what people are willing to pay you for).
Your business is therefore the vehicle through which you can apply your passions and talents to something the world needs, while making a profit and contributing to economic development in the process.
Is “Purpose” the Buzzword of 21st Century Business?
Over the past decade, “purpose” has become a management buzzword. Since 2010, it has appeared in the titles of more than 400 leadership and business books, as well as thousands of articles. Although most businesses still don’t have a well-defined purpose statement, we have seen many jump on the “purpose-driven” bandwagon.
Unfortunately, the majority of companies that have developed purpose statements misrepresent the actual nature of their business. If you read a typical purpose statement, you’ll likely find highly aspirational but incredibly vague statements, like “change the world” and “make a difference in people’s lives.”
As explained by strategy thought leaders Sally Blount and Paul Leinwand, statements like these “miss the heart of what drives a successful business.” They don’t tell us anything about what the business actually does or who it serves. Moreover, suggesting that one business can itself change the world is simply misleading. According to Blount and Leinwand:
“A great purpose statement is of limited use if your firm cannot execute on it.”Sally Blount and Paul Leinwand (Harvard Business Review)
Developing a Strong Business Purpose Statement
Purpose statements are founded on what companies and organizations do best to improve or advance life on earth. This might include improving people’s lives, improving ecosystems, protecting natural spaces, conserving natural resources, protecting wildlife, or any other aspect of social or environmental justice.
A strong purpose statement should clearly communicate why your organization exists in a way that is easy for customers, employees, and other stakeholders to understand. In evaluating whether your business has effectively articulated its reason for being, Blount and Leinwand recommend you consider the following questions:
Is your stated purpose relevant to the set of customers or users with the potential to buy your products?
Remember that your goods and services won’t be for everyone, and that’s ok. It’s important to make sure your purpose statement is relevant to the consumers who are most willing and able to buy your products. Your purpose statement should resonate with your target audience.
Is it clear whose lives you are improving in some way (large or small)?
The power of having a purpose beyond profit is the ability to make positive change through your business. But that doesn’t mean you need to impact each and every life. In fact, it is highly improbable that you even could, especially if you have a small or medium sized enterprise or you operate in a highly competitive market. Your purpose statement should clearly identify whose lives you’re trying to improve.
Is your purpose unique?
Using phrases like “change lives” or “make a difference” have become relatively meaningless because so many organizations are using them. Likewise, the words “inspire” and “empower” show up in numerous purpose statements. You can use aspirational language in your purpose statement, but you should also distinguish your business from others that may be offering similar goods or services. Be clear about how your company can uniquely create value and drive progress.
Is your organization the right one to be fulfilling this purpose?
Do you have or can you develop the capabilities to excel at your purpose? Can you fulfill it more efficiently or effectively than your competitors? If people don’t see your organization as the rightful owner of your purpose statement, you risk losing their trust and their business.
Developing a strong purpose statement ultimately requires finding balance between vagueness and specificity. If the purpose statement is too vague, then your business will not be able to use it to inform management decisions or strategy. However, if the purpose statement is too specific, then your business may not be able to easily pivot when new market developments require you to change course. Businesses that find a balance between these extremes are likely to be more successful in communicating the company’s purpose and inspiring others to act on it.
Want to learn more about how to find your business purpose and develop effective purpose statements? Subscribe to the 3P Insights Learning Library! You’ll access the 1.5 hour “Discovering Your Why” workshop and a 21-page workbook to walk you through the process of developing your purpose, mission, vision, and values statements. Plus, you’ll gain access to more than 30 hours of additional video content to help grow your business income and impact. Click here to learn more.
3P Insights is a consulting firm that offers training, speaking and support services to help organizations attract and retain diverse talent, create inclusive workplaces, become better environmental stewards, and improve their overall social, environmental, and economic impact.
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