What is your company purpose, and has it been tailored to boost your bottom line in the long run?
Before you flinch to avoid the impact of yet another trendy buzzword, let us assure you that this is one you’ll want to remember. See, company purpose is directly tied to your ability to bring in the big bucks, and we all know how lovely it is when your bottom line is nice and secure.
The definition of company purpose:
Company purpose differs from your vision statement, as well as your mission and values. Let’s break it down, shall we?
A vision statement tells your employees and customers where you are headed, i.e. where you want to end up in a few years or decades. It is used to take thinking within the enterprise beyond day-to-day choices and activities, to direct action in a clear and focused way. E.g. this mission statement from outdoor brand Patagonia: "To build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis."
A company’s mission distills what they do, for whom, how they wish to do it and what they would like to build on in future. E.g. a consulting firm might state "We provide consistently reliable assistance with regard to performance management to HR managers in SMEs in the agricultural industry in a future-proof manner".
A company’s values describe their desired culture and serves as a moral compass. E.g. Adobe's values that hinge on remaining genuine, seeking the exceptional, driving innovation and being actively involved.
In comparison, company purpose refers to the emotive reasons behind its existence. It’s your business’ philosophical heartbeat and tells your employees and customers why they should care; why you are the entity they should support among the rest of your competitors.
Now that you know what company purpose is, let’s take a look at why it has become a vital part of the forward-thinking CEO’s managerial toolkit in recent years:
Loyal consumers are seeking out brands with purpose
64% of global consumers find brands that actively communicate their purpose more attractive. 62% want companies to take a stand on issues they are passionate about, and 52% say they are more attracted to buy from certain brands over others if these brands stand for something bigger than just the products and services it sells, which aligns with their personal values.
Businesses with a strong sense of purpose outperform their competitors
Brands with a purpose that focuses on improving the quality of life of both their employees and customer base outperform the stock market by 120%. The Global Leadership Forecast 2018 by DDI World also found that purposeful companies outperform the market by 42% financially. In simple terms - purposeful businesses are coining it.
Talented employees seek meaningful work
The best people out there are looking for engaging work, even if it means they have to sacrifice in terms of remuneration. There is a rise in people’s need to live life with a sense of purpose: 80% in 2016, 89% in 2017, 91% in 2018. Additionally, more than 9 out of 10 employees are willing to trade a percentage of their lifetime earnings for greater meaning at work. In short, if you want the star players on your team, you need to rope them in with a strong sense of company purpose.
Purposeful work increases employee engagement and productivity
Employees who report that their job is “more than just a job” and “has special meaning” are four times more likely to put in extra effort, 11 times more committed to staying with their current employers and 14 times more likely to look forward to coming to work than their peers at competitor companies. Other statistics show that while an engaged employee's productivity level is at a very nice 144%, employees who are truly inspired by their company's purpose can go as high as 225%!
Innovative business leaders are all about purpose
41% of Fortune 500 CEOs state that solving social problems should form part of a company's core business strategy. When asked what the most critical factors are when integrating purpose throughout their business, 93% of executives at purposeful companies cite the need to embed purpose in their culture and behaviours, and that managers need to lead by example.
Compelling stuff, right?
In a nutshell, if you want your business to thrive in 2020 and beyond, it’s important to spend some time considering your company purpose and to ensure that it is woven into your the very fabric of your corporate culture. After all, when your customers and employees can clearly see that your goals go far beyond merely selling products and services, the overall value proposition becomes much more attractive, which benefits your brand and inspires greater involvement from your entire internal team. Much yay!
Keep an eye on the blog or more inspiring insights into company culture, employee engagement, recognition and reward, and more!
In the meantime, if you would like to try out a new tool that can help you to establish and develop your company purpose alongside your valued employees, take a look at our employee recognition platform. It's designed to link your company values directly to employee behaviours. Simply click the button below to get started 👇