Why Purpose Means So Much to Business

In 1960, the American Marketing Association defined a word that is now uttered approximately 76,983,042 times a day in today’s business world: “brand.” The AMA’s definition of brand as “a name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers” still stands true today. But, unlike in 1960, an organization’s success today requires more than a clearly defined brand; to succeed in 2015 you also need to have a well-defined purpose.

In more simple times (well, if you count wood burning stoves and no electricity as simple), businesses were successful for one main reason – they offered better products than anyone else. Or quite possibly, they were the only provider of that product or service within walking (or horse and buggy) distance. Either way, your product was your brand. And that was that. Enter significant societal disrupters like cars, trains, and the Industrial Revolution, and things became more competitive. People had access to more businesses. More products to choose from. They had the ability to travel to make a purchase. And brand recognition – and the business practice of branding – became much more important.

Purpose meaning in business

Fast-forward a few decades and we enter the Mad Men era, where a smart jingle could change a brand’s future. Branding was having a true moment. Then enter even more disrupters – the Internet, smartphones, Google, the ability to purchase products from anywhere in the world with a simple click. We can learn all about a brand with a single search or visit to Wikipedia. Competition is fierce with small brands daring to drive buzz via alternative social campaigns and viral activities. Traditional advertising, marketing, and branding campaigns just won’t cut it. Sure, they still are influential – having a clearly articulated external brand with a personality and set of promises a customer can rely on still plays a significant role in driving revenue – but in 2015, consumers want and need proof that the story a company is telling is authentic. Today, what makes us really, really want to support an organization, as both consumers and as employees, is when an organization has a purpose that we respect, admire, and want to be associated with.

Robin Wooddall-Klein, Senior Vice President of Root Inc., tells us: “Purpose is at the core of who an organization is. Strategy is where they are going with that purpose. And brand is their voice to the market. When purpose, strategy, and brand are all aligned, it is an accelerant to business results. It is the authentic and vibrant expression of the ‘who’ the organization is and what they have to offer. If this is compelling, it serves as a magnet to employees, customers, and shareholders. But, if it isn’t, if the three elements aren’t all aligned or if purpose is missing from the equation, then organizations miss the benefit that the power this accelerant can provide.”

Root CEO Jim Haudan believes that purpose is something that drives much more than our purchasing behaviors, but that it influences our daily actions including where we want to work. “We fear living life with insignificance,” he says. “Aligning ourselves with a greater purpose helps us feel that what we’re doing actually matters because we become part of something bigger than ourselves, work becomes more than just a methodical, financial-based transaction and becomes a place where we are often passionate pioneers on an adventure to ‘find a better way.’ That’s very good for associates looking for a special place to fully invest themselves, and for organizations focused on authentically engaging their people to generate breakthrough results.”

Kind of makes you want to go back and make sure you have your purpose nailed, that it aligns with your strategy and brand, and that you’re shouting it from the rooftops, right? Well, that would be a smart thing to do because purpose really, really matters.

Purpose and All Stakeholders

Millennials are one of the biggest supporters of purpose. They want to know what drives the organization they’ll be giving their talents to, beyond just making a profit. But, while millennials may have brought this opinion into the workplace, all employees are starting to feel the same: an organization’s purpose can be the issue that keeps a person at an organization for the long term or attracts him or her to it in the first place.

But purpose isn’t just for an internal audience – it matters to customers, too. Your buyers want to know that you’re authentic. If a brand makes a claim about its beliefs, work practices, or products, the statements better ring true because it won’t take long for the public to sniff them out. And an inauthentic brand leads to distrust, disloyalty, and decreased sales. But when consumers believe the experience being touted truly connects to an organization’s purpose and brand with authenticity, loyalty increases. And that’s what you want in on.

Then there are the shareholders. These folks hold the purse strings and they want to invest in companies that have sustainable long-term growth potential – companies that can keep customers buying because they have an authentic story and purpose people can rally behind. Savvy investors also want to see that your purpose aligns with your organization’s internal processes. If a brand claims that it is defined by simplicity, then investors need to see that simplicity lives in everything the organization does and that its purpose supports the same mission.

As you hone in on your purpose, here’s something else to think about: will your organization be the most competitive long term if your people don’t share your purpose? After all, people buy your goods or seek to work with you because of your purpose. Which makes you think that employees need to “buy into” your purpose in order to be good for your business, right? Yes. Well, kind of.

Wooddall-Klein tells us: “You can have employees with great skills and a strong work ethic who are committed to making a meaningful contribution. But, if you’re not connecting with the passions and purpose that drives them personally, then it’s really just a transactional relationship. These employees are working for you, most likely for the time being, because you happen to fit in to their lives right now. Purpose can be a key differentiator in the relationship with your employees. If the employee cares deeply about the organizational purpose because it connects to something he or she personally cares about, then the relationship goes beyond the transactional. Purpose-driven organizations are curious about what their people care about and are looking to connect their individual passions to the organization’s purpose.”

Haudan adds, “The most successful and admirable corporate cultures are the ones that embrace the talents of its people as its greatest asset. I’m talking about the culture that believes its people have the right to do meaningful work and that actively seeks out their ideas, creativity and insights because ‘your ideas are better than ours.’ Now that’s an organization that is working hard to bring each individual’s purpose into the fold. And that is the organization that will benefit from having its people truly committed to its mission.”

Just as much as millennials demand to know an organization’s purpose, this group is also a main driver of bringing personal purpose to work.

“It’s almost as if today’s workforce is seeking out the highest purpose bidder. And when someone’s personal purpose doesn’t connect to the purpose of their organization, my sense is that this person is on a constant alert – just biding his or her time, waiting for an opportunity that is a better personal fit,” Haudan says.

Becoming a Purpose-Driven Organization

How can leaders go about tapping into their people’s personal purposes? Here are three ways to get there:

Listen closer during interviews.
Candidates are getting more and more savvy about searching out what they want to do. So they’re going into interviews with a clear sense of their goals. If you pay attention during an interview, you should be able to determine if a person is focused on growth and development, is in it for the compensation and benefits, or if they’re focused on applying their personal passions and purpose to their work. If a candidate has all the right knowledge and skills but doesn’t have a care in the world for what your organization does, then at some point, they will fail, they will cease to be engaged or will simply move on. The good news is that when an organization can be clear about its purpose, candidates (and customers) who are like-minded will find them.

Tap into managers’ insights.
One of the responsibilities of managers is to know their teams. So leaders should let managers use this information to do good. For example, if an employee has a passion for writing and has set up a personal blog chronicling a hobby, then see if that person would want to write for the company blog or newsletter. This is how personal purpose can be applied to a task that impacts the business – a blog has the power to attract new clients and build brand awareness. Does someone in the business run a lot of 5K races? See if they want to head up a corporate team that raises money for charity. Here’s how personal interests can become a part of office culture. Both examples help keep people engaged once they walk through your door.

Share stories of personal purpose.
Haudan reminds us “great leaders help people discover the hero within.” But how? These leaders aren’t embarrassed or shy when it comes to sharing their personal purpose. They look for any opportunity to provide transparency. To provide true authenticity. Organizations can hold annual or bi-annual meetings where different leaders talk about their individual purpose – what drives them outside of the office and how that connects to what they do in the office. It can be very powerful for employees to see and hear their leaders sharing this personal information. Many will walk away feeling motivated to link their personal purpose to work, too.

Purpose is so important that is has to be a living, breathing part of your organization. It has to be something that leaders believe in, talk about, and ask others about. Today’s workforce is made up of people who care – from millennials to boomers. They want to know the reasons why they are doing something – beyond that it bolsters the bottom line. Companies that can articulate this, be authentic about it, and help people connect to it will benefit from attracting the best workers, the most loyal customers, and sustained success.