When starting a business, an entrepreneur answers two important questions. What is the problem that I can solve for my customers? And second, how can I make a profit? Defining the purpose for your business is addressed after you answer the first two questions. It defines why you do what you do.
Articulating a clear, shared purpose for your business creates a strong advantage to compete in the dynamic economic landscape, and create tangible bottom-line benefits. The organizational purpose is a business’s core reason for being and the benefit it provides to those it serves. For all individuals involved in the business, it communicates a shared goal of improving people’s lives.
There is a difference between your organizational purpose and your mission or strategy. Organizational purpose defines why you do what you do and delineates your reason d’etre. It does not change over time, but as society evolves, it may inspire change. Your mission states what your business does, and your strategy plan defines how you will accomplish your goals. By the way, your core values guide the way in which strategy and mission are executed.
Harvard Business Review Analytic Services conducted a survey, The Business Case for Purpose, sponsored by the EY Beacon Institute in 2015. The results of the study indicated that “companies perform better if they have a clear sense of purpose. Purpose-driven companies make more money, have more engaged employees, more loyal customers, and are better at innovation and transformational change.”
There is a risk for a company that articulates its purpose, but fails to integrate it into all its operations. This will likely cause a disconnect between what team members expect from the company and the company’s reality. Intentions are not reality.
Are you willing to commit to embed an organizational purpose into the strategic planning and decision-making processes in your business?
Guided by purpose, all involved in the organization can accomplish much more than a series of daily tasks. Everyone will be aware of how their work contributes to the over-arching purpose.
The organizational purpose provides these benefits so that everyone can work towards the same outcomes:
- Define how the organization contributes to society.
- Define how all tasks are important contributors to this purpose.
- Energize and motivate the workforce.
When you are defining your company’s purpose, start with the people involved in the organization. If it resonates with them, it will motivate them. Creating a clear, well defined purpose statement also will provide a sense of stability in these ambiguous times. People want a certainty, and the more that you can provide them with a clear sense of direction and articulate the positive impact they are making the more they will support the organization.
Download Defining the Purpose for Your Business as a pdf.