Business success boils down to purpose. It is the No. 1 driver behind successful companies and aligns with the pursuit of profit. How a company acts on its purpose links to branding, customer loyalty, employee retention and stakeholder engagement.
Fast Company’s Sherry Hakimi said, “A purpose mobilizes people in a way that pursuing profits alone never will. For a company to thrive, it needs to infuse its purpose in all that it does.”
Bottom line, without purpose, a company is just managing people and resources. With purpose, a company mobilizes and engages people and resources.
“Purpose is a key ingredient for a strong, sustainable, scalable organizational culture. It’s an unseen-yet-ever-present element that drives an organization. It can be a strategic starting point, a product differentiator, and an organic attractor of users and customers,” Hakimi said.
In the article, Five Social Impact Trends that Inspire Us, by Ebony Frelix, SVP, Philanthropy & Engagement, Salesforce.org, and Nasi Jazayeri, EVP/GM, Salesforce.org Philanthropy Cloud, they say, “Purpose often seems counter-intuitive to profit but in reality, it’s the key. Strong brands that choose the path of collective good find they outperform in shareholder value. Over a 15-year period, corporate responsibility translates to on average $1.28 billion in additional shareholder wealth. Brands that espouse human values over business as usual are rising in popularity and value.”
Frelix and Jazayeri give the example of how REI has closed its stores on Black Friday and paid their employees to spend time outside instead, encouraging others to do the same. “In that first year, REI added 1 million new members (its largest growth ever), with an estimated 2.7 million customers pledging to spend the day outside,” they said.
Another recent example comes from two of the nation’s leading gun sellers, Walmart and Dick’s Sporting Goods, taking steps to limit their sales of AR-15 rifles, thrusting themselves into the middle of the polarizing national debate over gun control.
Their announcements, made two weeks after the school shooting in Parkland, Fla., were among the most significant actions taken on guns by corporate America. Both companies said their decisions were a response to the shooting. Interestingly, investors did not appear to be worried about a backlash, and neither company’s stocks took a hit after the announcement.
Initiatives like these have provided long-term business gains simply by understanding that a brand translates beyond a product or service. But it requires organizations to rethink strategy and take into consideration the social and environmental impacts of its operations. In a Huffington Post article by KoAnn Vikoren Skrzyniarz, she said, “Having a purpose statement alone will not drive you into the leaders circle or build the trusted and authentic brand that customers today increasingly demand; the next economy requires whole systems shifts through the collaboration of all parts of the value network.”
In 2018, doing good will equal business success. Connecting strategy to purpose will help create shared value, and it just might change our world.