What is a Business Purpose?
A clearly defined Purpose is an essential element to building a successful business.
So what is a Business Purpose?
Put simply, the purpose of a business the reason that it exists. It should express what contribution the business makes and how that contribution makes a positive contribution to the lives of those people it comes in contact with (such as customers, staff, suppliers, etc.).
The Purpose of a business should clearly define why the businesses does what it does in a way that inspires everyone involved with the business from staff to customers to investors and other stakeholders. This is explain by the concept of the Golden Circle which explains how we should change the way that we communicate.
An organisation’s purpose is the driving force that enables it to express its true identity. It is also the catalyst for creating a culture that makes the purpose real – this is what we call ‘living and breathing your purpose’.
The diagram below shows how the various element of the strategy model fit together and how Purpose sits inside the model, acting like a compass that guides the overall direction of the organisation. The organisation’s Purpose will tend to remain consistent over time, even when the other elements of the model change.
The purpose is normally defined when the organisation is created – since that is the point at which the reason for starting the business is most clear. This can, however, be lost over time so many organisations need to create it retrospectively. While this can be challenging, discovering why your organisation exists (beyond financial gain) makes it easier for you and those you work with to find fulfilment in doing what you do. When people see the value in what they are doing or offering they will be more motivated, focused and driven. This will ultimately have a positive impact on your bottom line.
Do you need a purpose
Don’t make the mistake of thinking that this is just a ‘fad’ or a box to tick – major investment companies are now insisting that businesses seeking investment must have a clear Purpose that is linked to their Strategy and Culture. The reason for this is that understanding the Purpose of the business will help create the culture that the business needs and can, therefore, have a very positive impact on the performance of the business – both internally and externally.
One of the many benefits of being Purpose-Driven is that it changes the way people in the organisations think, act and communicate. This changes the way the organisation does business in a very positive way.
The question then is not should your business have a Purpose but does it have a Purpose that everyone knows, understands and buys into. If not, you should think about how to create and communicate your Purpose.