Why a Business Purpose Should Not be “To make money”
In the modern business world, companies often prioritise making a profit above all else. The bottom line is often seen as the be-all and end-all, with other factors such as employee satisfaction, customer loyalty and environmental responsibility being seen as mere side issues. In addition, a business with a narrow focus on profit may miss out on long-term opportunities. They may also fail to attract and retain talented employees and lose the trust of customers and stakeholders.
It is, however, becoming increasingly clear that a company’s business purpose and values are essential to building a strong and loyal customer base. Profit is, therefore, a natural result of fulfilling a company’s deeper purpose.
Business purpose drive actions.
A company’s core values and beliefs should be the driving force behind its actions. This means that everything they do reflects their Business Purpose and positively impacts the business. This includes increased customer loyalty, attracting new customers, motivating and retaining employees, improving productivity and efficiency and much more.
When companies prioritise their business purpose, they can create a deep connection with customers who share their values. This is because people don’t just buy what a business does, they buy why the business does it. By focusing on their “why,” companies can build a strong foundation of loyal customers who are invested in the company’s business purpose and values. As renowned author and motivational speaker Simon Sinek puts it, “people don’t buy what you do, they buy why you do it.”
For example, Apple’s mission is to empower people with innovative technology that enhances their lives. By prioritising people and innovation, Apple has built a loyal following of customers who are passionate about technology and design.
Another example is Nike, whose business purpose is to “bring inspiration and innovation to every athlete in the world.” Nike’s mission goes beyond just selling athletic shoes and apparel; it is about empowering athletes to achieve their goals. By focusing on their mission, Nike has built a loyal customer base that is passionate about sports and fitness.
Inspiring customers and employees.
When companies prioritise profit above all else, they can become disconnected from their customers and lose sight of their core values. In contrast, companies that prioritise their business purpose can build strong connections with their customers and achieve financial success as a result.
Moreover, companies that prioritise their business purpose can also inspire and motivate their employees. When a company is driven by a purpose beyond just making money, it can create a sense of meaning and purpose for its employees. This, in turn, can lead to greater job satisfaction, better performance and lower employee turnover.
Business purpose drives profit.
It’s important to note that a focus on business purpose and values doesn’t mean that profit is unimportant. Profit is still essential to a company’s success.
Studies have shown that purpose-driven companies are more likely to be financially successful. For example, one study conducted by Deloitte found that companies with a strong sense of business purpose are more likely to be financially successful. The study found that purpose-driven companies have higher levels of employee engagement, customer loyalty and innovation. They also have a stronger financial performance. They have a 12 times higher rate of return on assets over a 10-year period compared to companies without a strong sense of business purpose.
Another study conducted by the EY Beacon Institute found that employees who work for purpose-driven companies are more likely to be engaged and productive. They are also more likely to stay with their company for the long term. The study found that 91% of employees who work for a purpose-driven company feel engaged. This compares with only 67% of employees who work for a company without a strong sense of business purpose.
Positive impact on society.
Moreover, purpose-driven companies can have a positive impact on society. By taking action on social and environmental issues, companies can inspire others to do the same. For example, the outdoor clothing company Patagonia’s business purpose is: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”. As a result, is has taken steps to reduce its carbon footprint, eliminate waste and use sustainable materials. By doing so, the company has become a model for other businesses to follow, inspiring others to take action on environmental issues.
Summary
A company’s business purpose and values should be at the heart of its business strategy. By prioritising a deeper purpose, companies can build a loyal following of customers who share their values. They can also inspire and motivate their employees. These mean that they achieve financial success as a natural result. It’s not just about making a profit; it’s about creating a positive impact on society and the world. As business leaders, it’s essential to remember that people don’t just buy what a company does; they buy why a company does it.