The missing element in the success of your business may be defining and understanding who you are as a business. In some circles, this is now being described as corporate identity.
As a business, why do you need to know who you are and what does this actually mean? The simple answer is so you understand:
- Where you are going.
- Why you are going there.
- What you expect to happen along the way.
Knowing ‘who you are’ is best seen as a journey, not a destination. It’s all about effectiveness, efficiency and achievement. For some, the answer to ‘who am I?’ may seem simple, and that would be ‘profit’. I am in business and therefore I am here to make a profit. But the ‘profit’ answer is not the best one, and actually won’t maximise your bottom line.
Iconic brands such as Apple, Lego and IKEA are cited as examples of businesses that have clearly defined their corporate identities. It’s argued that this allows them to coherently marshal all their resources and has propelled them to global success.
What is meant by having defined their corporate identity? The corporate identity thesis runs a bit like this:
- Defining ‘who you are’ as a corporation is a strategic imperative as it allows you to:
- Know where to grow, and by default where not to grow.
- How to organise and deploy your people and teams.
- Where best to allocate your resources.
- Successful corporations make a commitment to figuring out who they are and defining their identity.
- The elements that allow them to define their identity are:
- Their value proposition (that is, their customer offering).
- Their distinctive capabilities.
- The products and services that are consistent with the value and capabilities above.
For me, there are a couple of missing pieces to defining corporate identity through the above steps, and they are purpose and customer need. For me, identity is who you are, but that is an outcome of the purpose for which your business exists and the customer need you seek to meet. These are foundational questions that are best defined when your business is first formed. You could say that identity reflects the purpose and need elements, but that’s starting in the wrong place and I believe reflects an inward focus, which competitively is always dangerous.
A business starts, and grows, with an idea, an opportunity or what may be better described as a ‘need wanting someone to meet it’.
You find a solution to meeting that need better than anyone else has been able to and you go to market with it. You keep your eyes firmly focused on that need, and your market, and sell your solution to your target customer base. And, with a bit of persistence, it will get picked up and become the enormous success you dreamed of.
The purpose for which your business exists? To meet the ‘need’ you saw in the marketplace and you structure your business to be able to meet that need better than anyone else so as to deliver more customer value than your competitors. What is the culture you nurture? The capabilities you grow? And how do you organise yourself? The answer to all those questions is, in a way, that which allows you to deliver more customer value.
But customer needs are never static nor is the market you compete in, so by having defined your purpose in relation to the customer needs you meet, you do two things:
- Always evolve, reinvent and step out in meeting that need.
- Expand from that core need to meet other related needs and grow from your core.
Having an articulated sense of purpose linked to customer need is critical to the ability of your business to grow and become great. How you operate on a day-to-day basis becomes a function of competing effectively to deliver customer value. This can be described as identity but it starts with purpose and need and is outward looking. Your brand becomes the market’s view of your identity.
Without a clear sense of purpose and need, you run the risk of being a business with no competitive strength (in my language, competitively unfit) and incapable of real growth. You will chase opportunities here, there and everywhere, and wonder why your business is not growing.
To have a clear sense of who you are, who your customers are and what value you deliver to them is essential for any successful business. Taking that a step further and understanding how you compete effectively in your marketplace and developing sustainable real growth are the next steps of becoming great. But without the cornerstones of purpose and need, the foundations for growth are weakened.
A well-articulated purpose is a ‘gold mine’ as it can underpin the enduring income of your business for decades to come.
Active Knowledge Questions:
1. What does your business actually do?
2. What is it better at than anyone else?
3. Why do your customers keep coming back?
4. What value do you deliver to your customers?
5. How do your responses to the above come together to answer the questions of purpose and need?
Act Now:
Need to lift the leadership performance in your business? Learn how in C88 – Leadership Performance Guide and Journal.
Or do you need to rework your business strategy? Take a look at Strategy Play – Crafting Undefeatable Business Strategies.
Want to become a part of the Entrepreneurs+ community? Sign up for my eNewsletter, and join the conversation by sending me a question via Ask Richard.
All the best in the success of your business,
Richard Shrapnel
Additional suggested reading:
http://www.strategy-business.com/article/Pulling-the-Triggers-That-Pull-Companies
