A well-crafted strategy will always seed growth, but growth for the sake of growth is rarely strategic and often a distraction and waste of resources. Purpose is a lens through which strategy may search for growth opportunities that will compound and which might otherwise have escaped its attention.
Active Knowledge Question:
Does your purpose allow you to find the right opportunities for your business?
Purpose
There has been a recent renewal in the belief that businesses must have a purpose statement. But purpose is still misunderstood by many business leaders and is often interchanged with vision, mission and the profit motive.
It is, however, one of the most powerful tools a business leader can use to muster commitment, passion and the focus of all the people working within and with their business. And if crafted correctly, it is also the window through which endless opportunities for growth may be discovered.
Purpose is born in the creation of a business, the seeding of the original idea that launched that business. Yet it is often forgotten as the founder’s influence wanes or is discounted as new leadership is appointed.
In the absence of a founding purpose, one can be inadvertently created (sometimes through marketing efforts) without recognising the underlying impact that it may have.
Make the reason for your business’s existence ‘righteous’. In other words, something that everyone working for the business can relate to, take pride in and feel good about. This then becomes the focus that you constantly speak to. When you talk about direction and seek to muster everyone’s energy, it is the language of purpose that you must use.
Purpose is founded in need, that is, meeting someone else’s need. Purpose is not necessarily timeless, but if correctly crafted, can have an enduring quality underpinning growth and relevance.
The Birth Of Purpose
Purpose is perhaps one of the most important foundations in creating a great business and is vital to strategic thinking. A well-articulated purpose statement for a business is its cornerstone and the first piece to be laid in building a great business.
It answers the question: Why am I establishing this business?
Without purpose, a business is really directionless and will:
- Easily chase opportunities for which it is not suited.
- Find itself bound to existing revenue sources.
- Miss new openings that could have taken it to another level.
Purpose must deliver meaning, focus on customer need and value, and, therefore, direction. The right purpose can be powerful in underpinning the long-term success of your business. A focus on purpose can do this as:
- It clearly defines the need you are seeking to meet in the community and, therefore, keeps everyone focused on the customer value you are competing to deliver.
- Through this focus, you can become the best of the best in delivering that value and outcompete anyone else in your chosen marketplace.
- The focus on customer need can become a source of innovation and growth. It will allow you to find new ways of meeting the existing, emerging and related needs that will fuel new opportunities and growth.
- It allows you to lead change and not chase it. You are focused on your purpose and need, and, therefore, readily appreciate the impact of change and step ahead of it.
- It prevents you from chasing every opportunity that appears before you. It supports emergent strategies and can serve to challenge paradigms as they take hold in a business.
A Purpose Founded In Need
A purpose founded in customer need is the most powerful as it creates a tangible meaning to your business’s existence and, therefore, prompts everyone to search out new opportunities.
Purpose, well framed and conceived, allows your business to connect with the real needs of your customers. It allows you to see the value that they experience in using your product. It, therefore, allows you to see into the future and to understand how all the changes that are occurring in our world will impact the experience of that need.
It allows you to grow from a core purpose and remain connected with your customers. It allows you to continually enhance the value you deliver and to see new opportunities before your customers and the market.
All of this whilst remaining true to your purpose and stepping out from your core strength.
Without purpose, you will be centred in a transactional relationship rather than a value relationship with your customers.
Focus On Need, Not Outcome
For purpose to have that enduring quality, and the benefits that go with that, it must be focused on customer need and not outcomes.
By ‘need’ I mean the reason why a customer uses your product and the benefit they receive from it. Now, of course, change is continuous and, therefore, many things can impact how they experience need and how your product or service meets that need. The challenge of competitiveness is to keep your eye firmly on that need and everything that may impact it, while continuously seeking to lift the value you deliver to your customer.
Value reflects the customer’s experience of the fulfilment of their need. Whereas outcome is normally not directly connected to need at all. It usually relates to the business’s experience or goals, for example, selling more units.
A focus on need is enduring; a focus on outcomes is terminal.
Purpose As A Window
If your purpose is crafted in a manner that expresses the value you intend to deliver to customers, and the competitive posture you have adopted, then scanning the market through this lens allows you to focus your efforts. This is not a mechanical statement such as we manufacture ball point points but rather is expressed in the benefit/value that customers receive from the use of that product, for example, ‘we help people communicate more effectively’.
A customer-value based purpose statement enables you to continuously invest in the value you deliver whilst tracking changes that may impact the need or the value you deliver. And scanning for opportunities to expand the scope of value or expand that value into new markets.
Drawing Lines Around Purpose
Here is a series of points, which may assist you in understanding the character and traits of purpose, and to revise/draw your purpose statement. Purpose is:
- ‘The sport of kings’; unity of purpose equals power.
- Most effective when it draws on moral ideas that have stood the test of time.
- The glue that connects people, colleagues, leaders, and communities to plans.
- The cement of trust between individuals. It builds relationships and understanding.
- The primary source of motivation, performance, and achievement.
- The reference guide for all decision-making.
- Not a tool. It is not mission, vision, values, brand, reputation, corporate social responsibility, codes or policies, corporate governance, or strategic thinking.
- Paradoxical – it will drive profits but only if it is pursued for its own purpose.
- Why your business exists and what needs it seeks to meet within the community it has chosen to serve.
Purpose is the cornerstone and reference point for the existence of your business. Real competitive strength lies in that purpose, and everything else builds upon it. Purpose reveals opportunities, ensures alignment, and a compounding of effort. Purpose is founded in meeting customer needs.
An entirely new level of performance.
Want to become a part of the Entrepreneurs+ Community and learn how to make your business competitively fit? Join now.
All the best in the success of your business,
Richard Shrapnel
