I have been saying it for years, but recent worldwide studies conducted by respected advisory firms like Deloitte confirm my findings officially: Purpose led companies do much better. In every sense of the word. There is a very simple reason why today, more than ever, we can see this principle at work all around us. During bad times, when people feel either threatened, insecure or scared, the questions they ask those they buy from change. In good times, businesses are accustomed to dealing with questions like, “how much” and “how soon can I get it.” But in times like the present, if you run a business, you have to answer deeper and more relevant questions based on “Why?”
“Why should I buy from you?”
“Why do you even exist?”
“Why do you treat your workers so poorly?”
“Why don’t you give back to society?”
“Why don’t you invest in the environment?”
These are the questions brands get confronted with on the daily in the new normal. But in the world of purpose-driven, value oriented-businesses, these questions have always been normal. A purpose-oriented company does not wait until society starts to ask the big questions. It constantly prepares for it and builds on it. People are now, more than ever, curious about three things:
-Are you a good employer?
-Are you a good member of society?
-Are you good for this planet?
And most companies have zero answers to these questions. Which is understandable because when you only invest in delivering goods and work hard to keep prices attractive (because you think that’s all people want), you are not in the right mindset to think about WHY. You just seek to deliver, to milk the cow, to squeeze the lemon before it dries out. Understandable, but absolutely unforgivable.
As the global study by Deloitte points out, close to 60% of all interviewed consumers are willing to pay 25% more for goods sold by companies who answer these questions in a believable fashion. Which dismantles the old thinking that price beats out competition.
The fact is, purpose will always beat competition because a well-voiced and applied purpose is so unique that it puts you outside of harm’s way of the competition. Truly purposeful companies have no competition. Those who abide by less purpose-driven strategies and rely on low prices, product inventory and loud marketing are highly exposed and easy to hurt. Purpose as a foundation of a company is not just a driver for forward movement, it is also protection against rolling backwards.
That being said, a wrong understanding of what purpose is can be just as harmful as having none at all. And we better get clear on what purpose is before it gets hacked into tiny bits by the corporate buzzword machine. Plenty of brands abuse it as a generic umbrella term for corporate social responsibility programs to sum up all of their social engagements. To think that holding a fundraiser or donating money to the local hospital is equal to leading with purpose is not just wrong, it’s misleading and destructive. Purpose runs much deeper. Purpose cannot be left in the charge of a department, or be pinned on a single activity. It is not the discipline of PR. Purpose is everyone’s responsibility. Purpose is always and everywhere. Purpose breeds in every cell of an organization, in everything it believes, thinks and does. As such, purpose is the very definition of how a brand sees its value in this world. The sum of everything that makes a brand a good and valuable member of a local and global society is what its purpose is made up of. Purpose lives within a company’s mission. And its mission is the way it solves problems that are meaningful.
Today’s consumers have more and more understanding that the promise of value is the relevant driver for loyalty and awareness; not the products or the prices a brand offers. A large percentage of millennials all over the world know about the terrible things corporations have done for decades: to their own people, to the environment and to the world (Exxon, Wells Fargo, Volkswagen, Lehman Brothers to name just a few). And they know how the majority of the planet looked away while bathing in the superfluous abundance these companies awarded them with. And they know that there are people who would let this happen all over again.
Luckily, the paint of greed is chipping faster than Executives can patch up. Clients and customers want more and they deserve more. And we, the owners and founders of the businesses that seek to serve them, must offer them a good reason to buy from us with confidence so we can earn their loyalty and trust.
Do you employ a clear understanding of purpose in your business? Do you use it on the daily when dealing with your staff, suppliers and clients? Are you really transparent about the things that drive your business, more than just your offer and your price? Challenge yourself and admit if your focus currently lies elsewhere, but understand that it is time to shift to that which makes you valuable, relevant and relatable: Purpose.