Consider this: you found an old table at an antique store. It has potential, but it definitely needs some work, so you decide to make it a DIY project. Now, let’s assume you have never completed such a project in the past. You don’t know what look you’re going for and the end result comes out looking a bit, well, home project-ish. Let’s backtrack. Instead of just going for it, you have a clear idea of the look you’re going for and you take the time to research how to make it happen. This time, the end result looks professional and matches your original idea. You’ve succeeded because you had purpose—and since you had purpose, you had a clear path to your desired goal.
The same principle can, and should, be applied to business.
The short answer to the title of this article, why businesses can’t succeed without a clear purpose, is because purpose drives key decisions. In fact, decisions made without thoughtfully considering the purpose of the business can lead to long-term issues. It’s necessary to be strategic, especially in leadership positions where there is greater influence. However, it’s not just the executive team that must be clear about the purpose, it’s a necessity at all levels.
Most leaders understand the importance of purpose. In fact, studies show that when purpose is clearly communicated, productivity is higher, which ultimately impacts the bottom line. Another reason why clarifying purpose is of significant value is because it fosters an environment of creativity. There’s a more consistent effort to find innovative ways to achieve the mission.
In addition to purpose being important for operational reasons, it’s also imperative for external purposes. Specifically, communicating the purpose of your business to the public is a way to effectively market your brand. It’s a key aspect of positioning your brand in the marketplace. Communicating the purpose of a brand also requires messaging that demonstrates the way in which that purpose is being achieved.
Studies show that companies with a clear purpose not only experience greater growth, it’s also achieved at an accelerated rate. According to a 2014 Fast Company article, “Some 74% of employees and executives at purpose-driven companies say that investors are confident in their growth over the next year, compared to 52% for other companies.” Though the article is a bit dated, it’s doubtful this number has changed. In fact, it’s most likely increased alongside the growth of direct-to-consumer companies whose marketing is driven by purpose.
What’s more, there are some experts that believe employee buy-in is more likely to be achieved when they truly understand the purpose. In fact, employees will often promote the purpose by sharing it with coworkers and customers when they feel it has significance and meaning. Once more, this idea can be demonstrated through an analysis of direct-to-consumer brands.
Employees of such companies are typically heavily involved in social media where they regularly post about or re-post other users experiences of their company’s products. With a clear purpose, it’s easy for employees to buy-in to the company and become fully invested.
You know who else becomes invested in a company when there is a clear purpose? Customers—and they’re who matter the most. When a company has a mission, vision and values that resonate with customers, they are more likely to earn customer loyalty. It’s because the company has communicated that they care, which is of tremendous value because customers want to know that brands have their best interest in mind.
Purpose also helps brands align themselves with their product’s consumers. Purpose drives business but it also gives customers the feeling that the products they’re purchasing fit into their lives based on the mission, morals, and values behind the product.
All in all, businesses who do not have a clear purpose will find themselves floundering for success in a competitive marketplace. Without a purpose to drive key decisions, they will be unable to connect with customers and create a cohesive and productive work environment. Before you build your business, ask yourself why you’re creating one and what is is you truly want to accomplish. If money is your only goal, or if you can’t answer the question at all, go back to the drawing board until you have a why.
Originally published on ChrisPfund.com.