How does your business performance measure up against the competition? Are you ahead of the pack, lagging way behind or somewhere in the middle? The simplest way to maintain peak performance is to keep your corporate purpose front and center.
Yes, that means purpose takes precedence over profits. Why? Because when companies place purpose at the forefront of their strategy, profit takes care of itself.
Executives overwhelmingly agree it’s a smart business move. According to a Deloitte study, 87 percent of executives believe companies perform best over time when their purpose goes beyond profit. And 84 percent of executives said purpose can affect an organization’s ability to transform, according to a survey by EY.
The Employee Connection
Employees play the most crucial role in the purpose-driven business. “Shareholder value is a result, not a strategy. … Your main constituencies are your employees, your customers and your products,” said the late Jack Welch, former chairman and CEO of GE.
When employees believe their job matters or when they feel connected to a higher purpose, it shows. Those who find their work highly meaningful are 69 percent less likely to quit their jobs within the next six months, says Forbes. And nine out of 10 people would be willing to earn less money if they could do more meaningful work instead, according to a Harvard Business Review article.
However, companies that put more emphasis on profit, market share, and shareholder returns are more likely to experience lower employee engagement, higher turnover and an uninspiring culture, says Forbes.
The Customer Connection
Purpose-driven businesses can look forward to an increase in customer loyalty as well. Customers are attracted to companies that align with their own core beliefs, and their purchasing decisions are influenced by how they feel about the brand. In a survey of nearly 30,000 consumers in 35 countries, 62 percent want companies to take a stand on issues such as sustainability, transparency and fair employment practices, according to the Accenture Strategy report, “From Me to We: The Rise of the Purpose-led Brand.”
When asked “What attracts you to buy from certain brands over others (beyond price and quality),” 66 percent of consumers think transparency is one of a brand’s most attractive qualities. On the contrary, 48 percent of U.S. consumers who were disappointed by a brand’s words or actions on a social issue said they complained about it, 42 percent walked away from the brand altogether and 21 percent never went back.
“By standing for something bigger than what they sell, tuning into customers’ beliefs and taking decisive action, companies have the chance to recast their customer relationships and connect with consumers on a deeper level,” said the authors of “From Me to We.” “Those that successfully activate a purpose-led brand will put the traditional view of ‘customer as buyer’ to bed forever. They will, instead, focus on creating a community of loyal, engaged and valuable brand stakeholders — all working together to usher in the next era of engagement and competitiveness.”