1. What Is Purpose and Why Is It Important?
If people understand where the company is headed (vision), what the company stands for (mission), how they will work together to get there (values), and what must be accomplished (goals), then the strategy to get there can be understood and executed.
These four elements will ultimately define your company culture, the kind of people you hire, suppliers you work with, how you treat your customers, and even the quality of the customers you attract. Ultimately, it is the best way you can create a solid foundation for your business that will set the compass in the direction you intend.
If you are an entrepreneur, your purpose is further refined by the reason you started your business. It’s the passion, vision, and opportunity that inspired you to start the company. Company purpose is unique to every entrepreneur, just as personality is unique to every person. The goal in defining your purpose is to get clarity about what business you are in, how it is unique from others in the market, and the value you provide to all your stakeholders. A business does not exist solely to make money (although that is a nice goal). A business exists to provide value to customers who buy its products and services. If you focus on providing extraordinary value to customers, this alone can drive success.
Just to be clear, this section of your marketing plan is not about “fluff.” Most of us have been in strategic planning sessions (or have worked at companies) in which considerable time was spent drafting mission statements only to wonder about the significance of what was really accomplished. And surely as a consumer, you have had an experience where you observed a mission statement displayed prominently on the wall of a business only to discover the words in the statement were anything but your experience with the company.
Purpose-Driven Companies Make Higher Profits
If you want higher profits, have a purpose. Writing this section of your plan will increase profits while also creating a business that is more fun and meaningful for you, your employees, and your customers. Companies that clearly define their mission, vision, and guiding principles, and communicate this consistently across the organization, have significantly higher profit per employee than companies who perform poorly in this area.1 Success Profiles, a performance management company, studied 600 businesses and found that the average profit per employee in the survey increased from $7,802 per employee to $27,401 in companies that make this a best practice in their organization.
If you think things like mission, vision, values, goals, culture, and company purpose are merely “soft,” nice-to-have attributes for a business, this fact alone should change your mind.
As the leader driving the development of this important effort, you have the opportunity to create the experience people have with your company. If you are the company founder, you will develop the mission, vision, values, and goals to inspire your employees. If you are a marketing or strategic planning executive, you will have the opportunity to drive this process and communicate the messages in unique and creative ways so they are understood and integrated into the company culture. You will facilitate this important assignment and communicate the messages in your internal company brand campaign. As you will learn in the chapters that follow, an internal brand campaign is as important as your external campaigns because it inspires the actions and behaviors that ultimately become part of your brand.
We will explore several examples of companies that have done an exceptional job of defining their purpose. We will also look at a few special companies that have taken the road less traveled to create a company where company purpose is THE distinct competitive advantage for their company. Author Jim Collins defines the characteristics of companies like this in his book Good to Great. CEOs like Tony Hsieh of Zappos and Kimberly Jordon of New Belgium Brewery run companies powered by purpose.
Create Raving Fans
While hundreds of companies are beginning to embrace the concept of a purpose-driven organization, these companies tend to be the exception, rather than the rule. I find this surprising given the fact that not only are these companies adored by their employees and customers, but they also deliver consistent profitability and return to their shareholders. Perhaps I am oversimplifying this concept, but when you have a choice to run a great company versus a mediocre company, why not create a great company? Not only will you have more fun; but you will create loyal employees and customers who are “Raving Fans.”2
Raving Fans, the title of a book coauthored by Ken Blanchard, describes customers who believe so much in a company’s people and products that they actually become a part of the sales force. The way to create customers who are raving fans is to first treat your employees with great care and respect. If you do this, they in turn will care for customers. The result of creating raving fan customers, being the employer of choice, and the investment of choice is a “triple bottom line.” As Blanchard is famous for saying, “Profit is the applause you get for taking care of your customers and creating a motivating environment for your people.”3
Blanchard not only writes about companies with extraordinary purpose, he runs a company that lives by these principles every day. As Chief Spiritual Officer of The Ken Blanchard Companies, Ken Blanchard’s role is to lead others at a higher level. He not only does this in his organization, but he also teaches other companies to embrace this concept. If you don’t think this concept is important, especially in tough economic times, read on to see how Blanchard handled a difficult choice in our last recession during the period of time immediately following the 9/11 tragedy.
When Employees Leave at Night, So Does Your Business
In the first thirty days following 9/11, the Blanchard Company lost $1.5 million. During the economic downturn that affected most companies at this time, Blanchard was losing between $350,000 and $400,000 a month. He did not lay off people or shutter the business (as many other businesses did) because he said it would be the wrong thing to do. Instead he said, “Here’s the deal. This is what we’ve got to do. Let’s break into task forces and look for ways to cut costs and increase sales. Let’s see how we can all pull together.”4 Employees responded by agreeing to cut their salaries and stop paying into the 401k. If people quit, it was agreed that they would not be replaced.
As Blanchard observed the sacrifice his employees made, he declared that when they pulled out of the slump, he would take everyone to Hawaii. In February of 2005, he followed through on his promise and took 350 people to Hawaii for a celebration.
When Blanchard discussed his decision to handle a crisis in this manner, he said, “You know, without your people, you are nothing. That is the biggest leadership mistake most people make. They think people and results are an either/or proposition rather than a both/and proposition. At the end of the day, when everybody heads home, your business just left. So leadership is about your people. If you turn around and nobody is following you, you are probably not leading.”5
The result of a purpose-driven, triple-bottom-line company is a concept Blanchard calls the “Fortunate 500.” What I love about this concept is that the meaning of business success is redefined. Companies in the future will be successful not by their size, but by the quality of service offered to customers and the quality of life experienced by employees.
Company Purpose: Intentional or Dysfunctional?
This is what makes a purpose-driven company so unique: The words in mission and value statements are supported by actions that drive behavior. Company culture is ultimately (and simply) defined as “the way things are done around here.” As actions and behaviors define the culture of a company, it would be wise to do this in a purposeful way. Companies that don’t pay attention to culture or view it as unimportant will by default create an atmosphere that could be described as “dysfunctional.”
If you have a company that has been in business for several years, it will be helpful to reflect on what your purpose is today and what you intended it to be when you started it. An important part of the marketing planning process is reflecting on past results and taking a series of small incremental steps to improve based on the new knowledge acquired throughout the process.
If you have already defined a vision, a mission, and values for your company, ask yourself if they are still relevant or if they need to change. Ideally, a company’s mission and value statements stand the test of time; however, if you feel the statements do not accurately reflect where you are going today, now is the time to change them. The first few years of an entrepreneur’s business tend to evolve opportunistically; therefore, it’s extremely valuable to step back and evaluate whether your businesses is heading in the intended direction. Ask: “Have I communicated my company purpose so everyone understands where we are headed and why?” If not, this is your opportunity to create a solid foundation for the business. The future success and growth of your business depends on its purpose, so take time to complete this important first step in the planning process. As your marketing plan develops, you will see that purpose drives your marketing and business strategies.