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Most entrepreneurs enter this room because they want to make a positive impact in the world. They have a purpose and a mission. You see a problem; You can find a way to solve it. The reasons we do the things we do are everything.
However, it can be all too easy to lose sight of this as we continue down the road. When investors demand returns or when wagering requirements become more urgent. When we start working longer and when our own ego gets in the way.
Purpose and profit, however, are closely related. Maybe you can have one without the other, but when we turn to a multi-millennial and Generation Z-led workforce (born between 1983 and 2003), the case where both are in place becomes far more compelling. And yes, profitable.
Related Link: 5 Ways Business Owners Can Combine Purpose and Profit
1. It looks like a north star
When you are clear about yourself and the purpose of your company and what you stand for (and do not stand for), it is easier to make decisions and evaluate opportunities. This can range from the people you bring on your team to the partners you work with to the customers you want to attract.
As a startup or small business, you cannot afford to explore every opportunity that comes up, constantly looking for the shiny and new. Focusing on the right activities will optimize costs and produce better results that are better aligned with the direction of the business. Of course, you may not always get it right, but you will have focus in your decision making. Then there is trial and error to be really innovative.
When you have that compass to guide you to suitable opportunities to explore, you have the freedom to experiment and find out which "dead paths" to quickly trim and which key areas to focus on. Focusing on a few core areas affects the bottom line.
Related Link: How 80% of Earmarked Brands Outperform the Market
2. More motivated employees
Which employee is really attracted and emotionally engaged by spreadsheets, data, and KPIs? What about money? Over the past decade, we've seen research suggesting that money isn't the main motivator for many people – in a meta-analysis study by Tim Judge: “The authors reviewed 120 years of research to get the results from 92 quantitative ones Summarize studies. The combined data set comprised over 15,000 people and 115 correlation coefficients.
The results show that the relationship between salary and job satisfaction is very weak. The reported correlation (r = 0.14) shows that there is less than 2% overlap between pay and job satisfaction. In addition, the correlation between pay and pay satisfaction was only slightly higher (r = 0.22 or 4.8% overlap), indicating that people's satisfaction with their pay is largely independent of their actual salary. "
While some love data and some love money, what really keeps and motivates people is a story, a mission, and a purpose. Purpose trumps motivation.
A strong corporate purpose – and to convey this clearly to your employees – creates a common philosophy and culture. Everyone has a role to play in this culture and acts in their own individual and unique way. We become an effective part of something greater than us.
Imperative, a US consulting firm, surveyed 2,000 LinkedIn employees and found that 41 percent could be classified as "purpose-driven." Why should LinkedIn care? "According to Imperative, purpose-driven employees are 54 percent more likely to stay with a company for more than five years and 30 percent more likely to do better."
Low fluctuation and productive employees mean a positive impact.
Related link: communication purpose can create a boom in business
3. Customers love a focused company
Think Airbnb, Nike or Apple. What do all these companies share? Aside from being very successful, they all share a strong purpose.
They all have a narrative that makes a huge impact in their marketing and branding. They all made an emotional connection with their audience.
In these times of crisis, people instinctively want to be part of companies that promise to change things for the better and have a positive impact on them and the world around them, but the reality is that many companies fall short. In the 2018 Deloitte Millennial Survey, 40 percent of respondents believed that the goal of companies should be to "make society better". In the 2020 Deloitte Millennial Survey, barely half of millennials believed business was a driving force.
This, of course, means that companies have a real chance of reaching this younger, purpose-driven generation by actively showing their commitment to the cause. This gives companies that do well a competitive advantage. Data actually shows that customers are more loyal to targeted brands.
An example of the increasing importance of the purpose is the B-Corporation founded 14 years ago in the USA. B-Corps are companies that are committed to balancing profit and purpose and taking into account all stakeholders in the company, including employees and the environment.
According to Reuters, the number of companies applying for B-Corps status rose 25 percent in 2019. Although companies that are classified as B-Corps make up only a very small fraction of companies overall, does the B-Corps represent the wave of the future?
As entrepreneurs and entrepreneurs, it is time we stopped looking at purpose as a "soft" concept that does not affect the bottom line and investigated the pitfalls of not embedding a strong purpose in our organizations. Having a purpose alone is not enough; It has to be anchored in the company's culture and processes. Making the effort to do this is a long term game. Not to do so, however, would mean ignoring the signs that this is the direction business is headed.