Larry Fink, CEO of BlackRock, started the year with a provocative challenge to the CEOs of the world’s biggest and most influential companies: What’s your purpose? As Fink framed it in his open letter, companies need to have a compelling long-term vision for how their business will sustainably benefit all of its stakeholders, including shareholders, employees, customers, and the community.
The idea that a higher purpose can play an essential role in driving business performance is not new. Johnson & Johnson’s credo has pledged to put “doctors, nurses and patients, mothers and fathers and all others who use our products and services” first since 1943.
Microsoft’s mission to put “a computer on every desk and in every home” fueled the company’s unprecedented rise. Google followed suit, and set its course with a commitment to “organize the world’s information and make it universally accessible and useful.” Jeff Bezos has been telling us that it’s “all about the long game” since his first shareholder letter in 1997. CVS Health quit selling cigarettes in 2014. Patagonia is setting a new standard for what it looks like to truly serve a social purpose with its deeply-considered environmental activism. And global business movements, like B-Corp, in which companies structurally commit to themselves and to shareholders that social good is central to their mission, light the path to make it easier for companies and investors to know what “good” looks like.
When we consider the challenges faced by people around the world today, it’s clear that the sustainable health and continued progress of humanity depends on whether or not the organizations at the center of the global marketplace are basing their decisions on more than their next quarterly earnings.
But if steering your business toward the betterment of humanity feels too altruistic — or maybe just too daunting — here are two more compelling reasons why your purpose should be guiding your most critical strategic and operational decisions.
A compelling purpose is a powerful magnet
When people inside and outside the organization know what it stands for, it attracts people who share the vision and repels people who are against it. In today’s digitally mediated market, people use brands to define and express their identity online.
When a candidate is deciding whether or not to take a job at your company, consciously or not she’s considering what being a member of your organization will communicate to her professional colleagues when she updates her LinkedIn profile. When a customer is deciding whether or not to purchase your product, she’s thinking about what that purchase means to her friends and family. We’re human. We want to connect and we want to belong.
But if your brand is just acceptable to everyone, it won’t be interesting to anyone. Purpose gives your brand meaning and social value in a digital world.
A compelling purpose attracts people and holds them together. Employees work in service of the impact you’re trying to make in the world. Customers stay loyal because they want to be a part of something bigger than themselves.
Also, like a compass, a clear mission tells you which way to go. This not only provides direction for your business, but can also unlock new opportunities.
A compelling purpose fuels adaptivity
Adaptivity is the result of the interplay between two essential ingredients: a unifying purpose and continuous experimentation in the service of that purpose. Unfettered experimentation without a unifying purpose is chaos. It means everyone trying randomly different things without any reference point to know if what they’ve tried is effective.
Having a clear purpose allows you to trust people. Purpose creates the opportunity to empower people — inside and outside your organization — to explore solutions beyond the bounds of your bureaucracy.
Imagine if you could trust that every employee at your company had a deep understanding and connection to your company’s purpose? Imagine all the untapped creativity and innovation in the minds of your employees and customers that goes wasted because they don’t have the freedom or authority to try something. When a company knows what its purpose is, It expands its appetite for risk and make experimentation safe.
The idea of purpose as a keystone to building and growing a sustainable business is here to stay. As many leaders are already beginning to realize, it’s good for the world and it’s good for business. The secret that only some leaders are discovering, however, is that the purpose of purpose is even bigger and more useful than we think.
Purpose tells you who you are and where you’re going. Purpose gives meaning to the lives of your employees and customers. Purpose unlocks adaptivity, and gives your business the ability to thrive in the face of uncertainty.