CEOWORLD magazine - Latest - Executive Education - How to Ensure “Purpose” Is Truly the Steering Wheel for Your Business

Executive Education

How to Ensure “Purpose” Is Truly the Steering Wheel for Your Business

A company without a purpose is like a ship without a rudder: It might go forward, but which direction it goes is anyone’s guess. Generally, companies fail to define a clear purpose for one of two reasons. In older organizations, legacy positioning can hinder purpose definition, especially if that purpose would require a major shift in brand operations. While there are exceptions to this rule (Johnson & Johnson, for example, is well-known for its strong belief in purpose), many established brands struggle to clearly define their purpose. 

More commonly, companies fail to identify a purpose because their leaders do not understand and appreciate the importance of doing so. A strong purpose drives everything behind company actions and provides a catalyst for progress throughout the enterprise. 

What Is Purpose in Business?

 Purpose defines the “true north” of the business, covering everything from product development to operations to customer experience. It simplifies the decision-making process by providing a strategic lens through which leaders can examine their operations. Employees need purpose to function — according to Gallup, around 50 percent of people don’t understand what their companies expect of them. Without purpose, internal teams operate independently, creating strife as departments vie for resources and attention. 

Companies with purpose are more attractive both to customers and prospective employees. Shared emotional connections motivate employees, influence culture, and increase productivity. Modern employees want more than a paycheck; they want to work for companies that make a positive difference in the world. Customers, too, want to shop at companies that are driven by more than just profit. 

Millennials started this trend, but Generation Z feels even more strongly about purpose at work. Where Millennials were satisfied with work-life balance and a bit of purpose thrown in, members of Generation Z strongly believe that the companies they work for should exist for purpose above all else. 

Purpose drives organizations both inside and outside company walls. To win (and keep) the loyalty of tomorrow’s customers and top talent, companies must define the organization’s purpose today. 

Why a Central Purpose Is Essential 

A purpose is more than a tagline. It’s the heart of the business and the brand, the guiding light that tells the company which way to go next. 

When Airbnb unveiled its rebranded purpose of “belonging” in 2014, it was much more than a marketing campaign. That focus on belonging has grown to provide Airbnb with a strong differentiator in the competitive hospitality industry. 

Airbnb took more than a year to study its brand positioning and discover a lasting purpose. The company studied users all over the world and competitors’ strategies to determine where it had an opportunity to stand out. Eventually, Airbnb settled on the idea of belonging, encouraging its customers to feel at home anywhere in the world. 

The tactic has worked well for the company so far — Airbnb is on track to earn $3.5 billion per year by 2020. 

Other companies can follow suit to discover a purpose that drives their success. CEOs should think about purpose as an enterprise-wide effort — not an isolated campaign, but a repositioning that provides a foundation for the company for years to come. 

Because purpose covers the fundamental reasons for the company’s existence, CEOs cannot take the identification of purpose lightly. Purpose allows CEOs and their companies to drive growth in several ways, including: 

  1. Navigating Transformation

Companies without purpose are subject to the whims of the market. If the industry goes one way, a company without purpose may be forced to follow that direction. Companies with purpose, however, can stay true to their purpose and tell their own stories. 

Failure to define purpose frees audiences and employees to assume whatever they want about gaps in company communication. If the company defines and regularly communicates its purpose, though, people will assume the best. 

  1. Supporting the Primary Business Ambition

Companies with a clear purpose are more able to grow than companies without. According to the Edelman Trust Barometer, customers are willing to try products from companies based on their reputation, but only sustained trust in that company can keep them coming back. Marketing attracts new customers, but purpose creates brand loyalists. 

  1. Guiding Strategic Priorities

Having a purpose provides the common ground that can be shared by the disparate parts of a business to form a cohesive enterprise that is more than the sum of its parts. 

Together, these elements — navigating transformation, informing the business ambition, and guiding strategic priorities — form the living vision of the organization. 

Antonio Lucio, CMO at HP, spoke on this topic at the Cannes Lions International Festival of Creativity: “The only way that you’re able to navigate all the social, economic, and cultural issues that we’re facing today … is by having a very clear and well-articulated sense of purpose that drives what you do,” he said. 

A company with an uncertain purpose is a company with an uncertain future. Organizations cannot afford to let the whims of others dictate where they go next. By defining a strong purpose and placing that purpose at the center of the company, CEOs can provide their businesses with the positioning they need to achieve sustained success.

Add CEOWORLD magazine to your Google News feed.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Thank you for supporting our journalism. Subscribe here.
For media queries, please contact:
CEOWORLD magazine - Latest - Executive Education - How to Ensure “Purpose” Is Truly the Steering Wheel for Your Business
MaryLee Sachs
MaryLee Sachs, co-founder of Brandpie and the CEO of the U.S. company, has spent over 25 years in the field of marketing communications and has also authored two books helping CMOs unleash their full potential. MaryLee Sachs is an opinion columnist for the CEOWORLD magazine.