For entrepreneurs in a world emerging from Covid, having an authentic purpose is more important than ever. It attracts potential team members, inspires customers and is a point of difference for potential investors. The challenges of startup growth are significant, and the unifying power of a clear purpose can drive teams to exceptional results.
There is significant research that shows purpose driven companies are more profitable and valuable. For example, a Deloitte survey in 2019 found that “Purpose oriented companies have higher productivity and growth rates, along with a more satisfied workforce who stay longer with them … such companies report 30 percent higher levels of innovation and 40 percent higher levels of workforce retention than their competitors.”
For entrepreneurs, the benefits are more direct. It is a powerful unifying theme that helps entrepreneurs get through the tough times, attracts great team members and is compelling for customers. For example, the Deloitte Millennial Survey highlights that 75 per cent of millennials are skeptical of corporate motivation. A significant percentage are looking for purposeful organizations to work with.
In my experience, there are several stages and typical pitfalls for entrepreneurs seeking to define and embed purpose and matching values in their company. The passion and excitement of a startup is naturally compatible with a sense of purpose, but it is not always captured and formalized. The entrepreneur can be very clear about purpose, vision and values, and assume that the team shares these by virtue of their frequent contact and generally aligned discussion and behaviors. It is important to make the effort early to clearly articulate the inspired thinking that led to the start of the business, and formalize this as a statement of purpose.
A purpose statement is a first step in building a great company. It won’t make the company successful on its own. There must be the right business concept, planning, systems and structures across the business. A clear purpose and set of values will make it easier to arrive at a point where all this is aligned, and the right people (in the right seats) are driving the business forward.
Define Your Purpose
The founder’s vision for the company and the problems it will solve are the starting point for purpose statements in entrepreneurial companies. It may still take work, and constructive feedback, to arrive at the purpose and from that vision and values that is right for your enterprise. For an entrepreneur, it is important for business purpose to align with personal purpose, and I suggest a period of mindful and focused introspection to determine what this is.
The purpose should be specific enough that it is relatable, but still inspire. It will also put some boundaries about what the company offers. You can’t be all things to all people, and arriving at the necessary focus can involve some hard decisions.
It may need revisiting as the company evolves, but you need to be careful not to tinker to much or too regularly – ever changing purpose or vision statements are quickly dismissed by team and external stakeholders.
Articulate it Clearly
Finding a succinct, inspirational and powerfully relevant wording for the purpose statement is something of an art form, but worth the effort. It should be short and clear, easily remembered, and inspiring. Focus on what it is specifically you want to do and keep the purpose narrowly around this. This focus will be compelling for staff, customers and investors – it means you stand for something.
Embed it Across the Business
There are a few steps to getting the purpose statement properly embedded in the business.
The founder needs to passionately communicate the purpose and values internally and externally – refer to it frequently and link it to product and business activities. By living the company’s purpose and values, the founder will show to new team members what the standard is. Work out a few rules of the road as to how the purpose will work in practice – this might even mean having a few examples or stories of how purpose might work thought. In the bustle of a new venture, taking the time to do this may seem lower priority, but its essential to get it done early.
I would encourage entrepreneurs to ensure they have one or two honest brokers around them that can call them out at times when they depart from states purpose and values – and even to be willing to discuss this with the team. The great the commitment and transparency, the more it will stick. This will help you maintain the courage, transparency and humility.
By living the purpose and holding yourself to account, you have a chance at getting full buy-in and engagement from team members. Conversely, if you fail to live up to your declared standards, the team will feel betrayed and its very hard to build that lost trust back again.
One of the other advantages of having a well worked purpose and values at an early stage is to bring them in as a gating item for new team members, directors and investors. This is our purpose and values – how do you feel about them?
Check-In and Monitor
Growth companies can move quickly, and yesterday’s bright idea can soon be forgotten under the pressure of new events, funding rounds and typical stresses. Put in place a regular monitor and review process that is not too resource intensive, to ensure that the purpose and values continue to be activated. This will necessarily involve some team members, and that of itself is a benefit.
Over time, the fact that you have defined, propagated and sustained a compelling and inspiring purpose that is relevant across stakeholders will be a major selling point for potential investors, team members and employees. It will also continue to be an important compass for the entrepreneur and leadership team.
Long Term Impacts
When implemented properly, with the right combination of inspiration and discipline, the results can be very rewarding. Put simply, a more aligned, motivated and resilient business where people are more committed to go the extra mile. All this will add up to better financial outcomes for the business, as the research suggests.
One of the most rewarding results of having a clear purpose and set of values, in my experience, is that you are more likely to encounter and deal with like minded individuals and companies. As mentioned above, employees and customers will be attracted by the ethos. But as well as that, business partners, potential strategic alliances or even acquisition opportunities that are aligned with what you stand for are more likely to emerge.
- A well-expressed purpose binds the company around a unifying reason for the company’s existence – the problem that they are trying to solve above and beyond profitability.
- This attracts and retains better staff, is inspiring to customers and can set you apart with investors. Importantly, it gives the entrepreneur the ability to get through the tough times.
- Purpose, vision and values must be embedded across the organization and lived by its leaders day-in and day-out.
- Having the right purpose, vision only works well in combination with good business planning, systemization of the business and overall execution.
Entrepreneur Purpose assists entrepreneurial companies define their purpose and implement it effectively. Our experienced advisors assist our clients distil purpose, and then embed these in the organization, along with best practice business planning, systems and tools. Contact us for a complimentary introductory discussion.