11 May Purpose-Driven Performance
What if the only thing you had to do to boost your sales, increase customer loyalty and bring about long-lasting success, was to focus on purpose-driven action? Well, the best news you’ll probably hear today is that is all you have to do! You might think that I’m making it sound way too easy, but if you’re willing to dig deep now, the rewards are invaluable!
The Proof is in the Pudding
Former P&G global marketing director Jim Stengel combined and analysed 10 years of data from 50,000 brands and found that there is a physical direct link between a brand’s ability to serve a higher purpose for its customers and its financial performance. Stengel found that companies with a focus on bettering their customers’ lives, grew 3x faster than companies that weren’t putting purpose at the forefront of their products.
Stengel went on to create the ‘Stengel 50’ and if someone invested in the ‘Stengel 50’ over that decade, they would have made 400% more profit than investing in the ‘S&P 500’! That is bucket loads! All because these companies focused on their purpose!
Purpose is the ultimate growth driver! And this is the proof! It is crystal clear that the companies who do the hard work to create a cohesive purpose that flows from CEOs to HR to marketing and every sector in between, are the most successful and are the fastest to grow and profit!
What is Your Ideal?
Jim Stengel talks about company ‘Ideals’ and describes them as “the higher-order benefits a brand or business gives to the world.” Basically, ideals are the ultimate purpose that companies serve to the world. Stengel described two types of ideals: explicit and implicit. Companies that are explicit about their ideals, wear their purpose on their shirts or advertise using a catchy slogan that screams their ideal to the world! Take Red Bull for example, “Gives You Wings”, they are about enhancing the body and the mind, and everyone knows it.
There are some companies that are more implicit about their ideals. Louis Vuitton, for example, whose aim is to enhance the everyday lives in a luxurious way. They don’t print that all over their bags or clothing, but everything within the company aims to convey that luxurious ideal to their customer, and it clearly works! So, whether a company’s ideal or greater purpose is explicit or implicit, it doesn’t matter! What matters is that a business knows its purpose and everything that they do is in line with that purpose.
Do you know what your company’s ideal is? What is the greater purpose that you are serving to your customers? Is that ideal explicit or is it implicit? These are important questions that businesses need to ask themselves because clear answers to the questions are what got the companies in the ‘Stengel 50’ into the place they are! For the consumer mind, ideals help to elicit joy, establish connections, inspire pride, and impact society. These are the benefits that your customers get by you having clear ideals and a cohesive purpose within your business!
Start With Why
“People don’t buy what you do, they buy why you do it.” Simon Sinek said this in his viral and powerful TEDx talk. If you are feeling lost in the process of re-defining purpose, you need to start with why. Purpose-driven action requires purpose, so ask yourself the questions that get to the heart of why you started your business, and why you’ll keep going! Without answering this question for yourself, your business will suffer under the lack of direction of not having clear ideals.
Once you have your why, it is important to ensure that your employees know your why, but that they also have a firm knowledge of their own why. It is all well and good to have a CEO that knows the why, but if employees don’t believe in it or align with it, the lack of cohesion can throw big spanners in the works. Employee alignment is important, and by that, I don’t just mean having a purpose statement that everyone knows but does nothing about. Have a why that inspires a call to action by your employees.
Having a shared purpose between CEOs, employees and customers is a powerful position to be in, and that is where purpose-driven success lies! But be prepared as a leader with a powerful why, that you’ll have to consistently walk the walk, not just talk the talk. But having a purpose that you truly believe in makes this walking the walk a little bit easier!
Purpose-Driven Action Drives Success
To sum it all up, purpose-driven action drives success. Start with your company’s why, and create an ideal that you are passionate about. Make sure that the ideal cohesively flows through the entire company in every sector. As leaders in modern-day business, purpose cannot be skipped over or skimmed through, it must be thoughtfully incorporated into the heart of the business to bring success!
If you are wanting to find out more about running meaningful companies in modern-day business or creating more purpose-driven action, contact my team ‘here’, we’d love to help!
Hey! You’re Biased! – #13 Endowment Effect
Have you ever owned something that you loved so much that you would be willing to pay any price to keep it? If you have, that’s the endowment effect at work! The endowment effect is when people own something, they will irrationally overvalue it. People feel the loss twice as strongly as we do the pleasure and will be prepared to pay more to retain what we have. A quick example is that scientists divided a group of people and gave half of them coffee mugs, and the other half became the buyers of the coffee mugs. When asked, the sellers/owners of the coffee mugs gave a much higher price of what they would sell the mug for than what the buyers were offering. Let’s get unbiased!
Business Wire. (n.d.). Millward Brown, in partnership with Jim Stengel, Reveals the 50 Fastest-Growing Brands in the World and Uncovers the Source of Their Success. Business Wire. https://www.businesswire.com/news/home/20120117005066/en/Millward-Brown-Partnership-Jim-Stengel-Reveals-50
Macquarie. (n.d.). How to define your true business purpose. Macquarie. https://www.macquarie.com.au/business-banking/how-to-define-your-true-business-purpose.html#:~:text=Purpose%20is%20your%20reason%20for,strategy%20and%20mission%20are%20executed