What is core purpose (and how do you find it)
Why start with Purpose?
Get that right from the beginning, and profit will follow.
In fact, studies by Harvard Business Review show that purpose can lead to profit.
Also, 10-year research by Millward Brown and Jim Stengel revealed that those companies that served a higher purpose were the ones that achieved the greatest financial growth. An investment in these companies – the Stengel 50 – over the decade of the study would have been 400% more profitable than an investment in the S&P 500.
Another survey study by Deloitte supports that “focusing on purpose rather than profits builds confidence and drives investment”.
It is clear that businesses with a genuine sense of purpose are more successful.
Once lived and breathed by every team member, core purpose increases motivation and happiness at work and becomes a north star that guides every company decision.
Defining your company’s core purpose is likely to be the most important strategic decision you’ll ever make. Yet most people exist in businesses with no purpose.
Every day, they go through the motions – turn up to work, do an ok job, and go home again. There’s no loyalty, no engagement, no joy.
What a dismal way to live your life.
Defining your purpose will be transformational. I’ve seen it with my own eyes. So, let’s dig into what’s purpose in business and how can you find it.
What is core purpose?
A purpose is:
- A visceral and emotional connection to why you’re doing what you’re doing.
- The difference you’re going to make to customers, your staff and the wider world.
- The legacy your company is going to leave.
In my early days as MD at Rackspace, we felt we were on a purpose-led adventure driven by circumstances beyond our control. I joined just before 9/11 in 2001. The business would have been sold the next day if the attacks hadn’t happened. But the stock market didn’t open, and the deal didn’t get done. With only three months’ cash left, we defined our purpose as one of ‘Fanatical Support®’. We recognised that our competitors were rarely if ever, exceeding customer service expectations.
Our new core purpose changed every aspect of what we did. Instead of hiring from our competitors, whose models were based on denial of service, we hired people with a hospitality background.
They really got service.
We hired for attitude and trained for skill.
New customers were used to calling tech support in their previous suppliers and getting arrogant blokes who treated them like idiots because they didn’t understand the problem.
What a breath of fresh air when they called us!
Our staff would throw themselves on an unexploded bomb for a customer. In fact, they’d go looking for that unexploded bomb!
Doing a good job for their customers gave them real satisfaction and personal joy.
There’s no doubt that Rackspace’s stratospheric growth was driven by its purpose. By delivering Fanatical Support®, we massively reduced customer churn. Our existing clients became the primary source of new business and were the reason we grew to £30m in only five years in the UK.
Work out your company’s purpose
When I start coaching clients, defining their purpose is top of our priority list.
Every leadership team member needs to get their One-Page Personal Plan, reflecting on their individual purpose.
What legacy do they want to leave?
If they were writing their own eulogy, what would it say?
What are they passionate about?
I’m looking for emotions, not logic. The things that make the hairs stand up on the back of your neck.
Having shared these insights, we discuss what they’re doing here.
Over the next 3 to 5 years, what do they want to achieve for their customers, staff, and the wider community?
What impact will they have on these people?
What’s important to them?
The Hedgehog Concept
I often reference Jim Collins’ work from his best selling book, ‘Good to Great’. His approach revolves around what he calls the ‘hedgehog concept’ It’s based on the ancient Greek parable of a fox trying every trick in the book to eat a hedgehog. Collins argues that your company is more likely to succeed if you can identify the one thing you do best.
It sounds simple, but it will take time to define this, working through three specific areas.
- Isolate the things that give your company energy and passion. Look at what gets you and your team out of bed early in the morning and keeps you working late voluntarily.
- Define the one thing that you can be best in the world at – something you know you can do better than anyone else.
- Finally, examine the things that drive your economic engine in terms of profitability and market potential.
The Hedgehog Concept by Jim Collins
Once you have your mantra, check it resonates and excites the executive team.
‘Fanatical Support’, our mantra at Rackspace, felt like we were changing the world.
Embed purpose in your company
It’s not uncommon for businesses to lose their sense of purpose as they grow.
Somehow, it’s not fully embedded in the DNA of the company.
Take Cloud IQ as an example. When I began working with them, they’d been through a period of x5 growth in 9 months.
Often organisations hit a plateau at this point, so it’s vital to be really clear on who you are to attract the right people and repel the wrong.
The executive team didn’t know about their purpose. So, I got their CEO, James Critchley, to tell them the company’s founding story. It’s a good one!
The original founders were eight guys who had met at Ogilvy developing marketing technology for customers. Throughout their careers, they’d felt strongly that customers were overpaying. So strongly that they got together with no business plan but a solid drive to democratise the market. They codified their purpose – to produce an effortless e-commerce marketing platform.
It was clear that this story hadn’t been properly communicated. The executive team had been hiring employees without having clarity on purpose. So, we ironed this out, defining purpose, values, and BHAG.
Next, we appointed a culture committee whose task was to embed these throughout the company. Now they have a common language and direction of travel.
It’s been hugely gratifying to witness Cloud IQ’s evolution as a company with purpose at its heart.
Do it right, and defining your core purpose can completely transform your business, from the suppliers you choose, the staff you recruit and the path you navigate. Re-imagine, capture, create or pull from history what the true purpose of your business is. Then, with this solid foundation, you’ll see profits rise, staff get happier, and your business grow to its fullest potential.
P.S. Not sure if you’re heading in the right direction? Take the Scale Your Technology Business Scorecard to find out.
Dominic Monkhouse