Five Steps From Purpose To Profit

Every year, my firm surveys CEOs around the world about the role that purpose plays in their companies’ success

Our 2021 report is special. Conducted amidst the COVID19 pandemic, it offers a uniquely crisp picture of how businesses rely on their purpose during periods of uncertainty. We learned that nine in 10 CEOs (90%) agree that since the pandemic began, purpose has become increasingly important to the success of their organization.

The report also showed us where the business community needs to make significant strides in the value they place on purpose. Leaders must understand that purpose can contribute not just to stability in uncertain times, but to a stronger, more sustainable and profitable business in the long-term.

For example, one in five CEOs we surveyed ranked company purpose as the number one factor in driving business growth. Data showed that while leaders consider purpose important, they’re equally concerned about “practical” matters like talent attraction and retention, as well as company culture. And they absolutely should be.

But here’s the thing… purpose is the secret to attracting and retaining talent. It’s the secret to having a solid company culture. It’s also the secret to contributing positively to the wider world. And as 24% of CEOs rightly intuited, it’s the key to driving overall business growth.

It’s clear that purpose is at the heart of every other leading factor toward growth, and it’s the answer to navigating uncertain times. But purpose isn’t a passive, descriptive statement. It’s an active mode of operation. And 59% of the CEOs who took part in our 2021 survey admitted that they were not clear on how to put their purpose into action.

So what actionable steps can businesses take, from right now, to move toward a more purposeful, profitable future?

Step 1: Start Thinking Long-term

Here’s what we know: while nine out ten CEOs who have a purpose statement say that purpose is integral for driving initiatives across the business, over half the CEOs we surveyed confessed that they did not currently have a clear business purpose.

One reason purpose may be overlooked or feel ineffective in some cases is because many leaders feel beholden to shareholders’ short-term demands. As a result, they feel unable to prioritize long-term value creation. But we know from our 2020 report that leaders with purpose and long-term valuation in mind are nearly 10% more successful when it comes to acquisitions and adding services than CEOs that lack purpose.

So thinking long-term may be initially inconvenient, but it’s also crucial and worth fighting for. As a leader, you need to think about the value you will create in the future, and purpose is the tool that will help you do that. It is the roadmap for your organization that allows you to think long-term while still administering to short-term needs.

Step 2: Advocate for your stakeholders

Once you’ve got that roadmap drafted, it’s time to think about who you need to take on the journey with you. This includes your shareholders, but even more importantly, your customers, your employees, your regulators, your community partners – everybody connected to the business.

Your business must meet a need and must make a profit. That means you need your stakeholders on board – even more than your investors – because it’s their needs you’re making a profit by meeting, or their efforts that you’re meeting a need through.

So it’s imperative to advocate for your stakeholders in order to sustain your business, and it’s imperative to reflect this advocacy as part of your purpose.

If you’re really thinking long-term, you’re not just thinking about selling, you’re thinking about retaining the talent that makes your products and services special. You’re thinking about adapting to the times so customers can count on you through periods of uncertainty. And you’re thinking about protecting what’s valuable to everyone who is connected to your business.

Step 3: Contribute to the world around you

In an increasingly globalized landscape, the network of people connected to your business is more than likely incredibly vast. For some big corporations, that network of stakeholders is very close to the whole world.

But meeting the needs of the whole world is an impossible ask, and global challenges like fulfilling ESG goals are some of the most pressing concerns businesses face today. Purpose, however, can help you narrow it down and take action in a way that elevates both the business and the wider community. 83% of CEOs we surveyed agree - they believe purpose helps guide companies to contribute to a more sustainable world.

And “doing the right thing” for the globe doesn’t have to mean sacrificing success – in fact, when you approach ethical and environmental goals purposefully, the opposite is true.

Look at Nike’s initially controversial but powerful backing of the Black Lives Matter movement. Or take Oatly. The brand’s commitment to sustainability has made Oatly the monumental success it is today. Its profits soar year on year, and after high demand saw supermarkets sell out last year, the oat drink giant has increased its output by 1,250%.

Step 4: Deliver on your promises

Here’s where activation comes into play. You’ve got a map, you’ve got your people, you’ve got your goals, now you need to start moving.

Using your purpose to guide you, you can meet milestones along the way, to assure shareholders and stakeholders that you’re going in the right direction – that you’re following the guiding light of your purpose.

Now more than ever, employees are willing to call out surface-level mission statements. Customers demand transparency. Regulators have raised standards. Partnerships are more discretionary than they ever have been. For businesses with a defined purpose, higher standards of ethics and sustainability offer an opportunity to act in alignment with your business’s north star, to be a lightning rod for what you stand for as a business.

Companies like BrewDog, BlackRock, The Body Shop and many more are using purpose to inform their businesses from top to bottom. And when the going gets tough, as it did early last year, they doubled down on the kind of business they promised they were, by putting employees and customers first amidst uncertainty.

In short, activating your purpose is nothing more or less than showing up and consistently doing what you say you stand for. Stakeholders, and the rising number of shareholder activists won’t settle for anything less from your business, and neither should you.

Step 5: Keep following your north star

As the CEO of a purpose-led brand consultancy, I witness again and again how purpose is the ultimate key to building businesses that profit, and more importantly, businesses that profit and last.

Stat after stat from our new report prove my experience to be true – purpose is the guide that successful leaders follow when advocating for their talent, choosing partnerships, making difficult calls, developing expansions, navigating social and political unrest, you name it.

Knowing all this, I think it’s safe to say that the business community as a whole is moving toward a more purpose-driven future.

But no matter how popular the discourse around purpose becomes, it’s down to individual leaders to make purpose count on micro and macro levels for their business.

Purpose can be your north star – it can be the number one driver of talent retention and attraction, the value that underlines your company culture, the difference you make on a global scale, the need you meet for a customer… but only when you follow it at every turn. Only when you put it into action by using your power to plan, advocate, contribute, and deliver with purpose, day in and day out.