Having a definitive purpose as an organization is essential to competitive viability and long-term profitability, according to Roy Spence, advertising-branding expert and author of "It's Not What You Sell, It's What You Stand For."
Spence, whose clientele include such companies as Southwest Airlines, Norwegian Cruise Lines and Wal-Mart Stores, proclaims the benefits of purpose with the same fervor an evangelist might contend for faith.
What is corporate purpose? According to the book, purpose is your company's basic reason for existence. It's about having passion for something that transcends being solely focused on profit.
The author makes an important point that having a strong, clear purpose is not an immunization to tough times - or even failure. Organizations with purpose are just as susceptible to strategic misjudgments, poor decision-making and marketplace challenges. The difference, according to Spence, is that purpose-based entities are more likely to survive or thrive during tough times.
The book offers a number of benefits to possessing a clearly stated purpose.
No. 1. Organizations with purpose achieve greater results. Numerous studies cited in the book purport that firms with purpose outperform the market by a 15-1 ratio, with revenues growing at rates of four times faster.
No. 2. Purpose attracts people who share your corporate values.
No. 3. Purpose provides employees with a sense of belonging, making them feel like their role in the organization is important.
No. 4. Purpose is a business driver that can help leaders improve or streamline their decision-making because the direction is clear.
No. 5. Purpose is a springboard to better branding and market positioning.
Spence is as pragmatic about his case for purpose as he is dogmatic, and he emphasizes that purpose must align with the core competencies of the organization, as well as the tangible needs of the customer. While the book offers few examples of companies that have errant purposes or that do not have one at all, it does provide ample anecdotal evidence of specific companies that are good role models.
I especially liked the author's numerous introspective, guiding questions for leaders: "If your employees were asked, could they state the organization's purpose clearly?" "Would your customers notice or mind if your organization ceased to exist?" "Does your purpose truly reflect why you exist?"
Spence says that leaders must be the torchbearers of the company's purpose, if there is any hope that employees will be acculturated and committed to fulfilling its values. Leaders, he points out, must be visibly living purpose and values - not just advocating for them.
I agree with Spence that staying committed to one's purpose even when it hurts is essential for leaders at every level. He points out that a leader's daily priorities as well as all major organizational decisions must complement purpose and values. When employees see inconsistency in what leaders claim is important, compared to how they act, the organization's purpose is weakened. The result is a missing energy that is necessary for sustainable competitiveness, innovation and ultimately success.
Overall, Spence does an excellent job in his book to lay out specific ways to create, launch and manage purpose. It is a worthy book for any leader's library.
Springfield-based consultant Mark Holmes speaks nationally on increasing employee and customer retention and improving employee performance. He is the author of "Wooing Customers Back" and "The People Keeper," and his ideas have been featured in the Wall Street Journal and on Fox Business Network. He can be reached at mholmes@thepeoplekeeper.com.
