Why is purpose so important to business culture?
Has COVID-19 made you re-think everything about your life? There’s no doubt that the period of lockdown has been a reflective time. This applies equally to businesses that are currently re-thinking the way they work. But there’s a danger that, in reacting to disruption, you might lose your original sense of why your company does what it does.
My tailor in Leeds (Michelsberg Tailoring) wrote a great blog recently that really resonated. He talked about how unscrupulous it felt for some companies to say they would adopt remote working forever. In his view, a company, like a family, needs a home. There is no good technological substitute for face-to-face. He talked about how much he loved people. And the fact that his profession puts him into direct contact with other human beings. I feel the same way. In my view, if your purpose is to create a great working environment and culture, this is much harder when everyone’s at home.
It is still rare to find businesses with a strong sense of purpose. Many of the CEOs that I work with struggle to find something meaningful. It’s just not a muscle that they’ve used before. Because they themselves have little experience of working in purpose-led environments, they haven’t really thought about it. But I can tell you, motivating your staff with purpose can transform your culture. I’ve seen this with my own eyes – it was one of the most powerful factors that helped me scale two tech businesses from zero revenue to £30 million in five years. Here’s why.
Gives an emotional connection to your ‘why’
Purpose is all about emotional connection. To be effective, it needs to be felt deeply by all your staff. I recently spoke to Daniel Priestly, best-selling author, speaker and visionary, for my Melting Pot podcast. He gave me a great hack for finding your purpose. There are seventeen United Nations sustainable development goals to transform our world. These were launched in 2016 with a 2030 agenda. Daniel suggests picking two, one practical and the other emotional. At the intersection of these, you will find your purpose.
The first will be obvious and fit with your business. In my case, that’s number 8 – Decent Work and Economic Growth. The second is something I feel strongly about, Quality Education, which is number 4 on the list. The charity I support is Dr Graham’s Homes. This is now a school for underprivileged children in India but was originally the orphanage where my grandmother spent her early years. Another of my clients is an Academy Trust working in deprived areas. They are obviously in the business of education (number 4) but are also passionate about number 10 – Reducing Inequalities. This gives their culture a strong message of inclusion.
The cynics amongst us would say the purpose of most businesses is to make as much money as possible. But this has little resonance with employees. Far more effective is to make your purpose around having a positive impact on the world. Properly articulated, this should be felt deeply by your staff, galvanising productivity and engagement. And guess what? This also increases profit.
Provides a clear direction forwards
A strong culture comes from having a clear sense of identity and direction. And these come from purpose. If you’re really certain about why you’re doing what you’re doing, you’ll see a way through any obstacles that crop up along the way. It’s almost like a north star, guiding you through the choppy waters of life.
This is all about what you’re trying to do. Every twist and turn needs to be in keeping with your purpose. So, going back to my earlier example of adopting more remote working, if your purpose is around building a great place to work, you won’t be in a hurry to ditch your office.
One of my clients, New Signature has defined its purpose as ‘To empower our customers, colleagues and communities to achieve their potential.’ They’re an IT services company so their purpose allows for IT to be an accelerant for their customers. It also speaks to the learning and development mindset they have inside their culture. Add to this a sense of giving back and their impact on local communities and you start to see the wide breadth of a well-defined purpose. They have a real sense of the type of company they’re trying to build and why they come together every day to do this. The day they cracked their purpose, the team of 13 people left my Management Lab with a noticeable sense of pride.
Tactical and strategic decisions become easier
At Rackspace, we took our purpose of ‘Fanatical Support’ through everything, asking ourselves, ‘Are we being fanatical enough?’ If we identified areas that fell short, we addressed them. Staff told us our maternity package wasn’t fanatical. We changed it to make it fairer for the female graduates we’d just hired. This involved taking our purpose and applying it more broadly in our culture, internally as well as externally.
We made important strategic decisions based on it. One of these was the sale of ServerBeach. This dedicated server business was a cultural mismatch and didn’t fit with our purpose so we decided to let it go.
Structural decisions become simpler when you have a clear purpose. At IT Lab, our Service ObsessionTM led us to restructure into multi-disciplinary pods designed around the needs of our customers. This helped to take our Net Promoter Score® from -5 when I joined to 55 by the time I left. A massive turnaround.
Returning to New Signature for a moment, their reference to community begs the question, what communities and how? Because they were now being deliberate about this part of their purpose, they could codify and communicate it more widely within their culture. They made sure new hires were told about this aspect of their reason for being. And they were able to give people time off to do voluntary work to support it.
Attracting and retaining the right people
A successful culture is founded on shared behaviours and beliefs. And these originate in your purpose. Knowing exactly what you stand for can have a massive effect on the people you hire. By articulating your purpose from the very beginning, you will attract people who share your vision. This will become a self-fulfilling fly-wheel that powers your business culture forwards.
Purpose can be taken through all aspects of recruitment and on-boarding. At IT Lab, our thing was Service ObsessionTM. This drove everything we did. Our orientation programme was called ‘The First 40’ and every hour was programmed. It ran on a monthly cycle, ensuring that all new hires received a full week of induction in their first month.
As part of this, I would talk to new staff about our purpose and tell them stories of heroes in the organisation. They’d be encouraged to go out and create new legends. One way was to give each of them £5 and challenge them to leave the office and do something meaningful with their money, together. They came back with so many funny and touching stories. Some had tried to give their money to strangers in the street (surprisingly difficult), and others had bought useful items for the homeless. In all cases, they’d hugely enjoyed themselves and got a real sense of the type of company they’d joined.
Raises productivity and happiness
Contentment in staff should be rooted in the sense that you’re in it together. You have a common bond that motivates you to get up in the morning and do good work. This common bond is your purpose.
The whole area of happiness needs to be approached tangentially. You don’t just wake up in the morning and decide to be happy. You need to work out what it is that makes you happy. And then do more of this and less of the things that don’t. In the same way, businesses where I’ve seen success haven’t set out to make more money. Instead, they’ve decided they’re going to attract and retain great people. And build a culture that those people love. Their love for their culture will then be apparent to their customers. They start to do great work for them. And, hey presto, the company becomes more profitable.
Where I’ve worked in well-functioning cultures, our aim was always to give fulfilment to our staff. We’ve used Dan Pink’s formula for motivation, ‘Purpose, Autonomy and Mastery’. If you can line up talented people who share your purpose, you’ll retain that talent and they’ll remain motivated. It’s crazy to say a leader’s job is to motivate their people. In my view, you need to hire self-motivated people who line up with your purpose. Then make sure they don’t get bogged down in meaningless processes and procedures that are so intensely irritating that they leave.
Personal happiness has always been the thing that drives me. I like to have an impact on the lives of the people I work with. When I was running businesses, the financials were always healthy. But the thing that made me feel good was seeing individual people blossom, learn more, earn more, do more than they’d ever thought possible when we hired them. We’d employ people with potential and the right attitude and then give them a workplace where they thrived. I knew they would go home happy and this would ripple out into their wider life – a happy husband/wife, happy kids, happy community… happy world!
Now, I get the same kick from helping business leaders do this. And it starts with defining their purpose. Everything else flows out from this. Isn’t it better if your staff love coming to work? I know that better engagement can unlock 40% discretionary effort – staff will give you more. But if you approach this cynically, it’s not going to happen. You need to be thinking ‘How do we create a great culture?’ And part of that is saying, ‘How do we make work meaningful’? What mission are we on?
It’s within the control of all companies to define what they’re truly about. As a Business Coach, I urge clients to give this proper consideration. It’s the foundation of a successful culture and without it, your company is unlikely to grow to its full potential. However, even more importantly don’t do this in isolation. You need to have a clear sense of your audience and I write in my article Why Simon Sinek is Fundementally Wrong about why who comes before why.