Purpose Belongs At The Core Of Your Business Strategy !!!

 

Purpose Belongs At The Core Of Your Business Strategy !!!

Purpose is defined as “the reason for which something exists or is done, made, used, etc.” Executives often focus on traditional success metrics, such as profitability, as they start their ventures. Yet, increasingly it has become clear that in order to create a thriving enterprise, they must put the corporation’s purpose at the center of their operation.

In the past, manufacturing principles drove business models. Here, work was divided into a series of tasks and numbers. The goal was to increase the difference in how much revenue the company generated and how much it spent.

Consequently, enterprises often looked at purpose in a superficial way. They viewed it as an ancillary item, but not a core function — one that needed to be articulated, emphasized and reinforced by management to employees.

Purpose-Driven Businesses Meet Two Objectives

As purpose moves from the periphery to its center of their business strategy, it plays two important strategic roles. First, it empowers companies to look at business objectives from a higher plane than traditional approaches. Purpose-driven organizations are not content to make incremental improvements to existing business processes. Rather than follow the old success metrics, they create new ones.

In essence, a purpose-driven firm tries to redefine the current playing field. These companies rewrite rules, shifting the focus from themselves to their customers. They know their actions impact others and try to safeguard employees, customers, partners and everyone around them.

In addition, they look at how business processes run now and focus on changes that will have a dramatic industry impact. They understand that everyone working together establishes substantial change. They forge unique business processes and methodologies that deliver game-changing, life-altering experiences.

Such alterations have become common recently with several significant technology advances. The emergence of mobile, cloud and agile development enable corporations to dramatically transform long-standing business models. Many high-profile, high-tech, gig-economy ventures in areas like hotels and car rentals disrupted well-established, multi-billion-dollar legacy markets – and opportunities to write similar stories exist in every business sector. 

Move Away From Products To Service

Second, purpose-driven companies reshape traditional market value propositions. Increasingly, companies are morphing from selling products to delivering services, a radical change for historically asset-based organizations. For years and, in some cases, even decades, their business plans revolved around manufacturing, production and the sale of goods.

Increasingly, corporations derive their raison d'être from delivering services. With the latter, they forge a long-standing relationship with their clients rather than a short-term business transaction. A purpose-driven approach joins with current missions to facilitate growth in new ways. 

Clear Management Hurdles

But shifting from traditional business metrics to a purpose-driven model can be challenging in many ways. As noted, new technology provides companies with the ability to rewrite traditional business rules. But individuals become comfortable with set routines, and in many cases, resist change. In fact, in an analysis of several surveys totaling thousands of respondents, only 22% of frontline employees surveyed like to leave their comfort zone.

Therefore, migrating from the old to the new can be an onerous process. Businesses have to allocate significant time, money and personnel to make the transition. Companies often lack the expertise needed to understand how to deploy new solutions and rewrite business processes. Finding a partner with those skills often eases the transition.

Why Build A Purpose-Driven Business?

So, why not stay in the traditional niche with its tried-and-true business principles? Purpose-driven companies expand much faster than competitors. In 2020, subscription services included in the Subscription Economy Index realized (download required) an 11.6% revenue increase while their product-based peers declined by 1.6%. In fact, such companies have grown nearly 6 times (more than 435%) faster than their opponents in the last 9 years.

Purpose-driven suppliers also achieve a higher workforce and customer satisfaction than their competitors, according to Deloitte. Such companies report 30% higher levels of innovation and 40% higher levels of workforce retention than their competitors.

A growing number of organizations have successfully made the transition and developed businesses where purpose sits at the center of the organization.

A consumer-goods supplier adopted sustainable living as a core value and set out to reduce its environmental footprint in a few product lines. They delivered 75% of the company’s revenue growth and increased 69% faster than the rest of its business units. 

In business for more than 190 years, a leading worldwide distributor of books, digital content and entertainment products focused on strengthening literacy, improving learning and offering individuals and communities an opportunity to change their lives for the better. They built a more comprehensive content repository, increased the likelihood that students will find needed information and reduced their technology costs significantly.

An electric vehicle company put reducing carbon emissions as its purpose. They streamlined the accounts payable customer support processes; improved operational efficiencies, decreased expenses; and enhanced supplier relationship, reduced query time, improved supply chain operations, lowered their computer costs and optimized resource utilization. They also reduced support costs by deploying artificial intelligence chatbots and replacing a FAQs process that was managed by human agents.

Today’s industry leaders must understand the value of building a purpose-driven organization and then determine how to assimilate that value throughout their organization. The work can be challenging in many ways, but when done well, it creates a business that is viable for the long-term.

If you have reached till here , Thank you very much for reading this blog. Have a nice day !!!