Providing quality products and services is essential for generating profits and thriving. But many companies are discovering that having a clearly defined purpose — which can be loosely defined as a company’s ultimate goal or vision beyond its catalog — is just as critical.
A report from Harvard Business Review found that 58% of purpose-driven companies grew 10% or more over a three-year period. Consider these other benefits of including a company purpose in your planning:
Aligning employees with your company’s purpose drives performance.
A common myth is that the best way to improve or boost the performance of your employees is to give them more money. The reality is that financial rewards don’t automatically result in a corresponding rise in activity but connecting employees in meaningful ways to the overall mission of your company does. Research from Bain found that the productivity level of inspired employees was twice that of merely satisfied employees.
Purpose can turn employees into passionate company boosters.
We all want to be part of something bigger than ourselves at some point, something that we’re proud to be associated with. A purpose driven company can provide that relationship. Employees who believe in your company’s mission will be naturally inspired to spread your corporate message to the outside world. Additionally, they’ll also be inclined to support and help fellow employees because of a shared belief in the company purpose.
Recruiting and retaining workers gets easier.
A clearly defined purpose can also help you screen and recruit new hires. For example, HR managers can bring up the company’s process during the interview phase as a way to identify candidates who would fit best in the company culture or who respond enthusiastically. It makes sense that a candidate who embraces the same ideals as your company will likely be a more engaged worker. On the flip side, workers who believe in the company purpose will likely be more loyal and stay longer, cutting down on future recruitment costs.
Purpose-driven companies are more innovative.
Linking your company’s purpose to specific problems or openings in the marketplace can be a great way to foster innovation at your company. You can use your company resources and tap into your expertise to come up with solutions that can pay unexpected dividends. For example, Ricoh supports the United Nation’s Sustainable Development Goals (SDGs) – a global partnership to address collective challenges. The SDGs provide a blueprint to achieve a better and more sustainable future for all and Ricoh’s building blocks for these initiatives include people (society), planet (environment) and prosperity (economic activities). Through this purpose-driven initiative, the company is tapping a host of innovation from its own employee base – and other organizations who partner on it.
Purpose pushes employees to excel.
Employees want their companies to succeed for different reasons, but the desire is even stronger with purpose-driven companies. Beyond profits, purpose-driven companies reach the emotional core of many of their workers, touching them on a deeper level than just their paycheck. Employees and other company shareholders who feel they have a common vision are more likely to excel and to continually do better to help themselves and the company succeed.
As research has shown, having and promoting a clear, realistic purpose that goes beyond short-term sales goals can be a powerful, profitable tool for getting the most from your workers and your market share.
Watch the video to learn more: