Your Company’s Purpose (And It’s Not Profit)

What is your company’s purpose? Is it strictly profit, or is there more? Some companies say their purpose is focused on the environment, feeding the poor or some other important cause. I think the word cause may be more appropriate than the word purpose in those cases. I propose there is a different purpose, one that supports the only way to guarantee success for your organization.

If I were to stand on a busy street corner and ask random people, “What is the purpose of a business?” almost all would say, “To make money.”

Dr. Theodore Levitt, the late senior professor at Harvard Business School, is quoted as saying and writing, “The purpose of a business is to get and keep customers.” Management guru Peter Drucker said something similar in his book The Practice of Management: “There is only one purpose of a business: to create a customer.”

Making money is the goal of a business, not the purpose of a business. If you confuse the purpose with the goal, you’ll not likely reach your goal.

Many companies want to have a purpose beyond their customers, such as the environment, feeding the poor or fighting cancer. All of these—and many others—are worthy causes centered on making the world a better place. However, the first purpose you must focus on is your customer. Without customers, you don’t have the revenue to not only be profitable, but also be able to advance the causes that align with your purpose beyond the customer.

So, for the purposes of this article (no pun intended), our purpose is focused on our customers.

In the incredibly competitive world we live in, and especially given the worldwide Covid-19 crisis, a company must understand its purpose. The Importance of Purpose was recently released by Gongos, a consultative agency focused on driving customer centricity for Fortune 500 companies. It teamed up with Harvard Business Review Analytic Services to more deeply understand how organizations use “purpose” to achieve “customer-centered growth.”

According to David Robbins, vice president of client consulting for Gongos, “What differentiates companies in terms of elevating the role of the customer and their experience is not the extent to which the customer is central to their purpose, rather how deeply that customer-centric purpose is embedded throughout all aspects of the organization.”

In the report, Jim Stengel, former head of global marketing at Procter & Gamble and now president and CEO of the Jim Stengel Company says, “A company’s purpose has to be rooted in its business and the impact it is trying to have on its customers’ lives.”

The report cites Brooks Sports, Inc., maker of running shoes and sports apparel, as a great example. Its purpose is to help its customers “run happy.” Another example is LinkedIn, whose purpose is “to connect the world’s professionals to make them more productive and successful.” Notice these are both all about the brands’ customers. They are very deliberate about the words they use to describe what they want customers to experience. These statements took a lot of time and effort to create.

Of the 434 executives surveyed, 92% said that “a customer-centric purpose delivers better business benefits than a purpose not centered around the customer.” That makes sense, and if that is the case, why aren’t more companies and brands focused on their purpose? To that point, why do only 38% of those surveyed say their company “has a customer-centric purpose deeply embedded in the mindsets and actions of employees”?

To have a purpose statement like Brooks Sports or LinkedIn is obviously important. I see it as more of a brand promise, and the most important part of that is the second word: promise. The promise is what makes the statement purposeful, hence why it is called a purpose statement.

The challenge in making that statement come to life is twofold. First, you have to create the statement. This isn’t done in one meeting. As already mentioned, this takes time. Some companies pay a lot of money to agencies to come up with their purpose statement. Then once you have it, the second step is bringing it to life. It could start with a marketing campaign, which could include print, television, social media and more. But that’s only the beginning. It truly happens when you embed the purpose statement into the company’s culture. The employees must not only know and understand it, they must live it. Stengel says, “This is where the heavy lifting comes in. If this doesn’t show up in every employee work plan and in their evaluations, it’s not going to be fully baked in.”

This is the real work—instilling the purpose into the company culture. Every employee must understand his or her role in the customer experience. They must know what their part is related to the purpose of your company, which is taking care of the customer.

Do you understand your purpose? Is it truly focused on customers? Or are you confusing it with your goal, which is to make money? Back in 2015, I had a fantastic interview on Amazing Business Radio with Tariq Farid, the founder and CEO of Edible Arrangements International. He was (and still is) a customer service fanatic. I love his line, “Don’t chase the money. Chase the customer.” That is still the perfect way to sum up the purpose behind a business.

This article was written by Shep Hyken from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.