Generating maximum profits from your business is always a goal for the vast majority of business owners, presidents and CEOs, but should it be the primary goal? What if you could generate higher profits if your company is led by a greater purpose versus simply by going after bigger profits?
I’ve worked for some major corporations over my twenty year career and have noticed that successes and failures are usually connected to whether or not the company stays focused on its original purpose and stays true to its brand, as opposed to being led primarily by profits.
This principle seems to apply across all industries and companies.
In order to create a purpose-led business, you first need to define your…well…purpose for your business. This could revolve around social responsibility, charity or simply fulfilling an unmet need in the market.
Examples of Purpose are:
- Giving shoes to underprivileged kids
- Entertainment for the whole family
- Convenience stores in rural areas
- Creating computers for the non-tech savvy consumer
You can probably guess which companies are represented by the four purpose statements above (Tom’s Shoes, Disney, 7-11 and Apple). Some of these purposes have more social ramifications than others, but they all meet an unmet need.
So as the companies live out their purpose, they build a successful brand at the same time. In other words, purpose and brand go hand in hand. And when done well, the profits just seem to follow.
To further explain, let’s look at Disney. Walt Disney’s inspiration for creating Disneyland came to him as he sat at the park watching kids play. The thought hit him to create a theme park in which both kids and adults would have a great time (Purpose). After all, adults are just kids at heart.
Over the years, Disney has created or purchased movies, TV networks, resorts, consumer products and other media or publishing assets that continue to fulfill the purpose of being family friendly. As they have continually invested into this purpose they have developed into, arguably, the most recognized brand of family entertainment in the world and very profitable to boot.
It’s not enough to be purpose-led. The company must continue to invest into its brand if it wants to continually fulfill its purpose. If not, over time, even a purpose-led business will suffer and fail.
Some Who Have Lost Their Way
What are some examples of businesses that have failed to keep up with their purpose?
To protect the innocent, I won’t name the companies that I feel are currently failing to keep up with their purpose because there have been many companies that have fallen into this trap, but were able to regroup, refocus and invest into their purpose and be profitable again.
The following descriptions are of familiar brands that have either lost their purpose and/or failed to invest and innovate. You can tell when a business has lost its purpose because the products, services, and marketing are out of character (brand). When businesses fail to invest into their purpose, they tend to get left in the dust by their competition.
- Mid-level retailer trying to appeal to both the high-end and discount-driven customer
- Hamburger chain creating sexually suggestive commercials
- Smartphone leader with keyboard that was late to the touchscreen revolution
- Youth targeted clothier failing to keep up with trends
- Toasty sandwich restaurant toasted by competition
Invest Into Purpose
If you want to build a wildly successful business for the long term, determine your company’s purpose and continually invest into that. If you stay focused on the purpose, you will eventually build a respected brand that everyone will want to do business with. Build with Purpose!