In today's world, business leaders must look beyond profit margins and set their sights on larger goals that change the lives of everyone. Companies with a purpose or mission beyond profit have been shown to perform better in the short and long term than traditional companies.
Purpose-driven companies focus on positively impacting society and are unashamed about it. More than that, they are proud of it, and they reap the benefits financially, too.
If you're a business owner or a CEO, you always look for ways to grow and improve your company. One of the most effective ways to do that is to create a sense of purpose that's truly authentic and inspiring to others. This short article will serve as a primer to the topic and explore five reasons why purpose-driven companies outperform their competition and how you can implement these principles in your business.
1. Higher Employee Engagement and Loyalty
Purpose-driven companies attract the best talent because they inspire employees to be part of something bigger than themselves. This sense of purpose creates a strong emotional connection that motivates people to be more committed and engaged in their work. These companies encourage employees to work towards goals that matter to the company and society. This commitment translates into lower turnover rates and high employee job satisfaction levels.
2. Increased Customer Loyalty and Retention
Customers want to feel that the businesses they support align with their values. Purpose-driven companies have a shared belief or philosophy that resonates with their customers, creating a strong connection and loyalty beyond product or service. These companies are trusted by their customers and enjoy more referrals and repeat business. They make raving fans that serve as evangelists for their company.
3. Positive Reputation and Strong Brand
Purpose-driven companies have a positive reputation and strong brand recognition that set them apart from their competition. The company's mission becomes a North Star that guides all its operations, from marketing to sales to product development. They promote their commitment to social responsibility, which resonates with employees, partners, and consumers who want to feel good about the companies they work for or support.
4. More Resilient and Adaptive
Purpose-driven companies are flexible and adaptable since they clearly understand why they do what they do. This clarity in purpose helps the company navigate challenges and setbacks, providing a sense of direction and motivation that keeps everyone focused. They understand their strengths and weaknesses and focus on what they do best, making them more resilient and better able to weather any storm.
5. Greater Financial Performance
Purpose-driven companies tend to outperform their competition financially in the short and long term. These companies prioritize their stakeholders, beginning with their employees, contractors, and suppliers. In return, they enjoy higher profits and revenue due to their stakeholders giving more discretionary effort, creating better customer experiences, and limiting costs with an "owner's mindset." Therefore, these companies also tend to enjoy a higher valuation than traditional companies, making them more attractive to investors.
In conclusion, purpose-driven companies are transforming the way businesses operate. These companies prioritize people over profit, and in doing so, they are creating a better world for everyone and, more often than not, end up with more profit too! Purpose-driven companies tend to have higher employee engagement, customer loyalty, positive reputation, adaptability, and financial performance. Building your business around a compelling (and authentic!) mission is a powerful way to achieve success and make a positive impact.
So, business owners and CEOs, take inspiration from the many successful purpose-driven companies and think about how you can create a business aligned with a mission that's authentic and inspiring to you and your stakeholders. Your customers will respond. The research says they will drive further, stand in line longer, overlook your slight shortcomings, and pay you more to do business with you.
About the Author
Brian Audia is an inspirational leader in the movement to promote business as a tool for human flourishing.
He is passionate about increasing organizational performance through a scientific-based methodology that helps people engage more fully in their work and give more discretionary effort. Organizations with the highest levels of employee engagement will consistently outperform the markets and their competition over time through more significant innovation, higher customer satisfaction, and increased profits. They attract greater investment and sell at higher multiples. Most importantly, though, places of work with high engagement are places of joy where people thrive.
As a businessman, organizational development expert, and former nonprofit executive, Brian is honored as one of the Top 40 Alumni of Auburn University at Montgomery for his impact on the world, alongside two former Chairs of the United States Joint Chiefs of Staff. Brian has directed humanitarian and social service operations in over 40 nations and two dozen cities across the United States. He is recognized widely as a coalition builder and collaborative enterprise leader. He, his staff, and boards have consulted hundreds of organizations and managed tens of thousands of volunteers, raising millions of dollars around the globe and impacting lives for the better.
Brian serves as the President and CEO of AUDIA, a growth-oriented consulting company providing organizational performance and executive leadership services to increase the performance of businesses, nonprofits, and ministries. He has been married to his wife Melissa since 2000, and they have three boys, Caleb, Joshua, and Silas.