Can Businesses Survive Without A Stated Purpose?
I’ve long been a convert to the idea that people and businesses are more likely to succeed when they have a clear vision of their purpose. Rather than simply trotting along from one task to the next without any notion of a bigger plan, life becomes more compelling and energised when we set out sights on cherished goals or actively set out to realise aspects of our better selves.
According to Will Hutton, who mulled on the subject of business purpose in a recent article in The Guardian, there is also a marked societal benefit to a business declaring its purpose. Rather than companies being setup to meet only the self-enrichment of their directors and shareholders, they should instead actively state their purpose and be ‘seen as vehicles for the marshalling and stewarding of human, physical and knowledge assets in the service of humankind.’ He ventured further that the Companies Act should be reformed to require all businesses to declare their business purpose on incorporation as a means to hold directors accountable, “to put business purpose at the heart of every enterprise and make it something for which directors are held to account”.
I strongly believe this proposed legislation change would help set the tone for a new, more positive and enabling form of capitalism where directors, employees and our wider society are set to better share the benefits.
In the past, I’ve found that business purpose was a subject only to be discussed with especially forward thinking company owners. These days, I’m delighted to find that businesses both large and small are far more open to the idea of starting from the point of purpose, brand vision and values when it comes to developing a new marketing plan.
To my mind this is the most important place to start, because without a vision at the heart of our enterprise, we simply resort to functioning as moneymaking machines.
What’s your business purpose?
When people first come to the idea of a business purpose, they often assume it has to be aligned to a lofty moral ideal. Maybe we need to be seen to be more charitable or we should be working harder to reduce our impact on the environment. These purposes are excellent, but from a business perspective, purpose can also be driven by some humbler principles. For example, you may focus on being a business that listens and responds to customers more effectively. Or you decide to set high standards when it comes to the delivery of your products or services. Current research also indicates that customers love it when businesses look after their staff well (Edelman), so that may be an aspect of your purpose that you want to bring into focus more.
What happens when you don’t declare your purpose?
No doubt, many businesses were able to get away with this ethos in the past when we had less transparency and customers were happy to follow those bright and shiny advertising messages. These days, the modern customer is ever more likely to up sticks and turn on their heels when they believe a business is solely driven by profit.
With no clear purpose, it’s also up to every director, staff member, customer and Jo or Jane on the street to make up their own minds about what the business stands for. Ultimately, this will lead to multiple interpretations and a lack of focused energy when it comes to projecting your business into the marketplace.
Benefits of a clear business purpose
On the other hand, when your purpose is clearly communicated, the benefits to your business are many. As well as attracting customers, a clearer purpose is especially helpful at drawing in higher quality employees, collaborators and partners. Take Hawksmoor, the Steakhouse restaurant business for example. Their Ethics page spells out the business founder’s focus and values and provides a very clear and attractive message to stakeholders across the board.
We try to do things the right way at Hawksmoor, not because it’s trendy and cool (we sourced British meat before it was trendy) or because we’re natural tree-huggers or hippy peaceniks. We do it because we want to – it’s the kind of company we want to be and the kind of restaurants we want to run. We want a business we can be proud of – whether that’s making sure the food we serve is as good as possible, that the animals the food comes from lived a decent life, or that everyone who works with us enjoys what they do.
Do you want to better define your business purpose?
If you’re thinking about better defining your business purpose, you may also be interested in commissioning a Brand Vision workshop from The Loop. In this half-day workshop, we’ll follow a step-by-step process that has been designed especially by Susanne Currid to enable small business owners to create a brand vision, mission and values set that has real authenticity. For larger businesses, we also have a process that can be implemented with a wider range of stakeholders.
To find out more about running a Brand Vision workshop for your business, please email me at email@example.com