- When we look at large-scale companies generating high profits, it is important to note what their driving strategies are. On taking a closer look, one can note that the three main determining strategies known to drive these companies are:
a) Developing new markets
b) Catering to larger stakeholder needs
c) Evolving with the rules of the game
But with all these, one important factor that most companies forget to implement is putting purpose into their core strategy. It is surprising to see how so many companies had faced a boost in growth however, completely forgot about the main driving factor, purpose.
2. Now we know that purpose is a key factor in the overall growth of any company, the question that arises is that why is it so significant? Why does a company need a purpose if it is performing well? Companies have long been told to build and develop a purpose for what they do. But in most of the cases, it’s talked about as an additional aspect or an add-on—a way to create shared value, improve employee morale and commitment, give back to the community, and help the environment. When we take a deeper look at the high-growth companies, we realize that many of them had moved purpose from the boundaries of their strategy to its core—where, with the assistance of financial investment and dedicated leadership, they had used it to bring sustained profitable growth and also to stay relevant in a rapidly changing world, and deepen ties with their stakeholders.
3. Now to give an example of how a company can improve significantly by redefining its playing field, What do you think is the main difference between low-growth and high-growth companies? While low-growth companies spend most of their time fighting for market share on a particular playing field, which naturally limits their growth potential. And due to the fact that most aggressive battles occur in industries that are slowing down their pace, gains in market share are brought up at a high cost, often eroding profits and competitive advantage as offerings end up becoming just commodities for their customers.
Coming on to high-growth companies, they don’t feel restricted to their current playing field. High-growth companies or organizations like these focus on the complete ecosystems, where interconnected interests and relationships among multiple stakeholders lead to more opportunities. But these firms don’t approach ecosystems in an unorganized or unprincipled manner, rather, they let purpose guide them.
4. There are many leaders and companies that have efficiently defined corporate purpose typically, have been able to do so by following one of these two approaches: retrospective or prospective. The retrospective approach develops on a firm or company’s existing or current reason for being. This approach allows that you look back, codify organizational and cultural DNA, and learn from the firm’s past. The emphasis of the discovery process is internal. Where have we started from? How have we collectively gotten here? What makes us different from other companies? What are the future opportunities we are looking forward to? These are the kinds of questions leaders have to raise and introspect about.
5. Leaders need to observe and ponder upon how to make purpose central to their strategy. The two best ways for doing this are to change the leadership agenda and to spread the purpose throughout the organization.
6. Other than all this, purpose can also assist with the soft side of management—the people-related aspects of working on a business, which so often proves to be the cause of the downfall of leaders. If you are putting purpose at the core of the strategy of your firm, you will realize three key benefits:
a. More-unified organizations
b. Highly motivated stakeholders
c. Larger positive impact on society
7. The approach towards a purpose that we’re encouraging cannot be a one-time effort or evaluation. Leaders constantly need to assess how purpose can help them in developing strategy, and they need to be flexible to adjust or redefine this relationship as situations evolve. It might demand a varied kind of sustained focus, but the benefits it can bring about are huge.