Ever since Simon Sinek’s 2009 TED Talk went viral, “finding your WHY” has become extremely fashionable for businesses of all sizes. For many business owners and leaders, Sinek’s video was their first encounter with the idea of leveraging the purpose behind an organization.
And Sinek’s ideas, while not unprecedented, have had a seismic impact. His basic argument is that while most companies understand what they do, and how they do it, they don’t generally understand why they do it—and as Sinek and many others have contested, understanding this WHY is crucial for long-term business success.
So the question is… is it really? Would all companies truly benefit from understanding their WHY? The purpose that goes beyond simply building good products and generating a tidy profit? Or, is this more of an abstract concept that can’t (or perhaps shouldn’t) be applied to real, functioning businesses?
In this piece, we set out to answer whether having a strong purpose is actually important to the health, longevity, and success of a company.
What it really means to have a purpose
Purpose is why you do what you do. For most employees, their WHY would appear to be “to make money”. But the real answer is “to make money so that…” they can enable the most important parts of their lives.
In business, it’s the same. Your company has to make money, but that’s not usually its purpose. That’s not the owner’s purpose.
The WHY for Southwest Airlines, for example, isn’t to provide reliable or cost-effective flights. It’s to connect people to what’s important in their lives through friendly air travel. This gives the company an identity that sets it apart from other airlines.
To take another example, Airbnb says that its purpose is to connect millions of people in real life all over the world, through a community marketplace– so that you can belong anywhere. When building its features or registering new properties, then, it’s not just about tasks and cleanliness—it’s about creating a place where people belong.
These purpose-driven businesses understand that believing in something bigger than their raw operations—that having an identity behind every decision—allows them to connect to their ideal customers (and their employees) better than the (less purpose-driven) competition.
They also realize that selling the WHY of their business—not the what or the how—enables them to rally people to their cause, providing extremely loyal customers and sustainable growth.
How can you find your purpose?
An organization’s purpose is a combination of many factors. It’s the vision of the founder when the company started, and it’s something that is evident in corporate actions, company ethos, and the way employees and customers are treated.
The easiest time to determine the purpose behind your business is right at the very start. Whatever was driving you to start a new business is your WHY. But over time, this purpose might transform and change.
Many companies, like those we looked at above, are able to put a clear name to their purpose. But sometimes it stems from an internal motivation that’s hard to articulate. But even if you can’t yet describe your purpose clearly, you can still fulfill it.
Are you working to your purpose?
It’s crucial to understand (or figure out) what your purpose is—but you can’t stop there. You need to make sure you’re actively working towards it, backing it up, and building the right kind of business. We’ve identified 3 common threads between businesses (and business owners) that are working to their purpose:
- They’re driven beyond the short term
- They have a hard-coded belief in social responsibility
- They are energized by their work
Being driven beyond the short term
Businesses with a strong sense of purpose tend to last longer. It’s never about making a quick buck, but rather becoming more and more effective at fulfilling their purpose. When you’re driven to make a lasting difference as a company, it allows you to see past the short-term goals, targets, and issues.
If you speak to a business owner about what drives them, those who understand their WHY will always talk in terms of ambitious, long-term goals.
A hard-coded belief in social responsibility
We usually talk about social responsibility in terms of massive global organizations. But it applies equally to smaller businesses with a desire to give back to the local community, improve the lives of their customers or employees, or generally help make the world a better place.
Companies that truly understand their purpose—and actively work towards it—are almost always taking their social responsibility seriously and making a lasting impact. It’s not the scale of impact that’s important, but the commitment to it.
Feeling energized by the work
Fat salaries and bonuses cannot sustain us over the long term. We see it so often: those whose jobs are 100% about making big money inevitably get burned out. Businesses and employees need a stronger purpose than income to feel energized and focused and ambitious on a daily basis.
When someone has been grinding away relentlessly for years and still has a raw passion and energy in their daily work, you know they’re being moved by something more important than profit.
The benefits of working with a purpose
Since early 2020, the importance of purpose has grown astronomically in both business and personal contexts. The rapid and substantial loss of normal activities, stability, and incomes forced us all to consider: in this new context, what are we doing? More importantly, why are we doing it?
And this isn’t a hypothetical. Businesses without a strong purpose are currently facing a talent crisis. As many as 40% of workers are currently open to new opportunities with brands that take better care of employees and are more socially responsible. Companies that fail to see this rising tide of purpose will surely be swept away by its current.
Here are three cast iron benefits of understanding and working to your WHY.
Better employee engagement, performance and retention
When it’s clear what purpose is really driving your organization, employees have something tangible to root for. Most workers are not ultra-motivated by the physical work they perform. But if they can buy into an ideology or a purpose beyond the simple labor and paycheck, it can make them more interested, more loyal, and far stronger brand advocates.
Articulating your WHY and making it part of the culture is every bit as important—if not more important—for employees as for customers.
Increased customer loyalty
By understanding your WHY, you can make it a visible part of your company culture, your branding, and your personality. For comparable products, customers that resonate with your purpose will be far more likely to buy from you than a competitor.
This trend is only becoming stronger over time, meaning companies that exist just to “make products” are going to be left further behind. It might sound cynical, but it’s no surprise that brands are increasingly taking stands to let their customers know they care—it’s all about demonstrating their purpose; their WHY.
Faster and more sustainable growth
Companies with a strong sense of purpose are able to transform and innovate better. They’re also up to 50% more likely to be successful expanding into new markets. And with more engaged employees and customers, frankly, it’s no surprise.
With today’s audiences laser-focused on societal issues and business efforts that go beyond profit, the demand for purpose-driven companies is only increasing. Understanding your WHY is absolutely key to making this purpose authentic.
Letting your WHY lead the way
What this all boils down to is the fact that purpose-driven businesses are those with the brightest future. In order to become a purpose-driven business, you first need to understand your own motivation. Not just what you do, but why you do it.
And the simplest way to do that is looking inside—both personally and within your team. What is motivating you every day? Assume paying all the bills was taken care of—what else is your business trying to achieve? What is the legacy you want to leave behind?
Find the answers to these sorts of questions and you’ll find your WHY. And once you really know what your business stands for—and who you are—the sky’s the limit from there.