The concept of organizational purpose demands that we redefine how to create and measure business value
Although business value historically has been defined by a company’s profitability, value is beginning to be understood in new ways. Put simply, in order for a project to be worth pursuing, it needs to provide increased value to your customers. But increasingly across organizations, value needn’t be considered purely financial. Just as we have considered qualitative data an important factor within a business to guide adaptive leaders as they manage teams and navigate unexpected shifts, qualitative data – and in particular, the idea of purpose – is also contributing to the modern needs and requirements of business.
“Profit isn’t a purpose. It’s a result. To have purpose means the things we do are of real value to others.” – Simon Sinek
Qualitative data cannot always be measured by numbers, so it can be tricky to interpret. It is often demonstrated through relationships and satisfaction, and cultivating areas of the business that can provide value—financially and otherwise.
But why is the definition of value expanding beyond financial models? Companies are discovering that making “purpose” a key aspect of their strategy can lead directly to financial gains. By infusing their workplaces with a purpose-minded culture, organizations can reduce turnover and increase employee engagement.
Without over-simplifying it, your company’s purpose should explain why you do what you do, with an emphasis on the human side of your operations. Michael Chavez, CEO of Duke Corporate Education, explains that purpose “enables us to move beyond the dehumanizing effects that over-emphasize efficiency and shareholder value.” However, Chavez cautions that while purpose should be aspirational, it still must align to an organization’s authentic identity and business reality. Purpose without this authenticity runs the risk of disconnect that your customers will see straight through.
3 Ways That Purpose Supports Value
- Employees are motivated by having ownership in their work. Narrowing in on a purpose gives your team the ability to identify and work toward a greater mission in what they are doing.
- Emphasizing the human aspect of your business can facilitate reallocating your resources. Implementing technology to handle standard tasks can free up your employees to do more creative and high level thinking which often leads to innovation, which can help your company provide a better product for your customers.
- Purpose can help you stand out to attract and satisfy customers. In an infographic highlighted in Forbes, “91% of global consumers would switch brands if a different brand of similar price and quality supported a good cause.”
Consumers today not only care about what you do, but why you are doing it. Actually addressing those concerns for your customers can lead to longer lasting relationships, which can only enhance your long-term business value.
As value continues to be redefined, understanding how to see value beyond only profit can improve the business environment for your employees and customers alike, which adds value in itself.