Core Purpose: The Compass for Sustainable Business Growth

Imagine being lost in the wilderness—it’s pretty scary, right? Now picture that same wilderness as your path to business growth. Without a compass, it’s easy to wander, making costly mistakes and wasting precious time. But what if I told you there’s a compass for your business? One that can guide your growth and keep you on track? That compass is your core purpose. It’s the heart of your business, the reason behind what you do.

It’s not just about profit; that’s a result. It’s about the impact you want to make. It’s the driving force that fuels your passion and lights your growth path. A clear, well-defined core purpose can be the difference between wandering in the wilderness and charting a course for success. Let’s dive deeper into how your core purpose can guide your business towards sustainable growth.

What is Core Purpose in Business?

The core purpose of business, often referred to as your ‘Why’, is the fundamental reason your company exists beyond just the products or services you provide. According to Jim Collins and Jerry Porras, authors of Build to Last, a value can be deemed “core” if it is so profoundly ingrained and unchanging that it undergoes few, if any, alterations.

Beyond just making money, your higher purpose inspires change and remains consistent. It works around obstacles and serves as a source of inspiration for your team. Most importantly, it highlights the impact you are making on the world.

Your core purpose remains constant and unwavering amidst these changing paths and goals. It serves as a guiding light that keeps everyone in the company aligned and focused. It helps maintain a steady course even when faced with shifts or pivots in the business model. With a well-defined core purpose, decision-making becomes clearer, directing you on what to do and what not to do.

Here are a few examples:

  • LinkedIn: Create economic opportunity for every member of the global workforce.
  • IKEA: To create a better everyday life for the many people.
  • Nordstrom: To give customers the most compelling shopping experience possible.
  • Starbucks: Escape.
  • TED: Spread ideas.

How to Identify and Define Your Core Purpose

Defining your core purpose might seem like an uphill task. After all, how do you articulate something as intangible as the ‘why’ of your business? However, by adopting a precise approach and asking the right questions, it’s possible to articulate it clearly and accurately.

Ask the Right Questions

Let’s start by diving deep into your company to truly understand its purpose. Beyond financial goals, what compelled you to create your company? Was it driven by passion, expertise, the desire to be better than the competitors, groundbreaking technology, or simply the ambition to forge a new path?

Now, let’s talk about the journey to founding your company. What has changed since the beginning, and what has remained constant? Reflect on where the business idea originated, the reasons that led you to embark on this journey, and what success means to your company.

It’s important to gain insights into these aspects to fully grasp the essence of your company and its evolution.

Extract the Key Information

After you’ve finished asking questions, it’s time to pinpoint the key elements that define your purpose. Consider your brand’s origin story, what factors contribute to your success, and who your target audience is.

Core purposes frequently fall into one of four types:

  • The Good: “Service to others”
  • The True: “Search for truth and knowledge”
  • The Beautiful: “Pursuit of beauty, excellence, and quest for perfection”
  • The Heroic: “Desire to change the world”

Take this information and condense it into a core purpose statement that truly reflects your story. This statement will serve as a succinct representation of your business, ensuring that your story remains at the heart of your strategic initiatives and daily operations. Once you’ve finalized it, let this statement guide your overall brand strategy and steer your company in the right direction.

Avoid common pitfalls

Businesses often have purpose statements that may not truly reflect who they are. It ends up being “fluff” and fails to inspire or engage the team in a meaningful way. If there’s a disconnect between your existing statement and the truths uncovered in your discovery sessions, it’s time to revise it.

Your core purpose is not just a marketing tool; it’s the authentic essence of your brand.

Don’t fall into the trap of creating a statement based on who you want to be or what you think your customers want. By focusing on your core truths and letting them shine, your statement will genuinely represent who you are.

creating your business story

The Importance of Core Purpose and How it Makes a Difference in Business

Having a clear purpose in business is extremely important. It shapes how your brand is perceived by both customers and employees, playing a vital role in creating your business story.

According to the 2020 Edelman Trust Barometer Special, people prefer to do business with brands they trust. Establishing a strong core purpose can be a powerful tool in building that trust. When your business operates with purpose, it effectively communicates its values, mission, and authenticity to customers, fostering a relationship based on trust. And we all know that trust leads to brand loyalty and long-term success, which are crucial for growth.

But it’s not just customers who are drawn to purpose-driven companies; employees are too. Nowadays, employees seek businesses that align with their values. According to a survey by The New York Times, employees who find meaning in their work are three times more likely to stay with their employers. When you integrate your core purpose into every aspect of your business, it enhances employee satisfaction, fosters commitment, and ultimately leads to a more productive workforce.

Lastly, a well-defined purpose helps strengthen your brand story, promoting a sense of legacy and longevity. A report by Headstream revealed that 55% of people consider buying from a brand if they love its brand story. By having a compelling core purpose at the heart of your narrative, your brand story becomes more impactful, making it easier to attract and retain the right customers.

6 Ways to Successfully Embed Core Purpose into Your Business Organization

Knowing your core purpose is only half the battle; the real challenge lies in successfully embedding it into your company. When done correctly, integrating your core ideology can become the lifeline that courses through the veins of your company, leading every decision, strategy, and interaction.

1. Make Your Purpose Statement Clear, Inspiring and Authentic

Your purpose statement should bring clarity, inspiring your workforce while resonating with authenticity – not merely a plaque on a wall that “sounds nice.” Think about whether your purpose is perceived with enthusiasm, rather than cynicism, because if it doesn’t feel true to your team, it will never be core to your business.

Avoid jargon and complex language. Use straightforward, everyday language that everyone, from your employees to your customers, can understand. In other words, write your purpose how you actually speak so it represents who you are as an organization. Aim for inspiration; your statement should evoke a sense of purpose and pride and motivate your people. It should be the glue that holds your company together as it grows, expands, and diversifies.

2. Embed Your Purpose in EVERYTHING You Do

This can’t be stressed enough: your purpose should be the leading principle behind every decision you make, every strategy you devise, and every interaction you have. It should not merely be a tagline on your website or a sentence in your newsletter. From hiring and training employees to product development, customer service, and corporate social responsibility, your purpose should permeate every aspect of your business. When your actions consistently align with your purpose, they reinforce your authenticity and enhance your reputation. It’s a tangible way of showing your employees, customers, and stakeholders that you don’t just talk the talk but walk the walk.

3. Don’t Over-Measure the Core Purpose

While it’s essential to monitor progress and alignment with your core purpose, be cautious about condensing the purpose down to a set of metrics. Your core purpose is a declaration of your business’s heart and soul, not a numerical target to be hit each quarter. Attempting to overmeasure it can lead to a fixation on short-term goals and undermine the very essence of what your purpose stands for.

Rather than getting caught up in numbers, focus on qualitative indicators of purpose alignment—like the quality of service provided, customer reviews and feedback, or how well your team’s actions reflect your purpose. You can also measure purpose alignment indirectly by observing the level of employee satisfaction, customer loyalty, or your company’s reputation in the industry. These are all signs that your core purpose is alive in your business.

4. Make Your Values Memorable

Every successful anchor has a mnemonic device behind it. Similarly, your values, which support and fuel your core purpose, need to be easily remembered. Start by crafting concise, impactful statements that capture the values that are central to how you make decisions and treat one another.

Use plain, easy-to-understand language that doesn’t require a dictionary to interpret. Consider using alliteration, rhymes, acronyms, or simple phrases that stick in people’s minds, but don’t be so committed to trying to fit your values into a certain format that you water down their meaning. The point is that the easier it is to remember, the more likely your team will live it out in their daily work, your customers will recognize it in your products and services, and your stakeholders will see it embodied in your culture.

5. Make Your Values Part of Your Everyday Language

In your business, every conversation should reflect your values. They shouldn’t just be words on a wall but should become the language of your company. This means incorporating them into team meetings, customer interactions, performance reviews, and internal communications. When your values are embedded in your everyday language, it reinforces the core purpose of your business and serves as a constant reminder of what you stand for.

Remember, it’s not enough for the leadership to understand and live your values; everyone at every level of your company should understand and live them too. By consistently incorporating your values into your communication, you not only infuse them into the heart of your business but also cultivate a culture that embodies your core purpose.

6. Make it Fun

Who said that purpose needs to sound like it came from a textbook? Believe it or not, infusing fun into the process of instilling your core purpose can have a profound effect, enhancing engagement and making the message more memorable. Think outside the box; organize team-building activities, games, and competitions centered around your purpose and values.

Celebrate employees who exhibit behaviors that align with your purpose. Make your quarterly or annual meetings exciting with awards for those who’ve demonstrated your values exceptionally. Create a positive, energized atmosphere where your core purpose isn’t just something to adhere to, but something to celebrate and take pride in.

business trends

Difference Between Core Purpose and Other Concepts

Before moving further, it’s essential to differentiate between the concept of core purpose and other similar terms you might come across in the business world.

Core Purpose vs. Vision

A company’s core purpose is your business’s reason for being, the why behind every action and decision. It’s your north star, guiding your navigation through the ever-changing business landscape. It remains constant, is not influenced by business trends or market fluctuations, and forms the very foundation of your company.

On the other hand, a vision is your company’s ultimate goal, the destination you’re striving towards. Your aspirations, ambitions, and the future state you picture for the business all have an impact on it. A vision is fluid and dynamic, evolving as your business grows and matures. A vision statement captures your company’s purpose but also encompasses your future objectives and the impact you aim to make.

A simple way to remember this distinction is that the core purpose serves as your compass, providing direction and keeping you grounded, while your vision is the horizon you keep your eyes on, leading your journey toward growth. Both can be valuable, serving complementary yet distinct roles.

Core Purpose vs. Mission

A company’s mission statement defines its purpose while distinguishing it from other businesses. A well-crafted mission statement paints a picture of what your business does to achieve its vision. It outlines the organization’s raison d’être, target audience, and key differentiators.

A core purpose is deeper than that; it goes beyond what you do to why you do it. It’s the heart and soul of your business, driving every decision, product, or service offering, and interaction with shareholders. A mission statement is a subset of your core purpose; it supports and furthers its realization.

Think of it this way: the core purpose is the engine that powers your business forward, while your mission statement outlines the specific route you take to reach your vision.

Core Purpose vs. Core Values

Core values are the key principles that inform the behaviors and actions of your company. They encapsulate the ethos, culture, and philosophy that your company embodies and advocates. They are the unwavering standards that your business maintains, irrespective of market changes or competitive pressures. Core values are your business’s DNA, defining how your team interacts, how your business operates, and how your business is perceived by the outside world.

On the other hand, your core purpose is the fundamental reason why your company exists, beyond just making profits. It is the driving force that inspires your team, connects with your existing and new customers, and differentiates you in the marketplace. It captures your company’s unique contribution to the world and its reason for being, which remains consistent over time.

Future Trends and Evolving of Core Purpose

As the world of business continues to advance, the significance of core purpose is becoming more pronounced. Here are some key trends to anticipate:

  • Increased Transparency. In the digital age, businesses are expected to be more transparent than ever. This includes their core purpose. Companies must articulate their purpose and how it influences their operations, decisions, and interactions. Simply put, the trend is moving towards not just having a core purpose but living it out loud.
  • Stakeholder Involvement. Businesses are progressively allowing their stakeholders to be indirectly involved in formulating their core purpose. This helps to ensure they are building a company that serves a real need in the marketplace, and that they are intentionally inclusive and relevant.
  • Sustainability and social responsibility There’s a growing trend of businesses aligning their core purpose with sustainability goals and social responsibility. This goes far beyond ‘doing good’; it’s about integrating the best practices into the very fabric of business operations, led by a purpose that seeks to make a positive impact.
  • Purpose-led Innovation. In the future, we can expect to see more innovation driven by core purposes. This means that businesses will leverage their core purpose to lead their innovation efforts, creating products, services, and solutions that genuinely align with their reason for being.

A word of caution about following trends, or looking to outside examples in developing your core purpose:

Keep in mind that a purpose is not meant to be a marketing tool. So while considering these trends and examples might be helpful, you should only develop your core purpose along these lines if these priorities truly are central to why your business exists.

FAQs

Can the Core Purpose of a company evolve over time?

While an organization’s core purpose is usually constant and enduring, the words aren’t set in stone. As a business grows, so too does its understanding of its purpose. The core purpose should be broad and flexible enough to encompass the company’s evolution yet specific enough to provide a clear direction. It’s not about what the company does, but why it does it. So, even as the specifics of what a company does may change, its underlying purpose—the fundamental reason it exists—remains consistent.

How can companies ensure that their employees align with the Core Purpose?

To ensure alignment across the company, the core purpose should be ingrained at all levels. This can be achieved through training, workshops, meetings, feedback, and internal communication. The core purpose must extend beyond a statement and be reflected in actions and decisions. Leaders should set an example, recognizing and rewarding employees who embody the core purpose and explaining strategic initiatives through the lens of how they further the company’s purpose. During hiring, consider candidates who genuinely want to work for your company because they align with your purpose – not just because they want a job. This fosters commitment and motivation, resulting in a more dedicated team.

What challenges might businesses face when defining or adhering to their Core Purpose?

Defining and adhering to a core purpose presents challenges for businesses. The most common challenge is that the purpose is simplified down to a nice set of words that the CEO mentions at the all hands meeting or holiday party. Translating a broad purpose into actionable plans requires intentionality, understanding, and clear articulation.

Ensuring the core purpose permeates all levels is crucial, not just top management. Aligning the core purpose with the business strategy is challenging, especially in fast-paced industries. It requires a delicate balance to innovate while staying true to its core purpose. A well-defined core purpose guides businesses toward sustainable growth and success.

Can startups and small businesses also benefit from defining their Core Purpose?

Absolutely! Startups and small businesses can greatly benefit from defining their core purpose early on. In fact, it’s the perfect time to do so because it captures and defines the reason the Founder chose to start the business in the first place. A well-articulated core purpose can guide a startup’s strategic decisions, help it establish its brand, and attract and retain employees who resonate with its purpose.

It provides a foundation that enables the startup to maintain its focus and direction amidst the uncertainties and rapid changes that characterize the startup environment. By embodying a compelling core purpose, startups and small businesses can differentiate themselves, build authentic connections with their stakeholders, and create a positive impact beyond just profit-making, creating a foundation for sustainable growth right from the get-go.