Why purpose is important to business owners
“Why am I doing this?”
It’s a question many small business owners may find themselves asking as they work long hours. They see cash going out as quickly as it comes in and find that they have to deal with issues from customers, staff and suppliers. But taking the time to find the true answer to that question could pay dividends. A Harvard Business Review global survey has shown that companies who clearly articulate their business purpose have higher growth rates. As well as being more successful with transformation and innovation initiatives than companies who don’t focus on their purpose. The definition of business purpose is “an aspirational reason for being, which inspires and provides a call to action for employees and customers alike”.
For many small business owners, it may be reconnecting with what inspired them to go into business in the first place.
Purpose drives employee satisfaction
In the Harvard Business Review survey, 89% said that purpose drives employee satisfaction, 84% agreed that it affects a company’s ability to transform and 80% said that it helps increase customer loyalty. However, only 46% felt their own company had a strong sense of purpose.
For these companies, the biggest barrier to defining purpose was short-term pressure which hindered their ability to focus on long-term value. In other words, they were too busy to take time to answer the fundamental question “Why am I doing this?”. But purpose is not just a nice-to-have, it makes a difference to the bottom line.
38% more likely to experience strong growth
Of the companies who “clearly articulated and understood” their purpose, 58% had achieved 10%+ growth in the past 3 years. Compared to only 42% of those whose purpose was not understood or communicated. So understanding your purpose makes you 38% more likely to experience strong growth.
Taking the time to define your purpose, and ensuring that everyone who works with you understands that purpose is important. It can improve employee satisfaction, boost transformation and innovation, enhance customer loyalty and ultimately increase profit. As a small business owner, can you afford not to take the time out to decide “Why am I doing this?”.
As we say at Business Doctors: Are you working on your business or in your business?
If you would and help or advice for your business, please get in touch.
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