Core Purpose | Why Does Your Company Exist?

Core Purpose – Why Does Your Company Exist?

Looking back over my career, I can’t remember a single bonus check or what it was for. The money went into my bank account, and I used it to buy things. Salary and bonuses quickly become “part of the package” for employees. They may feel good for a couple of weeks, but it has limited effects on future performance.

Most people are like me when it comes to cash compensation. We want to make a fair income for what we do. That means fair when compared with your colleagues and with what someone in your industry should reasonably expect to receive for their responsibilities and performance. If we don’t think that we’re paid fairly, we get de-motivated.

Money is what psychologist Frederick Herzberg called a hygiene factor. A hygiene factor, like pay, can satisfy you, but it won’t motivate you. You have to have enough to be satisfied and, if you don’t, then you’re dissatisfied or de-motivated.

Every employee has a mix of motivators, and that mix almost always includes the same three things.

1. Challenging work

People are more likely to become motivated if they do challenging work. Assigning Metrics/KPIs and responsibility for Projects make the work challenging for most people. The other way that work is challenging is if people are always learning more.

2. Making progress

People want to grow, develop, and make progress. If you arrange their work so that they can do that, even a little bit every day, they are more likely to become motivated. Research documented in the book The Progress Principle found that that the best way to motivate people, day in and day out, is by facilitating progress – even small wins.

3. Autonomy

People want as much control as possible over their work life. They want to make choices about how to do their work. When you allow them to make those choices, they’re more likely to become motivated.

What about employee engagement?

All of us want to do work that engages us. Money is important, but it’s not enough. People want to work for something beyond the numbers. A Core Purpose adds energy and emotion. The classic example is the story about the two bricklayers toiling away on a job. A passer-by asked each one what he was doing.

The first bricklayer replied, “I’m laying bricks, of course.” And he went back to his work.

But the second bricklayer’s eyes lit up as he told the questioner, “I’m helping to build a great cathedral!”

When people have a purpose that goes beyond the numbers, they pour more energy into their work. They give it more thought. They’re more likely to be what the management gurus call “fully engaged.”

But when numbers are all there is, it’s more likely that people will have a short-term focus. Dr. Richard Hagberg, an organizational psychologist who has studied corporate purpose, says that companies who are fixated on hitting quarterly and even daily targets often don’t produce sustainable profit growth.

It’s different when companies have a Core Purpose. Dr. Hagberg found that a combination of challenging goals and a clearly articulated purpose characterized the companies that delivered the highest returns.

When all you’ve got is numbers, you get bricklayers who do their job for a paycheck and nothing more. But when you’ve got a well-understood Core Purpose, you get engaged people pouring their energy and ideas into building your version of a great cathedral.

That’s a good thing. Research by Gallup indicates that companies in the top quartile for engagement are more productive and more profitable than companies with a less engaged workforce. The employee research firm ISR studied more than 500,000 workers’ engagement and concluded that a highly engaged workforce drove both productivity and profits. Hewitt Associates tracked 300 companies over five years and found that increases in employee engagement preceded improvements in financial performance.

Engaging People at Work.

Engagement is one of today’s hot business topics. On Amazon, there are close to 400 leadership and management books about engagement. There are thousands of magazine articles and blog posts that tell you how to create it. Every major consulting firm seems to have its own proprietary method for creating engagement. They make it too complex and mysterious.

The broadest and most powerful engagement happens when a company has a Core Purpose that gives people an opportunity to work for things beyond the numbers. If you’re clear about your Core Purpose, people who share the same purpose will clamor to work for you. When everyone is working “on purpose,” people will give that extra measure of discretionary effort that we call engagement. 

Purpose is the engine of deep, powerful engagement. To make the magic happen, though, you have to begin by defining your Core Purpose and then sharing it with the people who work at your company.

Start with Why?

There are people who claim that the sole purpose of a business is making money or “maximizing shareholder value.” That may be true for economists, but real people don’t get excited about those things. If you want people to get excited about what they do and give effort and attention beyond the minimums, you need to give them something to work for beyond the numbers.

That something is your Core Purpose. So get your team together and work out the answers to four important questions:

1. Why does your company exist, beyond making a profit?

Profit for a business is a lot like oxygen is for a person – you don’t live to breathe, but you have to breathe to live. What are you living for?

2. What are you really passionate about?

What gets you excited about what your company does?

3. What difference do you make in the lives of your customers?

How are their lives better because of what you do?

4. What do you do for your customers that transcends the products or services you currently offer?

What is the essence of what you do for your customers that will still be valid in ten years’ time?

Work with these questions until you have a statement of the Core Purpose for your company. If you’re like many companies, it will be a fairly long statement. For your Core Purpose statement to be as powerful and energizing as possible, you need to make it short and sweet.

Apply my Twitter Rule: Rephrase your Core Purpose statement in 140 characters or less. Many companies start with the word “to” or the phrase “Our purpose is to….”

Complete that statement so it will fit as a Tweet.

Take a look at what you’ve decided and what you’ve written down. Obviously, you think that the Core Purpose you’ve identified is important, meaningful, and motivating. But what about others in the company, especially those in frontline positions?

This is not easy. Many companies struggle with it. But if you can nail it, you’ll find that it makes everything else better. If it were easy, everyone would be doing it…”

Excerpted from the book: Business Execution for RESULTS, by Stephen Lynch

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Until next time…
Stephen

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