July 6, 2016
The Purpose Effect

A Few Easy Steps For Entrepreneurs To Take To Enact A Higher Purpose

Female_entrepreneur_6_getty_0 Since the time of the ancient Greeks, the concept of a “higher purpose” has been discussed. As the German professor Ernst Curtius once wrote, “The whole tectonic art of the Greeks is consecrated by a higher purpose.”
When you think about it, we might coin those ancient Greeks as the first real examples of startups. During what some call the “classical era,” the Greeks were an entrepreneurial cohort, spanning the early 5th century BC to the death of Alexander the Great in 323 BC. They invented things we take for granted today, including the Olympic Games, mythology, philosophy, and cartography. They even invented the odometer. As they invented—as they ran their Greek startups—they did so thinking about others. They acted to better society, not solely the owners of the ideas.
But their inventions, their entrepreneurial spirit, their philosophy of sharing … it all came down to a universal truth:

An organization’s purpose is not to serve those who rule; it exists to serve all stakeholders.

Take for instance Mana Ionescu. She took a deep breath one day, and asked herself, “What am I really doing?” Life, her career and the company she was working for had become too transactional. The creativity was minimal. Ionescu knew who she was, but the organization that employed her was lacking a higher purpose. “There must be more to my working life than just sitting here making money, fixating on profit and not actually making an impact,” she mused to herself.
Ionescu set out to fix things. She quit her role and started Lightspan Digital, a digital marketing company based in Chicago. In her eyes, too many businesses only see themselves through the lens of profit, whereas in reality she believes there should always be a higher purpose to being in business. Ionescu had observed that too many firms are solely “win” organizations, preoccupied with profits and revenues. She believes organizations should strive to become “win-win-win.”
The three “wins” include:

  • The necessity to make a profit and deliver value to customers.
  • The individuals that make the business successful (team members, suppliers, buyers).
  • Society, including the environment and members of the external community.

When she created Lightspan Digital, the value proposition of the firm was not solely on profit. It was balanced between her “win-win-win” stakeholders theory. The purpose statement for Lightspan Digital developed in partnership with her team portrays these beliefs:

To deliver clear, simple and direct digital marketing solutions. We believe in social media marketing done with purpose, not just for the heck of it.

LSTN, a company based in Los Angeles that produces and sells high-quality wooden headphones, is another example to consider. During its startup days, the co-founders’ mission was to build a company that would “create global change by providing high quality products that help fund hearing restoration and spread awareness for the global problem of hearing loss and hearing impairment.” In fact, its co-founders wanted to “create something that could change the world.”
This is a powerful way to incorporate purpose into your mission, your culture, and how you operate. So, for every pair of headphones LSTN sells, the company commits to helping restore hearing loss for someone in need. Indeed, this is a higher purpose. It was developed with stakeholders in mind, not solely the owners or entrepreneurs.
When purpose is defined and enacted, the benefits begin to pile up as well. Prospective employees see you as an attractive place to work, while internal employee engagement can reach lofty heights. When employee engagement goes up, customer satisfaction and loyalty correspondingly increase. In fact, Queen’s University found customer satisfaction levels are 30 percent greater and team productivity rises 15 percent when employee engagement is high.
So, when your startup acts with a higher purpose, it’s easier to gain traction, and it definitely pays off: Your employees are more engaged and productive, and your customers remain loyal to you
Here are some steps you can take to enact higher purpose in your firm today:

  1. Work together to declare your organizational purpose. By establishing a purpose-first culture that serves the interests of all stakeholders, your startup likely will have far greater buy-in from your employees to achieve its mission and objectives. When your employees are bought in and able to demonstrate purpose in their role, research shows that organizational benefits begin to quickly accrue.
  2. Serve all stakeholders. It is one thing to declare your organization’s higher purpose, and it is another to carry it out each and every day. Lightspan Digital and LSTN decided to act with a higher purpose in all their actions. It cannot be a part-time mission to serve all stakeholders. As you build out the organization’s new purpose, you must then ensure you carry it out in all of your actions, serving all stakeholders.
  3. Develop a purpose scorecard. By restating how your startup is going to operate—with a higher purpose—you can set targets and publish the results by using a scorecard (see our scorecard below). By committing to serve all stakeholders, the scorecard is a way to track how you are operating with purpose against five key areas: customers, employees, community, society and profitability. Set targets for each and weight each one accordingly. Publicly publish the scorecard on your website. Your customers will appreciate and become loyal to your commitment to serve all stakeholders.

Maybe we should all become a little more Greek, too.

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