BI #16 - Business with Purpose Part 1: Play Now | Play in Popup | Download

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Running Time: 20 min 50 sec

Extended Show Notes:

In part one of a two part series on business with purpose John Eckmire of Canadian Management Centre and Nikos Mourkogiannis author of “Purpose: The Starting Point of Great Companies” discuss how good companies become great.  Real success is more than the achievement of a financial goal. Truly meaningful success requires using the concept of purpose and applying it to the day–to-day activities of the corporation.  Nikos stresses that without purpose a company will struggle to find meaning in what they do. The concept of applying purpose to action is designed to help others attain well-being.

According to Nikos a “Great Company not only sustains itself but provides continuing evidence of the value of its existence. It not only makes a product or provides a service that people want but it does so in a way that makes people glad that this particular company has come into existence, if only because of the great way that it plays its role”

• In short great companies raise the standards of life for others. it is difficult, but achievable
• The number of companies and business leaders, who would embrace the thought of raising the standard of living for others, depends largely on who they are as individuals and at which stage they fall in their careers.
• Typically once people have achieved success in whichever way they define success they then will seek to do something more meaningful, something they can be proud of.
• The concepts of purpose and meaningful success are not for everybody. People must be good before they can be great.
• Meaningful success presupposes a level of success already but only the best and the brightest aspire to achieve meaning.
• Purpose according to Nikos is preparation for doing what is right and what is worthwhile, it creates a feeling of obligation for going beyond yourself.
• Having a sense of direction and obligation towards your goal provides you with direction and purpose.  Purpose acts like a compass, guiding you in the direction you wish to go.
• Purpose then ties directly in with company mission and strategy.
• Strategy alone is devoid of human considerations, by linking strategy to purpose people are forced to consider the concept of greater good.

Simple questions such as “What will sustain Morale?” “What will make people proud to go to work?” can be worked through using the concept of purpose to drive individual and collective actions.  Nikos points out that simply going to work for a pay cheque is not a productive activity.  In order to be successful each brand must be focused on a  purpose.

• Purpose must be particularly focused in the HR and Marketing departments of every company.
• Purpose will provide the best company alignment.
• Customers must know what your companies focus is, once your organization has its purpose clear.
• Purpose also provides clarity within an organization as well as outside an organization. The more clear and crisp your company purpose is the better you will do.
• Purpose then becomes a competitive advantage for your business: Nikos describes 2 sources of competitive advantage
  • Innovation
  • Relationships
• Purpose is integral for cementing relationships. A feeling of joint purpose between working partners helps to build strong lasting relationships.
• Purpose and innovation according to Nikos are intertwined. Without a common shared purpose, innovation is extremely difficult and unlikely. This is because innovation is dangerous.
• If you have a purpose low level considerations such as corporate politics, job security, predictability etc. become secondary in an innovative environment.
• A sense of purpose is directly related to company morale. People who are not united by a common goal or purpose may feel a lack of direction.  Finding a way to raise morale is the holy grail of management today.

There are 4 ways to raise morale:1.      Teaching people new skills: Most important to the younger generation2.      Rewarding people for a job well done: This can be both monetary and non-monetary rewards3.      Having a successful community: 4.      Serving a higher purpose: Serving a higher purpose is the most sustainable of all 4 and the least expensive. Many executive and managers do not understand this concept and as a result leave a lot of money on the table.

Retention of employees is easy to do with a higher purpose in mind.

·         Nikos notes that we live in a period of “flat organizations”.  If you have a flat organization you cannot hire people or fire people, promote or demote people. IF you try to hire people using only money to draw them in the endeavour becomes quite costly.

Research shows that people will go to work for an organization with a higher purpose for less. People will also buy products from companies that have a purpose even if their product costs more than the competition.

·         Nikos uses the example of purchasing a hybrid car.  Nikos believes that there is no economically justified reason for purchasing a hybrid. Yet the demand for hybrids is exceeding supply.

WHY?

·         People want to buy a product with a purpose. For a product with a purpose people will go the extra mile, they will pay more because they see value in what they are purchasing.

·         John happens to own a hybrid car and says that Nikos is right.  He personally feels better about driving a hybrid because it helps the environment, giving it a higher purpose.

In next week’s episode of Business Intelligence John and Nikos will be meeting again in the second instalment of Business with Purpose to discuss The 4 categories of moral purpose described by Nikos in his book.

1.     Discovery

2.     Excellence

3.     Altruism

4.     Heroism