Turning Purpose to Profit
Part III in "Turning Purpose to Profit" series
There is much talk these days regarding the importance of individual and organizational purpose and how being purposeful can be both fulfilling and impactful. However, as important as it might be to be impactful, most businesses have an additional concern: being profitable! At Lapin International, we have developed a reliable methodology that not only discovers the purpose of a business, but also shows how activating both individual and organizational purpose leads to increased profits. For 25 years, Lapin International has focused on turning companies' purposes to profit, and our track record spans a wide range of industries and geographies globally.
In order to better understand our approach, it is important to first become clear on the distinction we make between the Mission of your business and it's Purpose. Often, Mission and Purpose are used in synonymous ways. But they are actually quite different. Mission defines what your business is (and, therefore, also what it is not). Purpose, on the other hand, articulates the reason why your business does what it does, additionally describing the difference it makes that no other business makes in quite the same way.
A Mission is synthetic in the sense that the leadership team crafts it. It can be anything the team chooses to apply its energy towards. Purpose, however, is not synthetic, but organic. It already resides in the DNA of the leadership team, in the combination of its passions and its inherent and unique capabilities. Purpose is always present, even if never before articulated or even used. Purpose is not crafted, it is discovered, or perhaps more correctly, it is recovered. It is recovered from the almost subconscious recesses of the organization's mind and soul. When you have discovered a company's soul, you are ready to recover its Purpose.
You and many of your competitors likely share the same or similar Missions. Because of this similarity, there is a competitive convergence: you and your competitors compete in the same market, for the same customers, doing the same thing. Thus, no matter how helpful your Mission statement may be, it is not an instrument of strategic distinction. Therefore, it cannot be turned to profit. Purpose, however, by definition, is unique to your company and is fundamentally different from that of your competitors. As such, Purpose is your most powerful, distinguishing tool and absolutely can be turned to significant profit.
Purpose by nature is intangible. However, understanding why your business does what it does can add tangible, immediate and sustainable value to a company's bottom line. Discovering a company's purpose and articulating it coherently is just the first step in using purpose strategically and for profit.
To appreciate the potential profitability of Purpose work, consider an international fashion retailer we worked with whose headline earnings grew by 900% in the decade after it began to rigorously apply the Purpose work we did with them. Their CEO stated in public that every time their growth slowed he could attribute it to taking their strategic eye off Purpose. During the 13 years we worked with an international investment bank (including the 2008 global financial crisis) it doubled its market share and grew its earnings by 596%. A hospitality group who used the Purpose work we did with them to build its business model and design its facilities and offerings, grew its revenue by 1,097% over the last 7 years of doing the work with us on turning purpose to profit. In an era of economic uncertainty and volatility, Purpose work offers a strategic distinction leading to sustainable profitability.
The Strategic Distinction Method
Turning purpose to profit takes methodical application and leadership discipline. The nature of this work requires that every engagement is uniquely crafted and executed to align with the company, the culture, the values of its leadership team, and the strategic objectives of its CEO. However, the basic methodology works irrespective of the client or its industry. This methodology typically comprises eight steps:
1. ResearchWe probe key influencers and stakeholders to identify the business's most immediate strategic opportunities and operational challenges while at the same time understanding and unraveling the complex dynamics of the human spirit as it plays out in the business.
2. DiscoveryIn intense workshop environments with leaders, we mine the unique constellation of capabilities of the business. We also determine the focused set of customers that can derive more value from these capabilities than any other sets of customers. This process invariably sparks new innovations that promise to take performance to new levels.
3. ArticulationWe work with leaders to articulate the purpose in a way that is not only inspiring but that also serves as a coherent tool by which to navigate the company through challenging environments. Their purpose also becomes the means by which the company makes consistent strategic choices that distinguish it from its peers and competitors and attract superior talent.
4. ImplicationsThe operational team scrutinizes every challenge that could emerge as the company executes on its purpose, and considers the implications. It examines what processes in the organization should be questioned, discarded or modified in light of the purpose and what new processes might need to be adopted. This is a rare, spring-cleaning opportunity for companies that have accumulated burdensome bureaucracies, processes or structures that no longer serve the purpose of its existence. This process yields cost savings and innovative ideas about new and quicker ways to accomplish results.
5. ActivationWe establish activation groups throughout the organization's operations. Leaders and managers are trained and supported to teach the purpose to their teams, both as a philosophy of doing business and as a strategic instrument to sustainably distinguish it. In this way, managers are encouraged to expand their roles from command-and-control to one of mentoring and influencing their teams for growth and results.
6. MeasurementTogether with leadership, we determine what metrics should change if the Purpose work is successfully implemented. Often these metrics are infused into management's KPIs.
7. MonitoringLeadership monitors the agreed metrics. We meet with leadership regularly to refresh the process, introduce the latest ideas and methods, remove roadblocks and measure success.
8. EvaluationAt predetermined times, we meet with leadership to evaluate the success of the work and consider to what degree their purpose has successfully been turned to additional profit. If necessary, the process is fine-tuned or redirected to enhance its effectiveness still further.
Leadership development is not an individual, transactional activity separate from a company's strategic distinction and the activation of its purpose. A key success factor to turning purpose to profit is the simultaneous development of a new caliber of leadership capacity in the company. This new leadership capacity understands the power of purpose and how to lead by it. Using a combination of didactic and experiential learning during workshop sessions, as well as one-on-one coaching, Lapin International'sLead by Greatness Leadership Development Initiatives help individual leaders to recover their own purpose and create alignment between their purpose and the purpose of the business. Developed in this way, leaders acquire the depth necessary to further distinguish a company from its peers.
Purpose work is not a one-day wonder. If it were, everyone would be doing it. What makes it such a compelling advantage is that although many people are talking about Purpose and maybe even crafting one, few have the experience and know-how to turn purpose to profit consistently year after year. Through a combination of the initial eight-step Strategic Distinction methodology and Lead by Greatness, companies embed their purpose into their corporate DNA in ways customers admire and competitors cannot imitate.