- When we look at the foundational look at the large-scale companies generating high profits, it is important to note their driving strategies.
On taking a nearer look, one can note that the three main formative strategies known to drive these companies are: –
- Developing new markets
- Catering to larger stakeholder needs
- Evolving with the game rules.
But with all these, most companies forget to implement one important factor: putting your purpose into your core strategy. It is surprising to see how so many companies had faced a boost in growth moreover, completely forgot about the main driving factor, purpose.
- Now we know that purpose is the key factor in the overall growth of any company, the question that arises is that why it is so important. Why does a company need a principle if it is performing well? Companies have long been told to build and develop a purpose for what they do. But in most cases, it is talked about as an additional aspect or an add-on, a way to create shared value, improve employee morale and commitment, help the environment, and give back to the community. When we take a deeper look at the hair0growth companies, we realize that many of them had moved the purpose from the boundaries of their strategy to its core; where, with the assistance of financial investment and dedicated leadership, they had used it to bring sustained profitable growth and also to stay relevant in a fast-changing world, and deepen ties with their stakeholders.
- Now to give an example of how a company can improve considerably by redefining its playing field, what do you think is the main difference between low-growth and high-growth companies? While low- growth companies spend most of their fighting for the market share on a particular playing field, which naturally limits their growth potential. And because most versatile battles occur in the industries that are growth potential. And due to the fact that most aggressive battles occur in industries that are slowing down their pace, gains in the market share are brought up at a high cost, often eroding profits and competitive advantages as offerings end up becoming just commodities for their customers. Coming on to high-growth companies, they do not feel restricted to their current playing field. High-growth companies like these focus on complete ecosystems, where interconnected interests and relationships among multiple stakeholders lead to more opportunities. But these firms do not approach ecosystems unorganized or dishonestly; relatively, they let purpose guide them.
- Many leaders and companies that have typically defined corporate purpose have been able to do so by following one of these two approaches: prospective or retrospective.
- The retrospective approach develops on a firm or company’s existing or current reason for being. This approach allows you to look back, codify organizational and cultural DNA, and learn from the firm’s past. The importance of the discovery process is internal. Where have we started from? How have we jointly gotten here? What makes us different from other organizations? What are the potential opportunities we are looking forward to? These are the kinds of questions leaders have to come up with and introspect about.
- Leaders must observe and consider how to make purpose central to their strategy. The two best ways to do this are to change the leadership agenda and to spread the purpose throughout the company.
- Other than this, purpose can also assist with the soft side of the management and the people related to the aspects of working on a business, which so often proves to be the cause of leaders’ fall.
If you are putting purpose at the core of the strategy of your organization, you will realize three main benefits:-
- Highly motivated stakeholders
- More-unified organizations
- Positive impact on society
- The approach towards a purpose that we are encouraging cannot be a one-time effort or appraisal. Leaders always need to assess how purpose can help them develop strategy, and they need to be flexible to adjust or redefine this relationship as the situations evolve. It might demand a varied kind of sustained focus, but the benefits it can bring about are vast.