Lead With Purpose

I’ve been an entrepreneur for 11 years, but I was an intrapreneur for over two decades before founding Prosper for Purpose. During that time, I reported to a few great leaders, some not-so-great leaders and a couple of terrible leaders. I learned from them all.

The essence of what I learned is this: The main traits of great leaders include having a purpose beyond profit and ensuring their teams are trained, empowered and rewarded within the structure of that purpose.

The definition of being purpose-driven is “a purpose beyond profit.” That term often gets misused by leaders whose companies don’t have a stated purpose beyond profit. But these leaders would be wise to catch up because the market has changed over the past few years.

Let me explain.

The pandemic left us in a period of “great contemplation,” with 86% of employees believing that meaningful work is more important than ever and 84% saying they would only work for purpose-driven companies. Corporate leaders are getting the message. 92% of C-suite leaders believe their organizations would be more successful if they had a greater focus on purpose.

Now for the irony.

Companies that prioritize purpose do better than those that don’t. Consumers remain more loyal to purpose-driven brands.

A 2023 study by Deloitte found that purpose-driven brands capture more market share and grow on average three times faster than their competitors. They also report 30% higher levels of innovation and 49% higher levels of workforce retention.

Purpose-driven companies provided shareholders with a 13.6% CAGR (compound annual growth rate) return on average over twenty years. That’s three times their closest industry competitors and five times the S&P 500.

Now that I’ve made a convincing case for leaders to LEAD with purpose, let me explain how you can do that.

First, you need a business purpose, or what I call brand purpose. If you don’t have one, ask yourself, “Why did I start my business?”

Purpose typically comes from vision. Entrepreneurs are known for finding better ways to produce products or deliver services. They’re problem solvers. So ask yourself these questions:

1) “What is the change I seek?”

2) “What impact do I want to make?”

3) “What legacy do I wish to leave behind?”

When I started my agency, my vision was to contribute to building a more just and sustainable world by equipping good companies with great marketing so they can achieve more impact. Prosper for Purpose creates brand strategy and implements communications for purpose-driven brands. We are the bridge that enables companies to make a greater impact by helping them tell their stories so more people learn about them, buy their products, support their services, or realize the impact they, too, can have.

You don’t need a world-changing purpose, just a purpose about the impact you want to make that goes beyond profit. Then you need to state that purpose and implement it. Ideally, it becomes a thread you pull through every aspect of your business. Your company’s purpose statement should be clear, relevant and compelling. It should become more understandable through your company’s values and policies.

Next, you need to create a culture around your purpose. I’ll use myself as an example to illustrate what this looks like.

As a business owner, I believe it’s my responsibility to ensure the people I hire share my agency’s values and understand how their roles help us achieve our purpose. It’s also my job to guide them AND to provide the autonomy they need to fulfill their purpose in their work.

I work to ensure members of my team have access to everything they need to do their jobs well and to feel aligned. This includes flexible schedules and working from home. These things, as well as rewarding people for exceptional work or achievements, build a strong culture where people feel appreciated and acknowledged.

Your approach to creating a culture of purpose may look completely different, and that’s okay as long as it truly aligns with your purpose.

You should also want your employees to experience purpose congruence. According to the Harvard Business Review, purpose congruence occurs when employees believe their beliefs and values align with those of their employer without feeling forced. That last bit is tricky, but vital because forcing purpose on employees can lead to homogeneity, “which can increase group think and limit innovation and diversity.” Instead, purpose-driven companies should invest in helping employees “better personalize purpose into their daily activities.”

Before starting my agency, my career was a mixture of corporate and nonprofit work. Nonprofit employees never have to question their organization’s purpose unless a leader acts out of integrity. In fact, at my favorite organization, we used a servant leadership model.

Well-documented research shows that organizations and individuals perform better when leaders focus on the team rather than themselves. Servant leadership increases employee trust, loyalty and satisfaction with the leader.

On the other hand, nonprofits are often viewed as resistant to change. As a result, it takes them a long time to adjust to changing market conditions or giving trends. The reason is often that there’s a focus on building consensus. In theory, this is a wonderful concept, but in practice, it often falls apart. That’s because leaders, even servant leaders, still have to lead.

The main difference between servant leadership and purpose-driven leadership is that the servant leader focuses on serving while the purpose-driven leader focuses on impact. This frees the purpose-driven leader to make decisions more quickly around changes that will move the organization forward and increase the speed of impact. When the leader knows how to lead with purpose and pulls that purpose through management and operations, teams are more likely to trust in the decisions being made and make necessary adjustments to ensure the decision becomes the right one. That’s because having a purpose at work informs their decisions and actions. It’s what motivates them to do their best work.

Leading people towards a common goal can be one of the most difficult but rewarding roles you can have. But it’s good for people and good for profit. That makes it doubly worth the investment.

-Lorraine Schuchart