We are operating in a new business environment -- one that is purpose led. Millennial buying power is projected to increase to 50 percent by 2020, and they are increasingly making up more of our workforce. For this cohort, buying -- and working for -- brands that have a firm purpose is a primary driver for engaging with them. As a result, smart companies are laying the groundwork for long-term survival in this fast-changing time by making 'purpose' a driver of both innovation and decision-making.
EY [Ernst & Young], a leading global advisor for the most successful entrepreneurial companies, recently hosted a global webcast with experts and top female entrepreneurs who are leaders of purpose driven companies, scaling from $100 million to $1 billion. I was fortunate enough to be one of the panelists alongside Dr. Lisa Williams, CEO of World of EPI; Lisa Bair, Founder/CEO of Quantuvis; Dr. Susan Duffy, Executive Director of the Center for Women's Entrepreneurial Leadership at Babson College; and Kerrie MacPherson, Principal at EY. The webcast received more positive comments than any other webcast in EY's history.
There is so much to say about this subject, starting with why your business needs a purpose, how to determine your purpose, and what to do with it once you figure it out. I am a prime example of how operating a purpose driven business can help scale you from a person with an idea to an owner of a company worth millions and an industry thought leader.
Purpose led brands attract more customers and more loyalty.
Since both are focused on change and market value, disruptive innovation and purpose driven business go hand in hand. Behavioral Science supports this theory. According to an article in June's Economist,"...people do not just buy something because it provides the most efficient solution to a problem. They buy it because it provides aesthetic satisfaction..." Happiness results from doing something that makes us feel a sense of purpose. In his book, Start With The Why, Simon Sinek further finds that "People do business with those who believe what they believe. People don't buy what you do; they buy why you do it."
As I've said before, trust your intuition. If something feels right, it probably is right. The numbers back up the fact that caring about more than just your bottom line pays off.
Purpose becomes a decision lens.
Having a purpose simplifies things, providing clarity and consistency as the company grows. My company began as two people sitting around the kitchen table, hand sewing "mouse pouches" with ingredients we'd grown ourselves. Following our purpose of preserving the good and preventing the rest as we scaled the company, we now support American farmers by buying our ingredients from them. We've hired a handicapped workforce and built our equipment around their needs. We've also been able to stand up to pressure to manufacture overseas and avoid plastic packaging while growing a retail presence to be 50,000 stores strong.
My biggest job as a CEO has been to take our compelling why and leverage it into the how, so everyone has the same decision lens from which to work. With business growth, comes scale, scope and complexity, yet purpose simplifies every decision, every time.
Purpose provides a compass that allows companies to be more innovative.
Purpose led companies are concerned with doing things that make a real difference. Instead of striving to be the biggest, they strive to be the best, which in turn has a larger draw for consumers. Purpose becomes their compass on a journey to a destination worthy of all the blood, sweat and tears that go into starting and scaling a business. This kind of corporate DNA empowers the creative space to perpetuate growth and innovation, which is crucial considering consumers are faced with more choices now than ever before. Between technology, hyper connectivity, globalization and considering that Americans have more retail square footage per capita than just about anywhere else (to the tune of 46.6 square feet as compared to 23 in the U.K., 13 in Canada, just two square feet per capita in India and only one and a half in Mexico), businesses need to be more nimble than ever before if they want to succeed.
To learn more about purpose led companies, watch the EY archived webcast: Women Entrepreneurs And Experts Talk Scaling Big.