Doug Flaig is the President of Stratus Building Solutions.
Quality and price. Consumers have traditionally made many, if not most, of their purchases based on those two factors. While they’re still important considerations, today new generations of consumers are increasingly aligning their spending with companies that demonstrate a genuine commitment to environmental sustainability and social responsibility.
This rise of values-based consumerism has begun shaping business priorities. CEOs are evolving into chief purpose officers, championing purpose-driven leadership that integrates these values deeply into their business models.
Purpose-driven leadership refers to a management style where the head of an organization makes sure the company’s core values are aligned with a meaningful social or environmental mission. This approach emphasizes the importance of creating a positive impact beyond just financial performance.
For example, at one of my companies, we specifically chose not to compete on price, but to deliver extraordinary value to our customers every day and be a consultative partner. At one point we were talking to a potential customer that, if we landed them, would have quadrupled the size of our company. However, our purpose was to expect a fair margin for our extraordinary service, and this prospect expected us to be satisfied with single-digit margins on the account. Because this was not in alignment with our values, we chose to walk away from that opportunity. That allowed us to focus on landing more customers consistent with our core purpose and actually resulted in more margin that year than if we had pursued that one customer.
Leaders who adopt this style prioritize the well-being of their employees, customers and the community.
They strive to make decisions that contribute to the sustainable success of both the organization and society at large.
I’ve noticed purpose-driven leaders are typically characterized by their commitment to transparency, ethical practices and a vision that inspires and mobilizes their workforce and stakeholders around shared goals that extend beyond traditional business objectives. This type of leadership fosters a culture of trust, engagement and loyalty.
Becoming a purpose-driven leader takes intent. There are several strategies you can employ to ensure your company’s mission resonates both within your organization and to the outside world.
Define your purpose.
First, you need to establish a purpose. It should be one that emotionally connects with employees, stakeholders and consumers. For example, a commercial cleaning company might frame its mission as protecting people’s health, rather than simply cleaning spaces for aesthetic reasons. This creates a deeper sense of meaning and motivation for the work being done.
Next, write up a clear, concise and memorable statement that encapsulates your purpose. For example, I think the Ritz-Carlton’s motto, “We are ladies and gentlemen serving ladies and gentlemen,” reflects their commitment to exceptional service and respect for both guests and staff.
Use your purpose to guide strategic decisions.
Your company’s defined purpose should serve as a framework for all strategic decisions. Each decision, be it an operational change or a new product, should be evaluated to see whether it aligns with the organization’s purpose. This alignment ensures that the company remains true to its mission and evaluates its success not just by financial metrics but by how well it fulfills its purpose.
For example, at my company, we made a change of policy that, if enacted earlier, would have resulted in a lower transfer fee to an outgoing master franchisee who had retired and sold their territory. There was no legal obligation on our part to make any changes retroactively, but one of our purposes is to “do the right thing.” We discussed this issue with the board and were unanimous in making a refund of the difference to our former master franchisee.
Prioritize alignment and consistency.
It’s important that the entire leadership team embody the company’s purpose. If leaders fail to practice what they preach, it can lead to cynicism and undermine their authority and the organization’s integrity. Leaders who do not align with the purpose should be reevaluated, as their presence can be detrimental to the organization’s culture and goals.
And you must be consistent. Consistency in messaging and actions that reflect the company’s purpose helps build trust and loyalty among employees and customers. This includes internal communications, marketing strategies and the overall corporate culture.
For example, when I was in the telecom industry, we had a situation where we accidentally invoiced the customer twice for the same service. The customer paid both invoices, but our purpose was to serve our customers with integrity. We immediately let the customer know and made the refund of the difference that same week.
By adopting and integrating these strategies, you can transform your organizations into purpose-driven entities where every decision is guided by a meaningful mission. This alignment can bolster the company’s reputation, strengthen employee engagement, enrich the community and the environment, and position the company for sustained success in a competitive market.
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