Harvard Business Review Analytic Services conducted a survey sponsored by the EY Beacon Institute. They took a global survey of 474 executives. Most believe in the power of purpose driven organizations but only a few companies consciously embedded their purpose to a point where they have enjoyed the full benefits of a purpose-driven company. However, these were the ones to see measurable revenue growth, successful innovations, and ongoing transformation.
The definition of organizational purpose used by the researchers was: “an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society.” Ninety percent of the executives understand the power of purpose but only 46 percent reported that it helps guide their strategies and decisions.
“It’s an inside-out strategy rather than outside-in: you don’t just look at where the opportunities are and where you could make a lot of money as a way to decide where you ought to be. You decide where you want to be strategically, based on what you want to do,” said Michael Beer, HBS
“Every decision should be looked at in terms of purpose. Some decisions may be purpose neutral. But purpose is certainly not just a marketing issue or positioning of your brand image. Purpose should impact every aspect of the firm,” said Raj Sisodia, author of Conscious Capitalism
We hear a lot about how to find your purpose or how to clarify your Mission. Actually, Mission and Purpose are the same things. Your Mission will describe simply “why” you’re in business. Why are you doing this?
If you do a quick study of the most successful businesses, you’ll see that a strong Purpose was at the center of that success. So the importance of an inspired Mission/Purpose and the need of being driven by it is one of the first things I want to emphasize in my efforts to share business building information.
I like to study legacy businesses so..
I’m going to tell a story about one of the best examples of a legacy business and their Mission I’ve found.
You’ve probably heard of the Birkenstock Shoe Company. They’ve been in business for 244 years. It’s one of my favorite case studies because it’s a great example of how a deeply engraved Vision can move you through years of success. Birkenstock was organized in 1774 and remains a highly successful company today.
The Birkenstock brand traces its roots to Johann Adam Birkenstock, registered in 1774 as a “shoemaker” in local church archives in a small village in Germany. In 1896 Johann’s great-great-grandson Konrad Birkenstock developed the first contoured insole for use by shoemakers in the production of custom footwear.
Actually, he was the one to develop the foundation and Mission of the company we have today.
Konrad Birkenstock ran the company with this Mission—to “craft premium quality shoes that are good for you”. If you study their history, you’ll see this common thread throughout Birkenstock’s existence. The timeline of his innovations and growth goes like this. From 1800 to 1900, Konrad Birkenstock opened two stores in Frankfurt, Germany and started making insoles for shoes
He studied the industry deeply. He was passionate about it. So as a result……..
For about 15 years Konrad Birkenstock held seminars and lectures to other shoe masters and organizations to explain his ideas for a custom shoe and also to get license contracts for the production of his footbed shoes. He traveled extensively throughout Germany and Austria.
Between 1900 and 1985 he continued on his Purpose to “craft premium quality shoes that are good for you”. Konrad used the orthopedic workshop at the Frankfurt hospital to manufacture footwear for wounded soldiers. During this time, he began leather manufacturing and his son Konrad Biirkenstock jr joined the organization.They gained many customers for what was called “The True Blue Footbed”. It was so successful that it resulted in many hours of manufacturing overtime for the company. The footbed was sold in: Austria, Italy, France, Denmark, Czechoslovakia, Luxembourg, Belgium, Norway, The Netherlands, Sweden and Switzerland.
Birkenstock because of his extensive study and understanding of podiatry, held training classes for over 5000 specialists and this led to strong support from leading doctors of the time. In 1947, he published his first book titled “Podiatric System Birkenstock” which became the most widely read textbook on podiatry at the time.
During this timeframe, they developed and patented a self-coloring footprint paper. This gave them the ability to sell the Birkenstocks by mail order. They also invented another product called Birko-Cork, a pliable and workable thermal cork, developed for orthopedic use. In 1972, his second book entitled, “Book About Foot Health” went to print.
Another significant invention was the first electro-mechanical moulding machine. This helped them produce a variety of shoe sizes.This innovation put Birkenstock far ahead in world markets and they didn’t stop there. They kept inventing and produced another new material for orthopedic shoes called the Birko-Cell.
In 1987, Birkenstock was able to produce shoes in sizes up to 50. They used more than 2 million specialty catalogs to market their products. They had a deep understanding of how to market in that time.
In 1988, it became noticeable that Birkenstock was interested in having minimal impact on the environment because they began using environmentally friendly solvent-free glues for their production. True to their Mission/Purpose to “craft premium quality shoes that are good for you”
Birkenstock led the way in environmental protection.
This time it’s shown in environmentally conscious manufacturing. They lowered their energy consumption by 90% by installing large heat regeneration units into the ventilation system. In addition, new systems used heat for the generation of electricity and gas filtration. I’m sure some of you know how that works. I don’t. It cut their impact on the environment.
By 1998, computer controlled processing enabled them to ship and receive 80,000 pairs of shoes per day. By 1999 they were supplying shoes all over the world.
You’ve probably also heard of the Footprints Company. Of course, this is a Birkenstock Company you can find online.
The Footprints company was organized and expanded its program into a trekking or hiking collection as well as ladies’ and men’s dress shoes.
Birkenstock was able to produce the world’s first super light weight EVA (ethylene vinyl Acetate)clog. We see that in the description of many shoes today. It’s like rubber, very flexible and durable.
Birkenstock is continuing to expand their facilities and styles to this day under the Purpose of “Crafting premium quality shoes that are good for you”
The current CEO recently stated.
“New manufacturing processes aided by the latest technologies and the development of new materials and attractive models all form the foundation for (pleasing our customers). In this way we will be able to offer you unique quality and unmatched comfort, walking and standing, today and tomorrow – you can rely on it.”
This demonstrates the power of a strong embedded purpose.
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Your business purpose comes from a desire to contribute something. Your purpose could be mainly economic progress for yourself and partners or it can be geared toward contribution to an improved society. You have designed either of these from your personal desires. Therefore, your Purpose is a deeply held expression of what you believe you can do with your business. The importance of your Purpose will become clearer as you follow my podcasts.
There are a few questions you can ask yourself to help you determine whether or not you have a purpose you can strongly embed into a business.
Ask yourself these questions:
Are you excited about your business venture? Are you fulfilling a life-long dream? Are you excited to get up everyday to work on your venture? If you answered yes to any of these questions, you may have the beginnings of a deeply embodied business purpose. A deeply embodied business Purpose (Mission) is a purpose that motivates you dramatically, gives you a sense of well being and brings you joy.
If this is the state you’re in, congratulations. Your business has a much higher chance of success than many of the other businesses trying to make it.You will need a strong Purpose to get you through the many difficulties of building a business.
Craig and Snook shared an interesting finding in an article “ From Impact to purpose” explaining: “Business experts make the case that purpose is a key to exceptional performance, while psychologists describe it as the pathway to greater well-being. So a strong Purpose has business and psychological advantages.
Doctors have even found that people with purpose in their lives are less prone to disease. Purpose is increasingly being put forth as the key to navigating the complex, volatile, ambiguous world we face today, where strategy is ever changing and few decisions are obviously right or wrong.” Purpose keeps you grounded and moving in the right direction.
As the designer of your new business, you can do anything you want to do. Designing a Purpose that energizes you can be your first step. This can also be your first step to building legacy.
More on Purpose, Values and Vision in: “20 Directives for Small Business Success: Do or Die”
Supporting information easily available at: https://goo.gl/NkDvWz