Article

The Opportunity: Why Entrepreneurs Should Put Purpose First

There’s a story I love to revisit that says when Sir Christopher Wren was commissioned to rebuild St. Paul’s Cathedral after the Great Fire of London in 1666, he asked three different bricklayers at work, “What are you doing?”

The first bricklayer said, “I’m laying bricks.”

The second said, “I’m building a wall.”

And the third said, “I’m building a great cathedral.”

Now, from these three, which bricklaying employee would you guess feels the most connected to their work? The one who would be the least likely to quit? Who goes home happiest after a day’s work? Who vendors would most like working with? The one most likely to go the extra mile?

Based on their responses, it would seem that the first worker is motivated (if at all?) to hit a mere production target. The second seems to at least share some vision of a final product. But the third worker has a purpose.

And I’m here to insist that you should put purpose first, and build it into the core of your company, because purpose creates opportunity that entrepreneurs cannot pass up.

Entrepreneurs who lead with purpose can build the sort of company that quarterly targets or vision alone can never realize. In purpose lies the opportunity to create a better organization, a better work environment, and better lives for your employees and yourself—and in effect, to increase your company’s innovation, growth, and impact.

This is something I strive for with my consulting practice: to help entrepreneurs align their organization to a common roadmap (their purpose!) in order to achieve their wildest dreams without getting lost along the way. Effectively, using purpose as a lens for everything helps us develop strategies that optimize both profit and impact. I believe that through entrepreneurship and innovation, you can both spread the wealth and share your values.

Here I lay out the purpose-led approach to entrepreneurship as I see it. Following it is for those who want to be more mindful, passionate, and focused on the long-term. For those who want to work with happy and proactive employees, who feel ownership. And for those who want the company they’re building to have a real impact. But this approach is NOT for:

• Leaders who see their people as a means to an end—e.g. a “cost center”—instead of believing that culture is a strategic asset to invest in
• Those unwilling to invest (i.e. in time and money) in the growth of yourself, your team, and your wider vision
• Those looking for quick results instead of systematic and organizational change

What is purpose?

When you’ve identified the reason why your company should exist, at the most basic level, you’ve found your purpose. It declares—to yourself, your employees, your investors, your customers, and the public at large—”We are here, and this is why it matters.”

Take SpaceX for an example of a company with clear purpose. SpaceX isn’t about building cheaper rockets (their strategy). And it isn’t about going to Mars (their vision). The reason SpaceX exists is to “make humanity multiplanetary” and, by extension, help ensure the future of the human race. This statement gives distinct meaning to and clarity around why the company is in business and what it strives for every day.

For more color on what purpose is and how to identify it, see my blog post, Purpose: Why You Are > What You Are.

Why put purpose first?

Many entrepreneurs don’t lead from purpose. The typical story goes like this: An entrepreneur sees a market opportunity, so they start building something cool to fit that. But as the growth of their company accelerates, they still haven’t figured out a bigger “why” behind their business—either because they’re not sure what the opportunity in it is, or the chaos of daily operations gets in the way of realizing the bigger picture.

Well, first things first, right? This is the point of purpose:

• Entrepreneurs should put purpose first because of the significant opportunity it makes possible—for employees, the company, and yourself as the entrepreneur—and which strategy and vision alone do not.

There is an emerging, but already convincing (I think), body of evidence supporting this. Let’s dive in.

What purpose does for employees

The U.S. meaning deficit

Today, most U.S. employees are disengaged and do not feel meaning at work. A 2019 Gallup study found that only 35% of employees feel engaged at work. (It’s worth acknowledging that this is the highest mark since 2000—perhaps because more companies are putting purpose at the core. But it still means almost two out of three American workers feel DIS-engaged). And, a 2013 survey of roughly 12,000 white-collar workers found that 50% of employees lack a connection to the company’s mission (versus 25% that feel connected) and that 50% of employees lack a feeling of meaning or significance in their work (versus 36% that feel meaning).

And disengagement is expensive. The 2017 State of the American Workplace report by Gallup estimates actively disengaged employees cost the U.S. economy between $483 billion and $605 billion each year in lost productivity.

So, as humans seeking fulfilment, it’s no surprise that employees expect leadership to communicate clear purpose and direction—but most don’t.

A 2009 global survey of tens of thousands of working people asked, “What do you look for and admire in a leader?” The survey revealed that the top two things employees sought from leadership was “honesty” and “being forward-looking.” However, the 2017 Gallup report found that only 22% of employees strongly agreed that the leadership of their organization had a clear direction, only 15% strongly agreed that the leadership made them enthusiastic about the future, and only 13% strongly agreed that their organization’s leadership communicated effectively.

These numbers indicate that a sense of purpose is missing at the majority of workplaces. I hazard to guess that most fail to see any impact from their daily efforts—the activities that occupy most of their time—on the larger organizational goals. And this understandably leaves them feeling disconnected from any “larger purpose” their work might have and, thus, leaves teams out of alignment.

However, purpose-oriented employees are more satisfied and engaged. LinkedIn’s 2016 Global Report on Purpose at Work report shares that 73% of purpose-oriented professionals are satisfied in their jobs, where purpose-oriented professionals are defined as prioritizing work that matters to them, their company, and to the world—over money and advancement.

Here’s even more findings to fuel the fire:

• Compensation has only a marginal correlation with job satisfaction.
• Employees with more meaningful work are less willing to leave their current jobs and organizations for higher paying opportunities.
  • They are also 69% less likely to plan on quitting their jobs within the next 6 months and have job tenures 7.4 months longer on average than those with less meaningful work.
  • On average, employees accept 32% lower salaries for personally meaningful jobs compared to jobs perceived as personally meaningless.
  • Employees with meaningful work spend one additional hour per week working, take two fewer days of paid leave, and generate an additional $9,078 of revenue, per year. And according to the same survey, to get greater meaning at work, 9 out of 10 workers say they are willing to earn less money. On average, they’d sacrifice 23% of future earnings—roughly $21,000 a year—for work they always find meaningful.

  More meaning, less money

  The workplace is where most of us spend the bulk of our productive hours, and as these stats make clear, most of us would prefer to get more than just money in exchange for our time. In fact, most of us would accept less money for more meaning, and those who already find a larger purpose in their work are more productive—and have longer tenures.

  To add to all of that, researchers are also suggesting that with younger employees, and Gen Z especially, tomorrow’s workers are going to demand more and more such a “job value proposition.”

  So, devising ways to instill greater purpose into the fabric of your company (and it’s missing in most) is a worthwhile endeavor, considering its positive effect on all of the following for your employee:

  • Acquisition
  • Retention
  • Engagement
  • Alignment
  • Productivity
  • Quality of life

  Beyond your employees, though, purpose has even more roles to play.

  What purpose does for you, the entrepreneur

  Entrepreneurship is an ultimate type of delayed gratification—working hard and sacrificing today for the biggest of payoffs tomorrow: realizing a dream.

  Yet, along with this comes the attendant “entrepreneurial emotional roller coaster.” In startup life, happiness too often depends on how things are looking. That is, when you string a couple wins together, and things appear headed in the right direction, you feel pretty happy. But if things start to drift from the future you envisioned, it can be pretty depressing. With most new businesses, things can swing wildly, even day-to-day or hour-to-hour. When you work that hard to build out a dream, emotional investment is unavoidable. But it means your leadership, and personal well-being, can suffer.

  Working from a place of purpose, however, can help mitigate the roller coaster. Without identifying your purpose—what you are really trying to accomplish as an entrepreneur—it’s likely that your business and personal lives feel out of sync, like there’s a zero-sum, one-eats-the-other game going on between them. Clarifying your purpose will help unify your business and work “selves” and quiet this internal fight.

  Here, the evidence is primarily from my own personal startup journey and my experience consulting founders and entrepreneurs.

  Just like I did when I was in their shoes, when we first meet, the entrepreneurs I’ve worked with are usually asking themselves questions like these:

  • How can I manage the day-to-day chaos better?
  • Did I hire the right person? Should I fire this person?
  • How do I cultivate accountability so my team can do more?
  • How do I manage myself as a person better? My day?
  • How can I stop working so much?

  Paradoxically, it’s the “Bring on the work” attitude that gets so many entrepreneurs to the point of success, but also gets them stuck in the weeds. Not being afraid of the grind, they have so far put in the innumerable hours it takes to get a company off the ground. The equation: more execution + more hours = success.

  But at a certain point, this no longer holds true. Eventually, there is so much work, you simply won’t be able to do it without exhausting yourself, mentally and physically—nor should you try, because you’ve become a limit to the future growth of your company.

  The key to continued growth is first to clarify the chaos of the day-to-day. Being too deeply entrenched in daily operations, it’s difficult to see the simple solutions or alternative ways to do things. But instead of staying as a player in the orchestra, think, How do I become the conductor at the helm who spends their time on the high-level objectives?

  It comes down to identifying your purpose, and then aligning your daily decisions to it. Purpose helps temper the stress of the chaos, makes decisions easier, and gives you confidence. It helps you more easily say “No” to the things you should say no to.

  What purpose does for a company

  So far, we’ve touched on how purpose makes for happier employees, a happier you, and how the net effect can also increase the bottom line. But guess what? There are even more positive effects at the company level. A purpose-driven company has:

  1. Improved perception of customers, stakeholders, suppliers, and regulators
  2. Easier talent acquisition
  3. A better ability to see and seize on growth opportunities
  4. Larger impact

  First, the power of perception should not be underestimated—especially given the current social trends of conscious production and consumption, which will increasingly amplify the power (and necessity) of organizations having a normative purpose. This will only become more acute as the currently young, socially conscious generations become not only the new workforce, but also your main customers, vendors, shareholders, and decision-makers.

  As the CEOs of some of America’s largest companies say, maximizing shareholder profits can no longer be the primary goal of corporations. The winds of change demand that companies should instead “commit to balancing the needs of shareholders with customers, employees, suppliers, and local communities.” Ultimately, companies that don’t strive for this balance may lose market share or regulatory favor.

  Second, along those same lines, purpose-led organizations will be the beacons for talent. Why would the talent work for you for mere compensation, when they can get compensation and a sense of purpose from your competitor? And what could be more critical to the long-term success of a business than the quality of its people?

  Third, building out products and services from a purpose—instead of a single strategy or vision—marks an organizational paradigm shift towards innovation and whole-ecosystem thinking and away from the current battling for share in the market. When a company’s mission is to improve people’s lives in some way, instead of merely to iterate on an existing product, its perspective shifts. It sees forest for the trees, per se, making it more likely to innovate, because the product switches to a means to achieving its goal, not the end of the goal in itself.

  Lastly, we are in a capitalistic world, and an organization with a worthwhile purpose will impact people’s lives through its economic activity. And the more it strives to “balance” the financial demands of investors with its social impact in this activity, the more it can imprint its values on the world.

  And this is where my mission lies—and it’s why I work with entrepreneurs and rising companies. For-profit entrepreneurship based on purpose (as opposed to profit-seeking or philanthropic efforts alone) can be a powerful vehicle for spreading values. More than philanthropy or the Invisible Hand alone, entrepreneurship can be a force for values because it puts the economic engine behind them.

  That’s why my purpose is to help entrepreneurs devise strategies to avoid sacrifices on both sides, on either profit or social impact.

  How to implement purpose (and how I can help)

  A report from Wilbur Labs on “Why Startups Fail” found that “7 in 10 founders face potential business failure,” but those entrepreneurs who are successful are:

  …despite the stereotype, […] not rugged individualists living off Walden Pond. They surround themselves with experts and mentors who have encountered and solved the challenges endemic to building any startup. Founders who learn from these advisors can focus on their own vision rather than on reinventing the wheel.

  As I’ve tried to show, I believe one of the most critical tasks of an entrepreneur is to identify your purpose and implement it at the core of your company. And if you’re not sure how, I can help.

  I start with one-on-one conversations with entrepreneurs, and work from simple questions, and thinking long-term, to home in on your purpose. Questions that identify “What am I actually doing?” and “Where do I actually want to go?”

  From your answers, I help present different reflections of your purpose. Ultimately, it’s up to the entrepreneur to listen to their inner compass to find their purpose. But once identified, I can help you accomplish the concrete implementation of that purpose, with tools such as OKRs as the mechanism to ratchet closer and closer to your long-term goals.

  There is a clear difference between companies led by strategy, versus vision, versus purpose. It comes down to the question:

  Which would you rather accomplish with your time and energy? Simply lay bricks, construct a wall—or build a cathedral?