Purpose and culture can seem so soft and fuzzy. Why should a business spend the time to find their purpose and make it a critical part of everything it does? Here are five good reasons I gathered from a great article by Jim Hemerling and Cathy Carlisi of the Boston Consulting Group. 

Purpose Pays

Last week, we mentioned how Collin’s visionary companies outperformed the marketplace by 15 times and how “conscious capitalism” companies outperformed by eight times or more.

Boston Consulting Group surveyed the leaders, employees and customers of 50 companies. They broke the companies into two groups – those with high-purpose scores and those with low-purpose scores.

They found the high-purpose group had twice as many top-performing companies (as measured by total shareholder return) versus low performers. More evidence that purpose pays.

Rising Aspirations and Shifting Priorities

More and more leaders are committing to deliver on the “triple bottom line” of people, planet and profit. These leaders are striving to have a positive impact on the world and leave a legacy. At the same time, many workers, especially millennials, are seeking workplaces that are an inclusive community working together to make a positive impact on the world.

This is another way purpose pays. Purposeful companies attract an engaged and talented workforce. These companies do not have to compete solely on pay because they offer more than just a paycheck to their team members.

Stability Through “Always On” Transformation

Sources of disruption are multiplying. This requires leading companies to always be transforming their models to compete. Purpose gives these companies a “North Star” to test these transformation efforts against. It allows always transforming companies to not lose what made them great in the first place.

The Limits of Carrots and Sticks

Today’s best organizations realize the limits of carrots and sticks to motivate their workforce. They realize the need to appeal to their people’s heads and hearts. Studies have shown that our incomes, once above certain levels, have little impact on joy in our life. Deep down, every good person wants to make a positive impact on the world. Purpose-driven organizations help their people meet their financial and aspirational goals all in one place.

Community In a Digital Work World

More and more business is done over the internet. Many team members will never meet face to face, but only through video chat. Yet, we all still crave community. Organizational purpose can make these digital connections more meaningful because everyone on the team is striving to accomplish something bigger than “just business”.

The clarity provided by a clear purpose, vision and values can create and maintain a culture in a digital world when most cultures used to be maintained and established by proximity.