Simon Sinek took the business world by storm in 2009 with his lecture, How Great Leaders Inspire Action. The video is now the third most-watched TED talk of all time. In it, he unveiled his “Golden Circle” theory that showcases how leaders can inspire trust, cooperation, and change in their companies by placing “why” at the center of their business models.
Today, thanks to Simon and many others, business leaders around the world understand the importance of defining their purpose. And, while the Golden Circle can be a powerful tool when used correctly, the theory can be difficult to put into practice. Indeed, there is often much confusion between an individual’s “why,” the purpose of any given organization, and the link between the two.
1. Your “why” must be ambitious and worthy enough.
First and foremost, to be transformational, a purpose must be worthy enough. Almost every organization has a stated purpose but, oftentimes, it is too broad or vague. Starbucks’ mission is to “inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.” A purpose statement like this fails to provide any insight into the concrete actions that the company is taking to better the world.
Rather, to truly be ambitious, a company’s purpose needs to focus on solving an important environmental or societal problem. It should communicate a clear, collective vision that is the business’s reason for existing. For example, Ally Financial’s mission is focused on reducing barriers to economic mobility through financial education, affordable housing, workforce preparedness and digital job training.
When your business’s purpose is worthy, it expands far beyond a mere financial vision, as profits serve only to support your organization’s core mission. You can start to narrow down your business’s purpose by considering what unmet needs the world is currently facing and how your company is uniquely positioned to address one of those unmet needs.
An organization’s purpose provides a foundation for the beliefs, values, strategies and interactions within it, so you must make sure your mission accurately communicates your motivation to do good. Eventually, this higher purpose will dictate the way your business continues to grow and evolve.
2. As the leader of your company, it starts with you.
A company’s purpose must also deeply resonate with its leader. If your personal “why” and your company’s “why” aren’t in alignment, you will quickly encounter issues inspiring your stakeholders, especially your employees and your customers. You will experience cognitive dissonance and resistance, resulting in depleted energy levels and a lack of motivation.
Therefore, to create a strong connection between your individual purpose and your corporate purpose, you must take a personal approach when crafting your mission. Find inspiration in the life experiences, the personal journey, and the values that led you to where you are now. The goal is to identify a purpose that not only solves a problem, but will also satisfy your deepest aspirations. After all, as the founder or CEO, you are the primary advocate of your business’s core purpose.
3. To be truly transformational, you need to build a community around your company’s higher purpose.
Finally, you must surround yourself with a community that is passionate about advancing the same purpose. Internally, this means establishing a strong culture that is reflective of the purpose you serve. It also means that you take an inclusive approach toward developing a concrete roadmap for solving that one societal or environmental problem. Talent attraction, employee development, and internal communications should also be focused around furthering the business’s purpose.
Externally, your communication efforts must help all your stakeholders—including your customers, vendors and shareholders—understand your mission and feel invested in advancing its progress. To do so, communicate regularly on the organization’s progress toward its mission. As a result, they will all become members of a community in service to the business’s higher purpose. Take Patagonia as an example—on their website home page, they regularly update customers on the results of their actions towards reverting climate change.
When the personal “why” of a company’s leadership, employees, customers and overall ecosystem is in sync, it’s as if magic happens—turnover declines, performance accrues, and customers turn into raving, loyal fans. In fact, a recent Korn Ferry survey found that an overwhelming majority of respondents, 96% to be exact, agree that companies that are dedicated to purpose-driven leadership experience long-term financial benefits.
More importantly, you can foster real change for the world because everyone involved is focusing their time, energy and passion in one aligned direction. It’s undeniable—an authentic purpose is a powerful tool for unleashing the full potential of an organization, its leader and its people.