Illustration by Rachel Revilla
The owner of what is now one of the most profitable and famous Asian multinational companies approached me a few years ago with the request to advise them on the strategy for their global expansion. After I consulted him and the CEOs of his businesses, I asked him what had been the most surprising to him during our collaboration.
He smiled and replied: “You have opened my eyes to the fundamental importance of purpose for the success of our global expansion and the growth of our business.” After explaining the significance and impact of “purpose” to him and the CEOs of his companies, I also advised them on what corrections they would need to make in their communication and strategy. Fast forward to today: they are now one of the top global market leaders in their industry and the only non-American company in the global top 15.
Why do all businesses need to start with “why”?
What does “purpose” actually mean and why is it so important? The purpose is your company’s reason for being. Why are you here? Why does your business even exist? Why does your business matter? Why should it matter in the future?
If you cannot answer these questions, you are in trouble. A few years ago, I was sitting in the office of the dean of the Cologne Business School in Cologne, Germany, after delivering the opening keynote at the World Business Dialogue, following in the footsteps of Michael Bloomberg and Bill Gates. We were discussing top talent in Germany. “Why do you think the banking industry has such a hard time attracting top talent here in Germany?” he asked me. “They offer great salaries and add tremendous benefits, but still they only get our second- and third-rate graduates, not our top students.”
“It is obvious,” I answered. “After the global financial crisis of 2007 and 2008, the majority of people blamed the banking industry and the excessive risk-taking by global financial institutions for the dilemma. As a result, top talent does not want to work for the banks anymore, at least not in Germany, and at least not for the next few years.”
In the global financial crisis, some banks had lost complete sight of their purpose: to be there for their clients. Instead, they had shifted to the other extreme. I remember a scene from the movie Wolf of Wall Street: “Forget about the clients. The name of the game is to move the money from your clients’ pockets into yours.”
What the pandemic has changed
“Purpose” means your net positive impact on society and the world. That may sound complicated but it is surprisingly simple. Do people believe that your business matters? And that it will matter in the years to come? Is your business doing good for society? Will the work you do leave society and this world as a better place or not?
This is exactly the thought process that top talent and most consumers go through when making their choices. And this has only deepened with the COVID-19 pandemic. Why? Because people the world over were forced to look inside.
This looking inward has prompted them to question their purpose, their role in society, the life they want, and their professional careers. This is why we see a shift in people’s expectations—top talent and consumers—the world over, including in the Philippines.
Why your business needs to become a good corporate citizen
What does this mean for you? You have to understand that the answer to the question: “Do we leave a net positive impact?” is fundamental for your success because it will determine if you can attract top talent and clients. This is why the owner in my introductory example was so surprised: it is one of the most overlooked secrets of prolonged business success and growth.
What most CEOs and business owners do not fully understand is that the buying decisions of consumers are only partly influenced by the price and features of a product or service. A fundamental part of people’s decisions is based on the “intangibles”—the things you cannot quantify.
And the most important part of these intangibles is the net impact they believe your business will have on society and this planet. In the new postpandemic economic order, the top talent and consumers want to do business with the best corporate citizens. As a result, the importance of your business’ perceived net impact influences the decisions of consumers and top talent more than ever before.
The secret of the giants
Sounds too far-fetched? Why do you believe Steve Jobs had so much success in making Apple into a rockstar brand with phrases such as “we will make a dent in the universe.” “Purpose” explains why Apple’s customers sleep in front of the Apple store in New York City the night before a new iPhone comes out just so that they can be the first in line the next morning.
Why has Elon Musk become one of the richest people in the world by having highly ambitious goals? Because his businesses are directly tied to two of the most pressing global challenges we face in the world today: overpopulation (SpaceX’s ultimate purpose is to colonize Mars) and scarce resources (Tesla and Tesla Energy).
And why do you think Google has not only become one of the most valuable companies in the world but was already able to attract top talent in its early days when it could not pay good salaries?
Consumers and top talent alike believe that the purposes of all these companies matter. And that these companies will make the world a better place. And that all of us are ultimately better off because these companies exist.
That is how you build phenomenally successful businesses that have massive growth.
Why perception is everything
But let us not be mistaken: the real impact that these companies have is not important here. Only the perceived impact matters. Perception is, unfortunately, the only thing that counts here. What does that mean for you and your business? You have to not only build a better company—one that truly leaves that net positive impact—but you also have to communicate to others what you do and what that positive impact is.
Practical steps
1. Define the purpose of your business.
2. As Albert Einstein said: “If you can’t explain it simply, you don’t understand it well enough.” If you cannot explain the net positive impact your business will have in a few simple sentences, this will be lost in your communication with your customers and it will also not be clear in the conversations with top talent. As a result, you will be far below your ideal growth potential and you will face challenges in attracting and keeping top talent.
3. In your advertising or promotional campaigns, whatever they may be, your purpose has to shine through so clearly that your customers know and understand it.
4. When your human resources team conducts interviews with top talent, your net positive impact on society has to be front and center. INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email
Tom.Oliver@inquirer.com.ph.