We are all accustomed to answering the question “What do you do?”—and we usually have a pretty good answer. But rarely do we hear “WHY do you do it? What is the purpose for your business, the reason you started this journey called entrepreneurship (whether that journey began decades or weeks ago)?” Or another way to ask that question, the George Bailey version of the question: “What would your community look like without your business? What does your business contribute to your community, industry, customers that no one else does? How do you create or add value for your customers and your employees?” “Authenticity is everything – you can’t fake purpose.” John Repogle, CEO, Seventh Generation Purpose is not what a business does, but why it exists.  For example, an IT company sells their services to solve technical issues, but its purpose is to help their customers be more successful by using technology to achieve customer goals and success. Your purpose guides how you engage with your customers, which partners you work with, and how you develop your people and nurture your culture. Being a purpose-driven organization requires first knowing your purpose; next, communicating it to your stakeholders (internal and external); and then, staying true to it.   Identifying your company’s purpose, embracing it and championing it within your organization is important. On an operational level, your business’s purpose helps answer questions about what type of business entity will you set up, how you will organize and manage your people, what type of leadership you will need, even where you will locate the business.  A recent study done by the Korn Ferry Institute discovered that focusing on purpose impacted companies’ profit, employee engagement, and customer relations. Purpose drives performance and inspires people, and hence the business, to do great things.  When inspired, people and businesses focus huge amounts of energy that results in high level performance.  They study found that purpose-driven businesses are able to engage “people in a profound manner, contributing to society and establishing new criteria for organizational success.”  The study found that the impacts of being a purpose-driven organization were undeniable. Increased Growth Companies who focused their team’s efforts on their purpose had annual growth rates nearly three times the annual rate for the industry.   Engaged Employees The survey found that 90% of people who worked in a purpose derived business reported felling engaged in their work, compared to only 32% of employees who worked in companies who didn’t focus on purpose.  It also helps encourage increased collaboration, innovation and effective decision making. Attracting and Retaining Customers Customers want to know that the companies they are buying from are committed to service and improving their communities.  For example, the KIND company’s purpose statement is “to do the kind thing for your body, your taste buds, and your world.  We’re on the mission to make the world a little kinder, one snack at a time.”  This well-articulated purpose statement makes customers loyal to the concept of kindness, as well as the product. Purpose matters because your business’s values are a direct product of its purpose.  As a business grows, sometimes these values get lost.  By communicating, acting and making decisions around purpose, you continually connect your purpose with your goals and performance.  Your well-articulated purpose inspires customers, brand loyalty and establishes commitments to goals, as well as increases employees’ engagement and loyalty to the company.   It is not enough to know your purpose; your business has to live it.  An organization’s purpose, values and expectations should permeate every facet of business because doing so continually reinforces the why and how you do business to all. Resources and Tools: Business Model Generation, Osterwalder and Pigneur (Self-Published, 2009) and the Business Model Canvas (link) Dare to Serve, Cheryl Batchelder (Berrett-Koehler Publications, 2015) The 360 Degree Leader, John Maxwell (Thomas Nelson, Inc, 2005) Purpose Meets Execution, Louis Efron (Bibliomotion, 2017) First, Break All the Rules, Buckingham and Coffman (Simon and Shuster, 1999) Good to Great – Why Some Companies Make the Leap and Others Don’t, Collins (Harper Collins, 2001)  “The Power of Purpose Driven Companies” (CUNA News Podcast, May 24, 2018) “How to Build Your Influence” (Entreleadership #240, Clay Scroggins, December 31, 2017) “Resilient: Purpose-Driven Organizations, Interview with Daryl Brewster” (Deloitte) “Turning Purpose into Performance” (HBR Ideacast, July 24, 2018)

There is no question that 2020 was a year of immense uncertainty and change for many businesses.  The Covid pandemic forced many business owners to have to re-examine the way they did business and many are still trying to navigate what the new normal will look like.  It is no wonder that many are still trying to define the exact path their business will take in the coming year.   Whether you still know the purpose of your business or if you have had to pivot drastically, we’re all struggling with placing the building blocks in the right places in the right sequence as the world opens up again.  If there is one thing that most business owners have learned during this past year, it is that having the capacity to be flexible and pivot quickly is absolutely necessary to long term success.  In a pandemic or not, being able to do this is one of the biggest challenges business owners and leaders face as their businesses mature and the market changes. The secret lies in process-based capacity building. Most companies eventually face a predictable crisis of stagnation marked by drops in revenue and profit growth. Rarely is this because your business model has suddenly become outdated. Rather, it is the result of small breakdowns in one or more functional areas or overstretching of key resources.  Process-based capacity building has at its core the 5Ps of business: Purpose, Process, People, Product, and Profit. The functional alignment of these five core areas synergizes maximum business success. Misalignments are occurring if you are hearing the “un’s, re’s, mis’s and dis’s” that impede growth – unreliable, unproductive, repetitive, reactive, misaligned, miscommunicated, disorganized, dissatisfied, to name a few. While you understand at some level that you must focus on fixing the problems behind these descriptors to stabilize and grow, emphasis on doing so is often lost in the business of day-to-day business.  Capacity building guides you through a process to systematically and repeatedly assess your current state. Using this systematic process allows you to build the ability to be flexible, to recognize when you need to pivot (either small or large pivots) and increases the opportunity for innovation.   Compare that current state to your strategic goals and desired future state to identify gaps.  Establish improvement initiatives to realign each functional area for growth and success. Shore up operational shortcomings.  Ensure that your team members are working toward a unified vision with clearly defined tasks and in direct alignment with your strategic initiatives.  In short, capacity building means taking the right actions, at the right time, for the right reasons by “clicking out and back filling.” This means identifying the next best improvement initiatives to help achieve your strategic goals (clicking out) and what needs to be improved, shored up, put into place to achieve those specific improvements (back-filling). Doing this in 90-day sprints helps to minimize the risk or resource fatigue or taking on too much at once and allows a timeframe to assess success of implemented changes. Process-based capacity building is a framework for determining what your next best steps are (in a continual series of click outs and backfills) to ultimately achieve your strategic goals. Focusing on building capacity in a process-based manner allows you to:  Continually evaluate the degree to which you are delivering on your promises, both internally and externally.  Recognize how well you understand and track operational strengths and weaknesses.  See the extent to which you know your financial numbers and manage your KPIs. Develop and train your entire team to contribute to your vision.  Grow your ability to stay connected as a team to your core mission.  While the last year may have forced many of us to stretch and inserted uncertainty at unprecedented levels, process-based capacity building gives you the framework for continual improvement and growth. Resources and Tools: Start your capacity-building efforts with Cascadia Management’s Group’s Organizational Maturity Assessment Use Cascadia Management Group’s template Initiative Tracker (link to document) to list and keep track of your capacity building initiatives. Related Blogs: BUILDING CAPACITY:5 Steps to Assess, Improve and Grow Your Business BUILDING CAPACITY:The Role of Leaders