The Superiority of a Purpose Driven Business

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Harvard Business Review Analytic Services conducted a survey sponsored by the EY Beacon Institute. They took a global survey of 474 executives. Most believe in the power of purpose driven organizations but only a few companies consciously embedded their purpose to a point where they have enjoyed the full benefits of a purpose-driven company. However, these were the ones to see measurable revenue growth, successful innovations, and ongoing transformation.

The definition of organizational purpose used by the researchers was: “an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society.” Ninety percent of the executives understand the power of purpose but only 46 percent reported that it helps guide their strategies and decisions.

“It’s an inside-out strategy rather than outside-in: you don’t just look at where the opportunities are and where you could make a lot of money as a way to decide where you ought to be. You decide where you want to be strategically, based on what you want to do,” said Michael Beer, HBS

“Every decision should be looked at in terms of purpose. Some decisions may be purpose neutral. But purpose is certainly not just a marketing issue or positioning of your brand image. Purpose should impact every aspect of the firm,” said Raj Sisodia, author of Conscious Capitalism 

We hear a lot about how to find your purpose or how to clarify your Mission. Actually, Mission and Purpose are the same things. Your Mission will describe simply “why” you’re in business. Why are you doing this?

If you do a quick study of the most successful businesses, you’ll see that a strong Purpose was at the center of that success. So the importance of an inspired Mission/Purpose and the need of being driven by it is one of the first things I want to emphasize in my efforts to share business building information.

I like to study legacy businesses so..

I’m going to tell a story about one of the best examples of a legacy businesses and their Mission I’ve found.

You’ve probably heard of the Birkenstock Shoe Company. They’ve been in business for 244 years. It’s one of my favorite case studies because it’s a great example of how a deeply engraved Vision can move you through years of success. Birkenstock was organized in 1774 and remains a highly successful company today.

The Birkenstock brand traces its roots to Johann Adam Birkenstock, registered in 1774 as a “shoemaker” in local church archives in a small village in Germany. In 1896 Johann’s great-great-grandson Konrad Birkenstock developed the first contoured insole for use by shoemakers in the production of custom footwear.

Actually, he was the one to develop the foundation and Mission of the company we have today.

Konrad Birkenstock ran the company with this Mission—to “craft premium quality shoes that are good for you”. If you study their history, you’ll see this common thread throughout Birkenstock’s existence. The timeline of his innovations and growth goes like this. From 1800 to 1900, Konrad Birkenstock opened two stores in Frankfurt, Germany and started making insoles for shoes

He studied the industry deeply. He was passionate about it. So as a result……..

For about 15 years Konrad Birkenstock held seminars and lectures to other shoe masters and organizations to explain his ideas for a custom shoe and also to get license contracts for the production of his footbed shoes. He traveled extensively throughout Germany and Austria.

Between 1900 and 1985 he continued on his Purpose to “craft premium quality shoes that are good for you”. Konrad used the orthopedic workshop at the Frankfurt hospital to manufacture footwear for wounded soldiers. During this time, he began leather manufacturing and his son Konrad Biirkenstock jr joined the organization.They gained many customers for what was called “The True Blue Footbed”. It was so successful that it resulted in many hours of manufacturing overtime for the company. The footbed was sold in: Austria, Italy, France, Denmark, Czechoslovakia, Luxembourg, Belgium, Norway, The Netherlands, Sweden and Switzerland.

Birkenstock because of his extensive study and understanding of podiatry, held training classes for over 5000 specialists and this led to strong support from leading doctors of the time. In 1947, he published his first book titled “Podiatric System Birkenstock” which became the most widely read textbook on podiatry at the time.

During this timeframe, they developed and patented a self-coloring footprint paper. This gave them the ability to sell the Birkenstocks by mail order. They also invented another product called Birko-Cork, a pliable and workable thermal cork, developed for orthopedic use. In 1972, his second book entitled, “Book About Foot Health” went to print.

Another significant invention was the first electro-mechanical moulding machine. This helped them produce a variety of shoe sizes.This innovation put Birkenstock far ahead in world markets and they didn’t stop there. They kept inventing and produced another new material for orthopedic shoes called the Birko-Cell.

In 1987, Birkenstock was able to produce shoes in sizes up to 50. They used more than 2 million specialty catalogs to market their products. They had a deep understanding of how to market in that time.

In 1988, it became noticeable that Birkenstock was interested in having minimal impact on the environment because they began using environmentally friendly solvent-free glues for their production. True to their Mission/Purpose to “craft premium quality shoes that are good for you” 

Birkenstock led the way in environmental protection.

This time its shown in environmentally conscious manufacturing. They lowered their energy consumption by 90% by installing large heat regeneration units into the ventilation system. In addition, new systems used heat for the generation of electricity and gas filtration. I’m sure some of you know how that works. I don’t. It cut their impact on the environment.

By 1998, computer controlled processing enabled them to ship and receive 80,000 pairs of shoes per day. By 1999 they were supplying shoes all over the world.

You’ve probably also heard of the Footprints Company. Of course, this is a Birkenstock Company you can find online.

The Footprints company was organized and expanded its program into a trekking or hiking collection as well as ladies’ and men’s dress shoes.

Birkenstock was able to produce the world’s first super light weight EVA (ethylene vinyl Acetate)clog. We see that in the description of many shoes today. It’s like rubber, very flexible and durable.

Birkenstock is continuing to expand their facilities and styles to this day under the Purpose of “Crafting premium quality shoes that are good for you”

The current CEO recently stated.

“New manufacturing processes aided by the latest technologies and the development of new materials and attractive models all form the foundation for (pleasing our customers). In this way we will be able to offer you unique quality and unmatched comfort, walking and standing, today and tomorrow – you can rely on it.”

This demonstrates the power of a strong embedded purpose.

Your business purpose comes from a desire to contribute something. Your purpose could be mainly economic progress for yourself and partners or it can be geared toward contribution to an improved society. You have designed either of these from your personal desires. Therefore, your Purpose is a deeply held expression of what you believe you can do with your business. The importance of your Purpose will become clearer as you follow my podcasts.

There are a few questions you can ask yourself to help you determine whether or not you have a purpose you can strongly embed into a business.

Ask yourself these questions:

Are you excited about your business venture? Are you fulfilling a life-long dream? Are you excited to get up everyday to work on your venture? If you answered yes to any of these questions, you may have the beginnings of a deeply embodied business purpose. A deeply embodied business Purpose (Mission) is a purpose that motivates you dramatically, gives you a sense of well being and brings you joy.

If this is the state you’re in, congratulations. Your business has a much higher chance of success than many of the other businesses trying to make it.You will need a strong Purpose to get you through the many difficulties of building a business.

Craig and Snook shared an interesting finding in an article “ From Impact to purpose”explaining: “Business experts make the case that purpose is a key to exceptional performance, while psychologists describe it as the pathway to greater well-being. So a strong Purpose has business and psychological advantages.

Doctors have even found that people with purpose in their lives are less prone to disease. Purpose is increasingly being put forth as the key to navigating the complex, volatile, ambiguous world we face today, where strategy is ever changing and few decisions are obviously right or wrong.” Purpose keeps you grounded and moving in the right direction.

As the designer of your new business, you can do anything you want to do. Designing a Purpose that energizes you can be your first step. This can also be your first step to building legacy.

More on Purpose, Values and Vision in: “20 Directives for Small Business Success: Do or Die”

Supporting information easily available at: https://goo.gl/NkDvWz

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Episode #7 Integrity as a Business Value

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You, as founder, are responsible for designing, modeling and promoting the Culture that will be most supportive of your Mission/Purpose. The Culture is made up of the Values or principles that are most appropriate for reaching your Vision. You are responsible for making these core Values become habits in your organization. We look at the advantages of adopting Integrity as one of your core business Values and believe that better control of your organization is one essential advantage. It’s also easier to solicit and keep your customers and employees with Integrity as a core Value. You will see how integrity leads to higher degrees of trust and motivation all around. It’s worth considering. Should Integrity be at the top of your list of business Values?

Resources:

Craig Cincotta” The 8 Values Every Company Should Live By

“The Difference Between Ethics and Integrity” Shane of Zoomstart.com

“Seven Principles of Business Integrity” by IntegritySolutions

 

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Podcast #6 The Elegance of Simplicity in Business Building

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Simplicity as a business value or principle is presented as a “Super” value. A value used by some of the most profitable businesses. Simplicity as a value, will help you build a strong and sustainable business because you’ll eliminate everything you really don’t need by developing the habit of making things simple. This is another secret of some of the most successful 21st century enterprises.

Resources:

“Simplicity in Business: To Be Simple is to Be Focused” Victoria Vessella

Chris Zook Bain and Company

“Simplicity-Minded Management” Ron Ashkenas

 

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Podcast #5 Values and Culture con’t

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8 “super” values identified in episode #4 are explored. I apply these Values to 3 extraordinary and legendary businesses. This helps in the understanding of how to apply great values and the importance of the results your business will see as you apply them.

Resources:

Craig Cincotta 

Zappos Core Values

The Birkenstock Shoe Company

 

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Podcast #4 Values and Business Culture

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Design an enjoyable workplace with the tips shared. It may seem impossible, but it is possible to build a productive and enjoyable workplace. I explore the results of current research concerning the best places to work and clearly describe the elements used to build these excellent workplaces. This is first of a two part podcast.

Resources:

Craig Cincotta “The 8 Values Every Company Should Live By”

Derek Irvine “The Best Company Cultures are Neither “Work’ nor “Human” but Both”

 

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Podcast #3 The Purpose Driven Business Con’t

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Embedded Purpose/Mission is explored more deeply.

  • Story of my business and lack of embedded purpose
  • Companies with embedded Missions.Purposes
  • 3 ways a strong Mission/Purpose can build a strong, sustainable and replicable business
  • Steps you can take to establish a strong Mission/Purpose

Resources:

Birkenstock Shoe Company

Delta Airlines

Amazon

20 Directives for Small Business Success: Do or Die

 

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Podcast #2 The Purpose Driven Business

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A strong business purpose can lead to phenomenal business results. So the importance of an inspired Mission/Purpose and the need to be driven by it is one of the first things I want to emphasize in my efforts to help you build a successful business. I like to study legacy businesses so. I’m going to tell a story about one of the best examples of a legacy businesses and their Mission that I’ve found.

  • Example of an embedded Mission/Purpose
  • Questions to test your Mission/Purpose
  • How to solidify your Mission/Purpose

Resources:

Birkenstock Shoe Company

 Craig and Snook “For Impact to Purpose” Harvard Business Review

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Podcast #1 Professional vs Business Builder

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The differences between the professional and the business builder is explored. This message is built around the belief in the “E-Myth” as described by Michael Gerber. It is the mistaken belief that most businesses are started by “technicians with tangible business skills”. However, Gerber clearly explained that most businesses are started by people with no tangible business skills and consequently, they fail. After more than 25 years his message is still not believed. In this podcast I will contrast the mindsets of the professional and the business builder and highlight the mindset needed to build a great business.

  • 7 characteristics of the mindset of the technical or professional business owner
  • 7 characteristics of the mindset of the business builder.
  • Advantages of the business builder mindset

“The E-Myth Principle is Still Alive and Flourishing” Martin Zwilling, Forbes

 

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4 Top Characteristics of Super Successful Entrepreneurships

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With so much information available to us, there’s no reason we can’t be well informed about business building. A large percent of new businesses fail because the entrepreneur are not aware of the skills they need to keep the enterprise afloat.

Most entrepreneurs have excellent skills in their profession and have enjoyed various levels of success. They have managed to schedule, prepare and provide their service or product in a way that has convinced them that starting a full fledged business is a great idea. However, the SBA reports that more than two-thirds of the 29 million startups fail each year. Something is seriously missing. Rather than looking at why these businesses fail, this article explores the reasons businesses succeed.

Jan B. King in “Top 10 Reasons Businesses Succeed” reported ten eye-opening reasons some businesses avoid becoming a fail statistic.

The first and most fundamental reason is ”The experience and skills of the top managers [owners] . Over half of business failures are directly related to managerial incompetence.”

We see the use of the term ‘management’, in thousands of articles and books. It actually means many different things according to whoever is using it. I like to refer to scientific or researched based findings for a definition of management. Frederick W. Taylor, in his works on scientific management offers the best definition of management as a science or set of skills.
“Scientific management [set of skills ] is a theory of management that analyzes and synthesizes workflows. Its main objective is improving economic efficiency, especially labor productivity.” Wikipedia
Considering Taylor’s conclusions, we can describe management as the responsibility for designing and executing a strategy with clear objectives, targets and deadlines. You also have the responsibility to design methods (systems), set standards, guide the performance of workers, and measure results. In addition, management includes hiring, training and promoting workers.  You will train and coach the appropriate employees required to successfully meet the objectives as described in the strategy. In other words, management is the organization and coordination of the activities of a business in order to achieve defined objectives. You will apply change management skills as you find the need for making the various types of changes to your established strategy and systems. People skills, such as communication and conflict management skills fall under the umbrella of scientific or skill based management. Management skills have been the focus of years of management research. Today we have time-tested and universal management skills available to managers because of this rigorous research. Of course, there will always be improvements in the discipline but basic business management skills will stay relatively the same. The best managers will continuously learn and improve their management skills.

 

A second reason new businesses succeed according to King is “The energy, persistence and resourcefulness (the will to make the business succeed) of the top managers.
Many business owners have failed or come close several times before their “instant” success. Don’t give up.”

This highlights the reason persistence and determination show up in all the results of business success studies.
A Purpose or Mission that you are passionate about will bring out the persistence and determination you need to get through the many problems you face as you grow your new business.

Md.Ashiqur Ran reported that “Albert Ellis was an American psychologist. Ellis said, ‘the art of love is largely the art of persistence’. Really, if you want to build something firstly you need to love it then love to do it again and again and it is the power of persistence. Persistence helps to conquer something invincible. ….The habit of persistence is the habit of success. Failure reminds us to be more persistent! It’s nothing.”

 

A third reason businesses succeed according to King: “A product that is at least a cut above the competition and service that doesn’t get in the way of people buying. There must be a compelling reason to buy; the product is great, the people love to provide service, and the buying experience is easy and fun.”

This reason implies the business has great Values or principles, excellent operating Systems, talented workers and customer empathy. The business enjoys values such as innovation, excellence, integrity, fun, and customer rapport. Successful businesses have also designed their Systems or operations and documented them to enable consistent application by all workers.

The workers share a belief in the Values and understand the significance of the customers

Probably the most important difference is the successful businesses have chose a product or service that is different or better than what has been available to their customers. They have found an innovative or creative way to be different and they continue to create and innovate.


King’s fourth reason businesses succeed: “The ability to create a “buzz” around the product with aggressive and strategic marketing. Make scarce marketing resources count. Do as much homework about your customers and their choices as you can before investing your marketing dollars.” There are many ways to market your business on a shoestring. The internet offers tremendous opportunities.Social media through blog posts is extremely popular and beneficial as well as you tube and podcasts. Many marketing tools are possible with a little research. Giving something away , personal appearances offering coupons and networking are just a few of the many ways you can market your new business. Uses as many as you can.

 

 These are four primary reasons businesses succeed. If you have mastered these four steps, the rest is fairly easy. See King’s article for the rest to avoid being in the “fail’ statistic.

See more “success” ideas in: “20 Directives for Small Business Success: Do or Die”

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A Time-Tested Guide to Problem Solving For Business Building

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If you are building a business you must get comfortable with the reality that you will always have problems to solve. Problem solving will be your essential responsibility as you establish and fortify your business because problems are naturally inherent when building a business.

The fast pace of environmental and industry changes leads to new problems continuously. Working with people, because of our various perspectives, leads to more problems. The changing nature and realities of our customers also lead to problems. There’s no way we can escape the need to efficiently and effectively solve these problems.

“I’ve often contended that the best leaders are the best problem solvers. They have the patience to step back and see the problem at-hand through broadened observation; circular vision. They see around, beneath and beyond the problem itself. They see well-beyond the obvious. The most effective leaders approach problems through a lens of opportunity” Glenn Llopis

Problem solving skills help you understand your business more and give you a deeper and deeper knowledge of your industry. This approach helps to establish you as an expert in your industry and these skills will help to keep you focused and calm in the face of difficulties. They will add to your self confidence and impress your workers and affiliates with your sense of control and courage.

Every expert on problem solving suggests carefully defining the problem first. This step will keep you to the task of solving the correct problem. Asking “why” is appropriate in any problem solving situation. So, asking “what” the problem is and “why” it exists will often lead to to the correct solution up front.

Beyond the simple solution, three types of problems have been identified and fall into the category of “difficult problems”. universalclass.com has provided these examples of “difficult problems” a business owner may encounter.

Intransparency– This occurs when the full nature of the problem is unclear. This might happen when some element of the industry that you are not familiar with is involved. Such as being required to provide a service in your industry that you haven’t provided in the past.
Polytely (many goals) – Here many goals must be met by the resulting solution. Such as implementing an innovation that integrates systems, matches the skills of the workers and pleases your customers.
Dynamics- This refers to a problem with time constraints. Such as the need to make a decision quickly.

If you’ve created a culture of openness and trust for your business, problem solving and frankly, all business operational matters will be easier to manage. Your workers won’t fear reprise or judgement. They will know that unusual or unpopular solutions are welcomed for review.

Your attitude about the problem will likewise influence the quality of your decisions. Affiliates will notice your calmness in the face of challenges and your resolve to make an efficient and effective decision. Each time you solve a problem in your business you will get better at doing it. Often you can look to past problem solving experiences to solve the current problem.

“A leader must never view a problem as a distraction, but rather as a strategic enabler for continuous improvement and opportunities previously unseen.” Glenn Llopis

The most widely accepted problem solving process is the Polya Problem Solving Method. George Polya was a Hungarian who immigrated to the United States in 1940. The major contribution is his work in problem solving. In 1945 he published the book “How to Solve It” which quickly became his most prized publication. It sold over one million copies and has been translated into 17 languages. He is known as “the father of problem solving”.

Polya contributed 4 principles to the discipline of problem solving. See A. Motter for a complete description of the principles.

Principle #1 Get a complete understanding of the problem. In other words, know exactly ‘what’ the problem is and ‘why’ it exists. Polya highlights the need to understand the ‘language’ of the problem and the ability to put it in your own words. He also suggests drawing a picture or diagram of the problem to help with understanding what’s going on.

Principle #2 Develop a Plan. Polya revealed that there are many reasonable ways to solve a problem. He advises to choose an appropriate strategy when solving your problems.
Some of his suggested strategies are:
Guess and check
Eliminate possibilities
Look for a pattern
Draw a picture
Solve a simpler problem
Work backward

Principle #3 Devise and carry out a plan.  Design a plan around your strategy. Basically, he suggests you must use patience and persistence when planning and implementing your strategy and of course, if it doesn’t work, they something else. He reminds us that this is how mathematicians do it. They keep trying until something works.

Principle #4 Look back. Polya suggests that you can learn a lot by reviewing your process and results. Ask what worked and what didn’t. This allows you to evaluate your strategy and be better prepared to solve future problems.

It’s not too difficult to keep these guides in mind when solving your problems particularly when you know these guides are followed by the best problem solvers. Define ‘what’ the problem is and ‘why’ it is a problem, then apply Polya’s guide to enhance the growth of your business.

More business growth guidance: “20 Directives for Small Business Success: Do or Die”

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