The purpose of any business can be expressed as “maximize returns for the shareholders”. If your shareholders are happy, they continue to invest in your business.  If they are unhappy and believe they can get better returns elsewhere, they pull their money out and you may have a tough time implementing your strategic plans.  This is a true statement, even if you are a
solo-preneur or small business owner. You’re the shareholder!

If your business isn’t making money then your cash flows will suffer.  As cash for a business is like oxygen for the body, your business will die or be unhealthy if you don’t have sufficient cash flows.  This is a fundamental that you cannot ignore.

What’s deeper than “maximize returns”?

Unfortunately, many businesses fail to articulate their sense of purpose beyond “maximize returns for shareholders.”  I would argue that the deeper purpose of a business is what will allow it to thrive. Figure this out, communicate to your employees and other stakeholders,
and allow it to determine the guiding principles for your organization’s functioning and decision making and you will excel.  The financial benefit will become a natural byproduct of being on purpose.

What exactly do we mean by “purpose”?  Your purpose is your raison d’etre, or your reason for being.  Think of what will inspire you to act, not just because you can be profitable, but because it aligns with your higher purpose.

How would you answer the question about your purpose if you were to write a business plan today for your business (even if you’ve been in existence for decades)?  What would you
say that differentiates you from your competitors, motivates investors to fund your initiatives, and creates a long line of people who want to work on your team?

This would be a sufficiently narrow definition and identify who you are, who you serve, and how you serve them.   This will also guide your immediate actions as you want to be focused on your purpose and take actions that align with that purpose.

If high-performing individuals can, so can your business…

For individuals who understand their personal purpose, they make decisions and move forward in their lives with clarity, enthusiasm, and passion.  This is what is meant by living on purpose.  Their lives become easier. The same is true for organizations; that when your company (all employees) understands its purpose it can make decisions and move forward with clarity, enthusiasm, and passion. It is the job of the leadership team to ensure they are
aligned with the company’s purpose in everything they do.  When they can communicate with clarity and get the entire workforce and extended team excited about the company’s purpose,
the whole business will enjoy that same passion and enthusiasm that individuals who have a clear purpose enjoy.

Constancy of Purpose

Another key point to make is what Dr. W. Edwards Deming called Constancy of Purpose.  I had the opportunity to study under Dr. Deming during the 1990s, and observed him drilling this point into countless people during his famous 4-day Seminar for Managers and at his course at New York University’s Graduate Business School.  The point is to stay true to
your purpose, rather than lose focus.

Specifically, many companies fall victim to short-term financial performance at the expense of their purpose.  This may be one of the ills of Wall Street and the perceived need to manipulate results (often strong arm cost controls to make up for missed revenue projections).
I’ve heard quite a few of Dr. Deming’s rants about this.

Align with your purpose, and be confident about your results

Your purpose can act like a filter for your decision making.  If decisions you make align with
your purpose, then you’re on track.  If they are counter to your purpose, then perhaps it’s the wrong decision and you might reconsider.  In the end, as business leaders we need to manage many variables to ensure long-term success and might need small course adjustments along the way.  As long as we keep our company’s purpose in mind, we can feel confident that the results will follow.