A strong story behind a business’s inception can have a powerful effect on customers. Customers may identify with a founder’s back story or values, which can help grow the customer base. A compelling story can also help create a cohesive workplace culture, binding employees together with a shared vision.
However when customers purchase a product, they are not actively seeking out the product with the best inception story. Also not all employees will have the same experiences and values, so it can be difficult ascribing one all-encompassing purpose to an organisation.
This week we ask, does the ‘why’ behind a business really matter?
Rachel Yang, Investment Manager, Giant Leap Fund
It’s not easy founding and growing a company, but we believe that if you are committed to the mission of the business, you are more likely to overcome any challenges you face. We’ve learned more about this from Driven — one of our portfolio companies — who specialise in resilience; the ability to advance despite adversity. Based on Driven’s research, purpose is the most important factor in defining your level of resilience which is why it is a key consideration in assessing investment opportunities.
We’ve also noticed that founders that approach us with a personal connection to the problem they are solving tend to be more compelling. They better understand their market and are less likely to deviate from solving that problem as the company grows.
Finally, consumers are increasingly voting with their wallets and gravitating towards companies who are loud and proud about their mission. We are starting to see evidence of this trend through a growing number of impact companies — or those solving a key societal or environmental problem — outperforming their industry peers.
Evan Cunningham-Dunlop, CEO & Founder, Living Online
Yes, the ‘Why’ matters but it must be an intrinsic why. If running a business allows you to do what you love and your ‘Why’ is the joy you get when looking after your team and customers, you’re on the right track. In recent years we’ve seen a rise in businesses championing a social cause and that is admirable, but this extrinsic ‘Why’ can create challenges. There are far too many companies that try to project a certain image to the outside world without really focusing on what’s going on internally. Big ideas and the reasons behind them are fantastic, but let’s not forget to also be good to the employees and the people in your immediate world who you see everyday.
For me, the ‘Why’ comes down to running a business that commits to fostering a culture where people feel valued, inspired and challenged to constantly be the best version of themselves.
Eva Barrett, CCO, Kathmandu
Successful brands and brand guardians will tell you that its essential to understand the reasons ‘why’ a company or service exists. The early identification of these pillars forms a value set for a business – building a solid foundation from which a brand relates to its consumer, ultimately contributing to its ongoing success.
At Kathmandu, we have heritage values that we have upheld, and grown alongside, since 1987. Responsible travel and adventure is at the heart of everything we do. It guides all our decisions from sustainable product development to how we engage ethical partners within our supply chain.
It’s important that your brand consistently reinforces its ‘why’ to the consumer. For Kathmandu, beyond our product, we do this with our B-Corp certification and annual sustainability report. A brand that demonstrates transparency and meaning beyond its commercial proposition has the opportunity to build trust and brand loyalty, connections which cannot be underestimated.
Dion Appel, CCO, Openpay
Establishing a clear ‘why’ behind a business and making sure this is aligned across all parts of the business is critical. It allows everyone in the company to understand why they do what they do and creates a strong purpose for your brand and business approach. In other words, the why is at the very core of how you do, what you do.
At Openpay, our ‘why’ really relates to empowering people with a smarter way to manage their cash flow. This enables us to centralise all business decisions with laser beam focus on supporting this purpose. Whether we are developing a new product, standing up a new vertical or identifying new partnerships, everyone in the team understands why we exist and how we deliver solutions that meet our customers’ needs.
This approach has been integral to accelerating Openpay’s growth. We are now well entrenched in our burgeoning industry which is directly aiding our global expansion. In an increasingly crowded global space, our ‘why’ allows us to differentiate and deliver on what customers want.
Steve Grossrieder, CEO, JAX Tyres & Auto
Businesses that have their ‘why’ clearly shared across the company have an advantage: they know where to focus their energy.
At JAX Tyres & Auto, our ‘why’ – giving Australian drivers peace of mind – is more than a brand purpose or a tagline. It is the reason we exist.
I’m proud that every day our teams and franchisees are committed to finding solutions that put customers first. From relaunching our e-commerce platform, to being incredibly agile when implementing safety procedures in-store and supporting communities impacted by COVID-19, like healthcare workers and job seekers, applying this lens to what we do helps to facilitate business success.
It also maintains our commitment to creating customer-centric products. Highlighting peace of mind through JAX Vehicle Inspections, a visual inspection conducted by certified mechanical teams to identify upcoming maintenance required, helped to strengthen our relationship with customers and eased their concerns about tyre and vehicle safety.
Karen Porter, Founder & Head of Community, Underground Communications
The ‘why’ behind a business plays a pivotal role in the success across absolutely every area of business. But, as a purpose-led business that has publicly declared our why through B Corp certification, I would say that!
Having clarity of, and more importantly, communicating your purpose in business is a differentiator that allows you to connect with your ideal customers without having to resort to tricks and tactics such as discounting to ‘win’ them over. When you can show why you exist and what you believe in, you are able to develop a level of trust based on values. You still need to deliver quality products and services but by establishing a relationship with your customers based on beliefs, your client base is much more likely to stay loyal. And studies continue to show that consumers are willing to pay more for a product that is ethically sourced/produced, has a positive effect on the environment and provides a good social outcome.
And, from an employee perspective, communicating your why helps to attract and retain the right talent to your business. It gives meaning to what your employees do and allows them to feel like they are contributing to something bigger than themselves.
Blaise Porter, Director of Responsible Business, Fujitsu Australia
The future is uncertain. Businesses that can clearly articulate “why” they contribute to society have a guide that can help them navigate to long-term success in a world challenged by rapid digitisation, social inequality, and a changing climate. Having a unifying purpose tells everyone what’s important to the organisation and invites collaboration from customers, stakeholders and employees who share that vision, so that the organisation can move forward much more strategically, and improve transformation and innovation.
Fujitsu’s vision is of a human-centric intelligent society where organisations leverage digital technologies to support sustainable business growth and provide greater value to society.
It’s not just about having a purpose, it’s about living it to build credibility, engagement, and trust; because everyone’s pulling together towards that guiding star. Without that common purpose, organisations won’t be able to navigate disruption. Organisations that can define and activate their positive purpose will deliver long-term success.
Kate Save, CEO and Co-founder, Be Fit Food
A business’ ‘why’ is vitally important for a number of reasons. First and foremost, it is the business’ reason for existing, and as an entrepreneur or business leader, it’s the reason you do what you do. Your ‘why’ is the driving force behind your business and something that will influence not only every decision you make as a leader, but also the integrity of your product, the suppliers you engage, the staff you employ, and arguably most importantly, your relationship with your key audience.
For us, our ‘why’ at Be Fit Food is to revolutionise the way Australians think about food and instil the philosophy that food is the first medicine. We exist to empower Australians to achieve optimal health through a balanced diet. This ‘why’ underpins everything we do as a business and keeps us grounded through all of the highs and lows of the business journey.
When businesses are unclear on their ‘why’, they will inevitably lack direction and focus – and in times of uncertainty and change, this can lead to instability. Understanding your business’ reason for being is critical to ensure you’re able to navigate challenging times while remaining true to your business’ purpose.
Jimmy Mullany, Cofounder and Director, Balfour Homes
The ‘why’ of a business definitely matters, it’s the driver behind every decision I make. Having a clear ‘why’ gives me a path for what I need to achieve, and it’s something I lean on in times of uncertainty or when making big decisions. From a consumer perspective, it has become a key purchase consideration too. A business with a clear purpose is able to connect with consumers on a different level, demonstrate an understanding of their wants, values, needs, as well as the needs of its external environment and the problems the business is solving. If you’re not connecting to your ‘why’ as a business you’re not putting your customers at the core of it.
Vijay Sundaram, CSO, Zoho
In a world where competition is high and organisations have to fight to stand out and build an affinity with customers, employees and stakeholders alike, the ‘why’ behind a business is just as important as the ‘what’. Whether it’s a retailer that only uses ethically sourced materials or a technology platform that doesn’t sell it’s users’ private data, effectively communicating a brand’s mission and values can help it elevate itself above its competitors and foster deeper connections with customers. While it’s important to communicate the ‘why’ to customers, it’s just as important to ensure your company has clear goals and values that employees believe in, too. At the end of the day, whether it’s customers or employees, if people feel passionate about what your business stands for, they’ll be more inclined to be a part of it.
Kristy Chong, CEO and Founder, Modibodi
After giving birth to my second child I began to experience bladder leaks, then when my periods returned I realised that the solutions available to me were limited, costly, uncomfortable, not to mention bad for the planet. So, I took matters into my own hands, designing, testing and patenting Australia’s first period and leak-proof undies, Modibodi.
Our purpose is to create limitless positive impact on people and our planet. Beyond selling leak-proof apparel that empower people’s lives, we are committed to being sustainable in all we do, helping to end period poverty and supporting health education programs that normalise or open conversations around our bodies and leaks. To date, we have already donated 25,000 pairs of underwear to women in times of crisis and women in need.
I believe the ‘purpose or why’ behind a brand absolutely matters, it can act as a guide to each business decision, and ensure you stay focused on your customers first and foremost.