A Purpose-Driven Company Is the Secret Recipe of a Successful Business

In my previous blog, I wrote about how I don't expect employees to share the founder's personal dream. Everyone who joins a company comes with their own life, responsibilities and ambitions. A founder may want to build a thousand-crore company, while someone in the team may be working towards buying a house for their parents. Someone else may be saving for their child's education or simply trying to become financially secure.

I don't think there is anything wrong with that. In fact, I think founders should accept it instead of expecting everyone in the company to care about the founder's dream as much as the founder does.

But then there is an obvious question. If everyone has different personal dreams, what keeps all these people moving in the same direction when they come to work?

For me, that is where purpose comes in.

A company can have ten people or ten thousand people, and all of them can want different things from their lives. But while they are working together, there should be something common that helps them understand why the company exists and what all of them are ultimately trying to achieve.

I think companies often make this more complicated than it needs to be. We create vision statements, mission statements and values. They go on the website, in presentations and sometimes on office walls. They usually sound good, but if you ask ten people in the company what those statements actually mean in their day-to-day work, you may get ten different answers.

For me, purpose should be much simpler than that. It should help people understand why all of us are here and what we are trying to do for the people we serve.

Take a very simple example. Suppose a company says, "We want every interaction with a customer to end on a positive note and, whenever possible, with a genuine thank you from the customer."

It is not a fancy statement, but almost anyone in the organisation can understand what it means. A salesperson can relate to it. Someone in customer support can relate to it. A designer can understand it. A software developer who may never speak directly to a customer can still ask whether the work he is doing is helping the company move towards that outcome.

That is when purpose starts becoming useful. It is no longer just something written somewhere. It starts giving people some context about how they should think about their work.

Let's say Raj is a software developer. On a normal day, Raj may receive a requirement, understand the task, write the code, test it and move on. If the feature works and the requirement has been completed, technically he has done his job.

But now imagine Raj understands that the company is trying to make sure customers have a good experience with the organisation. He may start looking at the same requirement a little differently. While writing the code, he may ask whether this is actually solving the customer's problem. If he sees something in the requirement that could create a problem later, he may raise it instead of simply saying, "I built exactly what was asked."

His job has not changed. He is still a software developer and he still needs to write good code. The only difference is that he now understands where that code finally connects to the customer.

I think this matters because people cannot go to their manager for every small decision they make during the day. At some point, they have to use their own judgement. If the purpose is clear, it can help them make some of those decisions without needing someone senior to tell them what to do every time.

The same thing can happen with someone like Pooja, who is a junior graphic designer.

Suppose Pooja is working on a billboard for a real estate project that is launching next month. She may never have met the client. She probably wasn't part of the strategy discussions. Someone may simply send her a brief and ask her to create the artwork.

She can follow the brief, finish the design and send the file. From a job-description point of view, she has done what was expected.

But if Pooja understands what the company is trying to achieve for its clients, she may approach the same task a little differently. Before starting the design, she may speak to someone who has been working closely with the client and ask what is most important about the project. She may ask what the client liked or disliked in the earlier work, whether anything has been specifically promised and whether there is something she should be careful about.

She may also try to get the first version closer to the client's expectation instead of creating something quickly and then going through five rounds of unnecessary corrections. She may finish it early enough for the internal team to review it properly.

None of this means Pooja has suddenly started treating the company like it is her own business. She still has her own life, her own career plans and her own reasons for working there. But while she is working, she understands the larger outcome her work is contributing to.

Raj is writing code and Pooja is making designs. Their jobs have almost nothing in common, but the purpose guiding the way they think can still be the same.

This is also why I feel different departments can have different goals, but they should not have different purposes.

Sales may be responsible for revenue. Marketing may be measured on leads. Technology may be responsible for building a stable product. Customer support may have response-time targets, and finance may need to control costs. All of these things are important, but to me these are goals, responsibilities or metrics. They are not the purpose of the company.

There has to be something above all of this that belongs to everyone.

If the common purpose is to give customers a positive experience, then each department can still apply that idea in its own way. Marketing can ask whether it is attracting the right kind of customer instead of only trying to increase lead numbers. Sales can ask whether it is setting the right expectations instead of promising whatever is needed to close the deal. Technology can ask whether the product is genuinely solving the customer's problem. Support can ask whether the problem has actually been solved instead of only looking at whether the ticket was closed.

Even finance, while trying to reduce costs, can ask whether a particular saving is going to damage something that is important to the customer experience.

Of course every department will still have different targets. They have different jobs, so that is natural. But the larger reason behind those jobs should remain common.

Otherwise, what slowly happens is that every department begins operating like its own small company. Sales starts chasing one thing, marketing another, technology another and finance something else. Everyone may be busy and everyone may be hitting their own numbers, but the organisation as a whole can still start moving in different directions.

This is why I feel a company needs one purpose that can be understood by the CEO as well as the most junior person in the team.

That does not mean they will make the same decisions. Of course they won't. The CEO has a completely different responsibility from a junior designer. A salesperson will be measured differently from a software developer. Finance will look at completely different numbers from marketing.

But when each of them has to choose between two ways of doing something, the final reason behind the decision should come from the same place.

For example, Raj may find a shortcut while developing a feature. It saves him time, and his manager may never even know that he took the shortcut, but Raj knows that it could create a bad experience for the customer later. That is the kind of situation where purpose should help him decide what to do.

Pooja may finish a design that technically follows the brief, but something about it doesn't feel right to her. She can send it and say that she followed the instructions, or she can ask one more question before sending it.

A salesperson may realise that the customer is expecting something the company cannot really deliver. He can still close the deal and let someone else deal with the problem later, or he can have an uncomfortable conversation with the customer before taking the order.

These kinds of decisions happen all the time. Most of them are too small for a founder or manager to even know about. That is why I think purpose becomes useful when it is simple enough for people to use in everyday decisions.

And this is also where the founder's role becomes important.

I don't think the purpose of a company should be treated like a branding exercise where somebody is asked to come up with a nice sentence for the website. The founder has to spend time thinking about why the company really exists beyond making money.

What should become better for a customer because this company exists? What should someone consistently feel when they deal with the organisation? If the company becomes ten times bigger, what should still remain true?

And once you arrive at an answer, another good test is whether the most junior person in the company can understand it.

If only the leadership team can explain the purpose, then it is probably too complicated.

The harder part comes after defining it. The company then has to actually operate according to it.

If you say customer experience is the purpose but reward salespeople only for closing more deals, even when some of those deals create unhappy customers later, the team will very quickly understand what really matters. They will follow the incentive, not the statement written on the wall.

The same thing applies to hiring, training, promotions, reviews and difficult people decisions. If the purpose is really important, it should show up in the way the company works, not only in the way the company talks about itself.

That is why I feel founders have to live the purpose themselves. Employees notice what the leadership does much more than what leadership says.

So this is how I have started thinking about companies. You may have a hundred employees and all hundred may have completely different dreams. That is fine. Raj may want to buy that scooter for his father. Pooja may be working towards something completely different. The founder may still be dreaming about building a very large company.

There is no need to make all of those dreams the same.

But when everyone comes together to work, there should be one common understanding of what the organisation is trying to achieve. The CEO should understand it, the salesperson should understand it, Raj should understand it, Pooja should understand it, and the person who joined last week should also be able to understand it.

Everyone can have different jobs, targets, responsibilities and personal ambitions. What should remain common is the reason behind the work they are doing together.

For me, that clarity makes a big difference. People don't only know what they are supposed to do. They also have some understanding of why they are doing it, and that helps them make better decisions when nobody is standing next to them telling them what to do.

I think that is one of the things that makes a purpose-driven company stronger, and in the long run, a better business.