Reality Check: A Purpose Is Tested When It Costs You Something

In my previous articles, I wrote about why I believe every organisation needs one common purpose and why the founder cannot completely hand over the responsibility of defining that purpose to someone else. But defining the purpose is still the easier part. The real test starts when following that purpose becomes uncomfortable for the business and there is actually something to lose.

It is easy for a company to say that customers matter, employees matter, quality matters or trust matters when everything is going well. As long as those beliefs are not affecting revenue, margins or targets, there is no real conflict. The difficulty starts when the company has to choose between what it says it believes in and an opportunity to make more money. That is when you begin to understand whether the purpose is actually influencing decisions or whether it is simply something the company likes to say.

Let me take the same example I used earlier. Suppose a company says that its purpose is to make sure every customer interaction ends on a positive note and, whenever possible, with a genuine thank you from the customer. Now imagine that the company is going through a difficult quarter and the sales team is under pressure to achieve its numbers. There is a large deal on the table which can make a big difference to the quarter.

During the discussion, the customer asks for something the company cannot properly deliver at the moment. The salesperson knows this, but he also knows that if he clearly explains the limitation, there is a good chance that the customer may not sign the deal. If the company genuinely cares about creating a good customer experience, then the salesperson should set the right expectation even if there is a possibility of losing the business.

When we look at this situation from the outside, the answer sounds quite obvious. Of course you should be honest with the customer. But it feels very different when the deal can decide whether the salesperson achieves his target or whether the company closes the quarter well. It is easy for leadership to say, "Don't overpromise," when business is coming in comfortably. The same belief becomes much harder to follow when the company badly needs the revenue. For me, this is exactly when purpose starts getting tested.

Now suppose the salesperson closes the deal anyway. He makes a commitment he knows will be difficult to deliver, the customer signs and the revenue comes in. The salesperson achieves his target and the company is happy because the deal has helped the numbers.

A few weeks later, the delivery team starts struggling because the commitment was unrealistic. The customer becomes frustrated, escalations begin and sales and delivery start blaming each other. Sales may say that the deal is already closed and delivery now has to manage. Delivery may say that sales should never have promised something which could not be delivered in the first place.

From the outside, this may look like a sales versus delivery problem, but I think the bigger issue is somewhere else. The organisation has said that customer experience is important, but it has rewarded behaviour that went against it. Employees notice this kind of contradiction very quickly. If leadership says that the customer comes first but celebrates every large deal irrespective of how it was sold, people will naturally understand that revenue actually comes first.

After some time, what is written on the office wall does not really matter. People usually repeat the behaviour that gets appreciated and rewarded. That is why founders have to be careful about what they celebrate inside the company. A large deal may look great in the monthly review, but if it was won by making commitments the organisation could not keep, celebrating it sends a completely different message to the team.

The same question can come up with customers themselves. Not every customer who brings good revenue is necessarily the right customer for the company. Sometimes a customer expects your team to work in a way that does not fit how you want the organisation to operate. Maybe every small thing requires an exception, maybe your people are regularly pushed into commitments they are uncomfortable with, or maybe the relationship starts affecting other customers and creating unnecessary pressure across the team.

Of course, I am not saying that businesses should walk away whenever a customer becomes difficult. Customers will have expectations and companies need to adjust. Sometimes you have to go beyond the normal process for an important relationship. But there is still a point where the founder has to ask whether the revenue is worth what the organisation is becoming in order to earn it.

That question becomes much harder when the customer is profitable. If the customer is small and difficult, saying no may not be that difficult. But if the same customer is contributing a significant part of your revenue, suddenly the decision feels very different. This is where the beliefs of the company get tested because there is a real financial consequence attached to the decision.

I think the same thing can happen during cost cutting. Suppose the company is under pressure to improve margins and someone identifies an area where costs can be reduced. On paper, it looks like a good decision. Expenses go down and profitability improves, but the founder also knows that the saving will probably affect the customer experience. Response times may become slower, service quality may drop or something the customer has become used to may no longer be available.

I am not saying that companies should keep spending money simply in the name of purpose. Every business has to remain financially healthy. Waste has to be removed, teams need to become more efficient and sometimes difficult cost decisions are necessary. But there is a difference between improving efficiency and quietly reducing something the customer was promised because it makes the numbers look better.

This is where I think purpose should help the founder think through the decision. If a certain customer experience is genuinely important to the company, then it should at least make leadership think carefully before compromising it because of short-term financial pressure. That does not mean ignoring the economics of the business. It simply means that purpose becomes one of the things considered while making commercial decisions.

I think this is where the difference between a company with a real purpose and a company with only a purpose statement starts becoming visible. When business is going well, both can look very similar. Both may talk about customers, people, quality and trust, and both may have the right words on their website.

The difference starts appearing when the business is under pressure. A founder may have to decide whether to keep a promise even if it affects profit. A salesperson may have to be honest even if it costs him a deal. Leadership may have to decide whether a cost saving is worth damaging something customers value. There may also be situations where treating an employee fairly creates some additional cost for the business. These are the kinds of decisions that show people what the company really believes in.

This is also why I feel the founder's own behaviour matters so much. Employees will eventually face situations where there is no perfect answer. They may have to choose between hitting a target and doing what is right for the customer, between speed and quality, or between saving some money and protecting an experience. When that happens, they will naturally look at how leadership has handled similar situations in the past.

If employees have repeatedly seen the founder compromise whenever the numbers become uncomfortable, they will learn to do the same. But if they have seen the founder take a reasonable short-term hit to protect something the company genuinely believes in, then they understand that the purpose is not only something being discussed in meetings. Sometimes one difficult decision by the founder can communicate much more clearly than repeatedly talking about company values.

The same applies when a company says employees matter. That belief is not really tested when business is going well and there is enough money. It is tested when the business is under pressure and leadership has to make difficult decisions involving people. Employees observe what happens in those situations and form their own understanding of what the company actually values.

At the same time, I think there is an important balance here. Purpose should not become an excuse for poor business decisions. A company still has to make money. Revenue, profit, cash flow and efficiency all matter because if the business itself is not healthy, eventually there will be no organisation left to follow any purpose.

So I don't see this as purpose on one side and business on the other. The real challenge is to build a business where the way you make money does not regularly fight with the reason you say the company exists. Sometimes that may mean saying no to a deal because you know you cannot deliver what is being asked. Sometimes it may mean spending slightly more because you want to protect an experience customers value. In many cases, the better answer may be to improve the process so that you can protect both the customer experience and the economics of the business.

One way founders can understand whether the purpose of the organisation is actually real is by looking back at the difficult decisions they have made over the last few years. Think about the periods when money was tight or when a large opportunity was available. What did you choose to protect in those situations?

Maybe there was a time when a customer was ready to pay, but you still refused to make a promise because you knew you could not deliver it properly. Maybe you stopped a certain behaviour even though it was producing good numbers. Maybe you walked away from a customer because the relationship was taking the organisation in a direction you did not like. Or maybe you continued spending on something because you genuinely believed removing it would damage an experience that mattered.

I think these decisions tell you much more about what the company stands for than the purpose statement on the website. Purpose is not only about what you want to achieve. It is also visible in the things you repeatedly choose not to compromise while trying to achieve it.

That is why I believe purpose gets tested when there is actually something at stake. When money is on the table, when the quarterly number matters and when saying no feels uncomfortable, the founder has to decide whether the purpose still matters enough to influence the decision. If it does, people inside the organisation notice.

Over time, employees start understanding what the company really stands for because they have seen it reflected in actual decisions. They do not need someone to keep repeating the purpose in meetings. When they face difficult situations of their own, they already have some understanding of what matters to the organisation and how the company normally thinks.

For me, this is how purpose slowly moves beyond being something only the founder believes in. It starts becoming part of the way people across the organisation make decisions. And when that same thinking starts appearing even when the founder is not involved, that is where purpose slowly starts becoming culture.