And why should I buy your product? You have likely been asked that question by a potential customer, and your response probably related to the excellent qualities of your product, the positive business case in buying your product, the service you will provide subsequently, the security your unique company offers, etc.
But society is evolving. In the old days, we could compete on product features in sales and employment benefits, etc. in the recruitment process. Later on, we also had to compete on service, etc. in sales and development opportunities, etc. in the recruitment process. It was basically a contest to see who could present the best value proposition – and the best and cheapest won. Be it the order or the recruitment.
Thankfully, this is no longer the case. Today, all those competitive levers of yesterday are a given. Of course you have the coolest HR development process, and of course you provide amazing service. So why should I buy from you? And why should I work here instead of for your competitor (where they also have a great canteen)? Why?
The answer is a competitive parameter
To an increasing extent, the answer they are all looking for has to do with what you believe in as a company, the difficult choices you have made in this connection, and with the difference you want to make in our society. There has to be a meaning behind everything, and to many employees, the meaning is not simply to make good money (that is a premise). The customers are also increasingly looking to buy services and products from companies which they can see contribute to society and have a raison d’être which goes beyond providing a solid return on investment for shareholders.
Why is important for pride and morale. It is your raison d’être. Imagine sending our soldiers to war with the best equipment, best training and best management but without a clear answer to why they should be going into battle. That leaves us with a motivational problem and thus ultimately a performance problem. The why should be crystal clear and provide the motivation.
How do you come up with the good answer?
As you know, there are many ways to Rome. But if your vision is “We want to be preferred partner to our customers” or “We want to be the largest in the Nordic countries”, you are probably not on the right path. And if your strategic objective is merely “a ROI of 13.5%” or “turnover of DKK 347m in 2018”, there is still room for improvement. Targets and ambitions are great, and we all need something to measure ourselves against. But they do not give us an answer to why.
Many companies have achieved excellent results by working on their why, and they may act as inspiration. Grundfos under the management of Mads Nipper has clearly redefined their why to be about clean water for the globe (rather than excellent pumps for the globe). And Novo Nordisk has for many years worked on eliminating diabetes (instead of just treating it), and the company has thus been able justify their existence to employees and customers in a far broader framework than before. Yes, they make a lot of money. A lot. But they are also working within a very broad scope with initiatives which could potentially harm their own business. And that is why we have faith in the company, we respect it, we want to be part of it – and we accept that they make a serious amount of money selling us drugs, because they also provide cheap medicine for underdeveloped countries. Well done!
One major source of inspiration for “why” can be found in UN’s “Sustainable Development Goals”, which state areas critical to the long-term survival of our globe. Try to see how you could define your company with those goals in mind. But it has to real! It won’t work if you just regard it as a marketing gimmick. You have to believe in it. You actually have to be able to say (without a smirk) that the purpose of your company is to e.g. create “sustainable cities”, not just to “build houses in order to make money”. And you have to be able to demonstrate that your choice has consequences for how you run your company.
To leave footprints
But there are also many other ways to work with the “why”. In our consulting company, the vision is to leave footprints – to deliver so powerful changes to our clients that they create waves throughout entire sectors. We celebrate when we can see that our clients become frontrunners in their sectors, when the solutions we helped develop are copied, and when we see that our clients are able to create even stronger results than before – all for the benefit of their customers, citizens (when we are talking public organisations) and employees. It is basically about making a difference for the benefit of the society we are all part of. And yes, we also make some money in the process, which is a prerequisite for running a company, but it can never be the purpose.
So think about it:
- What do you celebrate in your company?
- Why should your next candidate choose to work for you?
- How will you continue to develop your differentiation parameters?
- What difference should your company make?
When you have defined your own “why”, you also have to show something for it – it cannot just be empty words. And you as the executive have to own this why – so strongly that you can argue for it with the strongest of convictions and so intensely that you sometimes make choices which are true to your “why”, even though your profit may suffer for it. If you can demonstrate this, people will want to join you. Both employees and customers.
Originally published in Børsen Ledelse.