The key to unlocking the growth potential of your business

When Ranjay Gulati, professor of business administration at Harvard Business School, started work on his latest book, he originally planned to call her Goal. But he soon realized he needed a new working title: During his research and writing process, he discovered that many companies like to talk about purpose, but few confirm with their actions. For the few successful companies that followed suit, “it wasn’t just a statement of intent. It was a way of being. It was something that guided everything they did,” says Gulati.

This is an important distinction, and it explains why Gulati eventually titled the book, Deep purpose. During the virtual Purpose Power Summit of Inc. On Tuesday, Scott Goodson, founder and CEO of StrawberryFrog, spoke with Gulati about the idea behind his new book.

In its most basic form, Gulati says, a business purpose is a general intention about how you want to be in the world. A deeper, more thoughtful purpose helps leaders set and achieve goals, not to mention have a long-term vision. In other words, purpose is key to unlocking your business growth.

But how? For Gulati, the answer is multiple.

1. Your employees are more motivated.

A deep purpose will help you attract and keep employees aligned with your company’s mission, and it will make them more productive. According to a 2015 Harvard Business Review study, inspired workers are twice as productive as satisfied workers. “When they [employees] connect their purpose to the business purpose, you get a different type of person showing up,” says Gulati.

2. Your customers feel a greater connection to your brand.

More than ever, customers care about companies with a purpose. They want their purchases to support brands that play a positive role in the communities in which they operate. The more you can connect with customers at the goal level, the more trust and loyalty you build.

3. Your business is moving from transactional to relational.

Partnerships, suppliers, customers, employees: running a business today involves many moving parts and many relationships. Think of it as your business ecosystem. Gulati says having a deep purpose creates stronger relationships, which in turn strengthen your ecosystem. He says this transition will look like a “change of a company from an economic vision of a bond of contracts”, where everyone seeks their piece of the cake, to a “bond of commitments”, where everyone works towards this deep goal.

4. You will always have true north to guide your next moves.

Gulati says: “The goal is a compass.” The ups and downs of running a business can be brutal, but a deep purpose will keep you on track no matter what challenges you face.

Finally, says Gulati, for leaders, a well-developed purpose helps them to be more than just operators – they become inspirers. And that goes for not only inspiring employees in their day-to-day tasks, but also inspiring them to work towards their own deeper purpose. This is how leaders cultivate and grow their teams while building a goal-driven business from the ground up. Borrowing from Stanford University professor emeritus James G. March, Gulati argues that the world needs “leaders who are both plumbers and poets.”