Growing profits through purpose

July 19, 2019

David Baggaley, tax director for EY in Newcastle, considers how positive purpose is increasingly a vital ingredient for business success

At EY, we have been learning from, working with and supporting some of the North East’s, and indeed the UK’s, fastest-growing entrepreneurs and middle-market companies through our EY Entrepreneur Of The Year award programme for more than 20 years.

I’m proud to say that Fokhrul Islam, the chief executive of Northern Gas and Power (NGP), based in Gateshead, won the Rising Star category at EY’s North of England Entrepreneur Of The Year Awards last month.

Northern Gas and Power is a business-to- business energy consultancy offering energy contract brokering, consultancy and energy monitoring technology in the UK, US, France, Malta and Singapore. It aims to help businesses cut energy bills, consumption and carbon emissions.

In just six years, Fokhrul has grown NGP from a one-person start-up to a global company employing more than 300 people. This is a business with clear purpose, rightly placing a great deal of value on recognising the team, making them feel part of the success, and with a huge focus on a work-life balance.

Since the financial crisis in 2008, trust in big business has been on the decline and this has opened opportunities for newer brands to make a positive difference and grow market share, even in what can seemingly be mature and saturated markets.

Indeed, companies seeking to navigate disruption are finding that purpose can serve as a guiding light through uncertainty.

Research reveals that purpose-driven businesses are better at attracting and retaining talent, sparking innovation, navigating disruption, and yes, making a profit.

According to EY’s 2017 report, How can purpose reveal a path through disruption? companies that embed a human-centric definition of purpose create value. This was based on a survey of 1470 global leaders, representing companies across various industries in developed and emerging markets.

Of the companies surveyed that have a human- centric definition of purpose, 52 per cent say that it helps build customer loyalty; 51 per cent report that it preserves brand value and reputation; and 42 per cent cite that it helps them attract and retain staff. In addition, 40 per cent attribute the ability to develop new and innovative products to the presence of purpose within their business.

By harnessing employees’ passion to make a difference, you can unlock the spirit of innovation and creativity necessary to sustain growth and redefine business as a force for good. But it takes more to be a purposeful business than just creating a mission statement and putting a few motivational quotes around the office.

Building that sense of purpose into the company requires a continued demonstration of the connection between that purpose and the company’s business model.

Such a strategy needs metrics, but quantifying how well an organisation is adhering to a sense of purpose can be challenging. Employees can be surveyed with questions that ask how well the company purpose is resonating with and motivating them.

Companies can also look to their hiring and retention numbers — two metrics that often show that purpose-driven companies outperform their less purpose-driven rivals.

Ultimately, to deliver on its purpose, a company needs to repeatedly reinforce and i demonstrate its commitment at every level of the organisation, not just in the boardroom. This is important to help ensure that the vision is not only understood and shared by the team but that it also provides a focus to help outperform commercial targets.

Purpose can help drive performance and putting purpose at the heart of what you do has the potential to inspire, transform, and support the growth of your organisation.

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