Purpose Can Be Powerful, But It Won’t Replace Pay

I hope I’ve done a reasonable job of making a case for why it ain’t (just) about the pay and how important it is for all of us to be a part of something that matters. A strong purpose is absolutely critical; for our organizations, for us as leaders, and for each member of our teams! And when purpose is firmly in place, businesses achieve better results. But don’t take my word for it, consider the statistics Tracy Brower shared in her Forbes.com article called “The Power of Purpose and Why It Matters Now”:

Purpose is also powerful for companies. A study published by Harvard Business Review found when companies had a clearly articulated purpose which was widely understood in the organization they had better growth as compared with companies which hadn’t developed or leveraged their purpose. Specifically, 52% of purpose-driven companies experienced over 10% growth compared with 42% of non-purpose-driven companies. Purpose-driven companies benefitted from greater global expansion (66% compared with 48%), more product launches (56% compared with 33%) and success in major transformation efforts (52% compared with 16%).

While I’ve intuitively believed for a long time that a strong purpose can make a tremendous financial impact on an organization, these numbers provide me with a bit of confirmation for my gut-feeling. As great as this can be for any of our companies, I think it’s worth mentioning that the benefits of that purpose cannot stop in a corporate profit and loss statement. A purpose can indeed be powerful but it won’t replace pay - and it shouldn’t!

Think back to the internet trolls that were chirping at one of the shorts I posted to our YouTube channel a while back… I can’t say that I’d be very excited about giving a company all I had in me, indefinitely, knowing how much profitability I was responsible for but never seeing any of that make a difference on my paycheck! If I were forced to place a bet, my money would be against those trolls having much do with anyone being profitable. I can’t point to anyone using their keyboard to whine about how the entire world has done them wrong being all that engaged in achieving any kind of purpose. That said, we would do well to make sure we’re providing the best we possibly can for our team members who are actively engaged in helping achieve a strong purpose. While they likely get a fair amount of fulfillment out of what they do, that fulfillment - or even the strongest purpose - won’t be what feeds their families.

When an organization experiences the types of growth referenced in that Forbes article, doesn’t it just make sense to reward the folks who contributed to it? Taking care of our great team members is always less expensive than losing them to someone else who will, but I won’t hash out the cost of poor employee retention or the cost of constant recruiting here since I covered that in very specific detail through two chapters of What’s KILLING Your Profitability? (It ALL Boils Down to Leadership!) What I will do is emphasize that tying fair (or even best-in-class) wages to working toward a definite purpose leads to profitability, and that creates an even greater opportunity to take care of our team members - so we’ll work through that in more detail next time…