What a week! Meltdown in Westminster, no sign of a resolution to the endless Brexit calamity, fires burning in the Amazon, disaster in the Bahamas, Hong Kong paralysed by discontent. Uncertainty has become the new normal. It feels like the world is in uncharted territory.
It’s no coincidence that at times like these, people yearn for certainty and meaning in their lives. And often, that certainty can come from a true sense of purpose – a reason for existence. This can become an anchor in the turbulent waters of world events.
It’s also why businesses with a genuine sense of purpose tend to be more successful. Once lived and breathed by every employee, purpose increases motivation and happiness at work as well as being a north star that guides every company decision.
Defining your company’s purpose is likely to be the most important strategic decision you’ll ever make. Yet most people exist in businesses with no purpose. They go through the motions every day – turn up to work, do an ok job, go home again. No loyalty, no engagement, no joy. I can’t help thinking about a poster I saw in one of my first jobs: ‘Doing a good job around here is like pissing yourself in a dark suit. You’ll get a warm feeling but no-one else will notice’. What a dismal way to live your life.
And yet, if companies can define their purpose, it can be transformational – I’ve seen it with my own eyes. So, what exactly is purpose in business? And how do you go about finding it?
Purpose is not the same as vision, mission or values. It’s a visceral and emotional connection to why you’re doing what you’re doing. The difference you’re going to make to customers, your staff and the wider world. The legacy your company is going to leave.
In my early days as MD at Rackspace, we felt we were on a purpose-led adventure driven by circumstances beyond our control. I joined just before 9/11 in 2001. If the attacks hadn’t happened, the business would have been sold the next day. But the stock market didn’t open and the deal didn’t get done. With only three months’ cash left, we defined our purpose as one of ‘Fanatical Support®’. We recognised that our competitors were rarely, if ever, exceeding customer service expectations.
So there we were – a different business that was all about service. Free, 24/7, unlimited telephone support. We’d make it easy to get hold of us and guarantee to pick up calls within 3 rings or less. The person who picked up the phone would be a level 3 tech, not an overseas call handler. We also guaranteed 100% network up-time. This was all unheard of. The net promoter scores (NPS) we achieved were up there with the best in the world and underpinned our economic model.
We felt like we were on a revolutionary mission and had a shared sense of accomplishment when we not only survived but thrived. We’d faced this together and come out stronger. We were proud.
Our purpose of Fanatical Support® became the guiding force of the company. It changed every aspect of what we did. Instead of hiring from our competitors, whose models were based on denial of service, we hired people with a hospitality background. They really got service. We hired for attitude and trained for skill. New customers were used to calling tech support in their previous suppliers and getting arrogant blokes who treated them like idiots because they didn’t understand the problem. What a breath of fresh air when they called us! Our staff would throw themselves on an unexploded bomb for a customer. In fact, they’d go looking for that unexploded bomb! Doing a good job for their customers gave them real satisfaction and personal joy.
There’s no doubt that Rackspace’s stratospheric growth was driven by its purpose. By delivering Fanatical Support®, we massively reduced customer churn. Our existing clients became the main source of new business and were the reason we grew to £26m in only five years in the UK.
Having shared these insights, we discuss what they’re doing here. Over the next 3 to 5 years, what do they want to achieve for their customers, their staff and the wider community? What impact will they have on these people? What’s important to them? Some people will say they just want to make money. That’s totally fine but our relationship ends at that point. It’s not what I’m about and it wouldn’t work to continue. Happiness has always been the thing that drives me. I like to have an impact on the lives of the people I work with.
I often reference Jim Collins’ work from his best selling book, ‘Good to Great’. His approach revolves around what he calls the ‘hedgehog concept’ It’s based on the ancient Greek parable of a fox trying every trick in the book to eat a hedgehog. Collins argues that your company is more likely to succeed if you can identify the one thing you do best.
Sounds simple but it will take time to define this, working through three specific areas. Firstly, isolate the things that give your company energy and passion. Look at what gets you and your team out of bed early in the morning and keeps you working late voluntarily. Secondly, define the one thing that you can be best in the world at – something you know you can do better than anyone else. And finally, examine the things that drive your economic engine in terms of profitability and market potential.
Where these three areas overlap is your company’s ‘hedgehog concept’. Sometimes this might mean letting go of some things and attaching more tightly to others. You may need to learn to say ‘No’ more often than you’re used to.
Once you have your mantra, check it resonates and excites the executive team. When David Bryce, our VP of Customer Care, coined the phrase ‘Fanatical Support’, it felt like we were changing the world. People in the IT space have said to me since, ‘You know Dom, when you ran Rackspace, you changed the way customers thought about customer service.’ We built a reputation and set about creating a remarkable company. And you can only be remarkable if people remark on you.
It’s not uncommon for businesses to lose their sense of purpose as they grow. Somehow, it’s not fully embedded in the DNA of the company.
Take Cloud IQ as an example. When I began working with them, they’d been through a period of x5 growth in 9 months. Often organisations hit a plateau at this point so it’s vital to be really clear on exactly who you are to attract the right people and repel the wrong.
When I sat down and asked the executive team about their purpose, no one really knew. So, I got James Critchley, their CEO, to tell them the founding story of the company. It’s a good one! The original founders were eight guys who had met at Ogilvy developing marketing technology for customers. Through the course of their careers, they'd felt strongly that customers were overpaying. So strongly that they got together with no business plan but a strong drive to democratise the market. They codified their purpose – to produce an effortless e-commerce marketing platform.
It was clear that this was a story that hadn’t been properly communicated. The executive team had hired a good number of employees without clarifying their purpose. So, we ironed this out, defining purpose, values and their BHAG. Next step was to appoint a culture committee whose task was to embed these throughout the company. Because of the work we’d done, this committee now had a common language and direction of travel.
They created a comms rhythm of a weekly email, monthly all hands and quarterly celebrations. Their new kudos channel, added to Slack, recognised when people did the right thing and referenced their company values. The behaviours inherent in these values were turned into interview questions and we made sure the founding story was part of on-boarding process. The purpose and values were also used in performance reviews, the updated handbook, the intranet and through-out the company’s knowledge base. Finally, a series of posters reflected the founding story all over the organisation.
It’s been hugely gratifying to witness Cloud IQ’s evolution as a company with purpose at their heart. James himself has young children. Although he’s CEO, he makes time to go to their plays and nativities. And he encourages his staff to do the same. He believes a committed, engaged workforce is not about the length of time spent at your desk, it’s about your productivity. Over the summer, Cloud changed their working hours so that staff could finish at lunchtime on a Friday and spend time with friends and family. Just brilliant to see employee happiness given such a firm priority!
At Rackspace, we knew our purpose was fully embedded when staff used it to raise and address other issues. For example, people told us our maternity package wasn’t fanatical. So, we changed it to make it fairer for the female graduates we’d just hired. When things like this happen, it’s clear that purpose is alive and well in your company.
I once worked with a client who ran an industrial tiling company. The MD said to me, ‘You know Dom. When I started this business, I just needed a job. It’s not about the money now. If I spend the next 10 years running this company, it’s got to be for another purpose. I want to make a difference to people’. He decided to look at environmental impact, reducing this by recycling waste pallets amongst other things and saving money for his customers as a direct result. This money was then donated to buy flat screen TVs for the children’s cancer ward at Southampton General Hospital.
He also realised he could have more impact on staff if they were permanently employed, so changed his company’s employment practices to move away from using contractors. And he plans to create an industry-leading apprenticeship programme in commercial tiling. A real legacy!
Do it right, and defining your purpose can completely transform your business, from the suppliers you choose, the staff you recruit and the path you navigate. Re-imagine, capture, create or pull from history what the true purpose of your business is. Then, with this solid foundation, you’ll see profits rise, staff get happier and your business grow to its fullest potential.
Dominic has spent 14 years working in sales, marketing and business management within the IT sector. He has held executive positions at Peer 1 Hosting, IT Lab and Rackspace. At Peer 1 he built the UK business to £30m run rate in 5 years. He won many awards for creating a great place to work. At Rackspace Dominic built the UK company from four to 150 staff, and increased annual revenues from £595,000 to £25 million in just four years. Under his management, Rackspace was recognised as one of the most outstanding workplaces in Europe, and won several service awards for its Fanatical Support TM. Dominic has a BSc in Agricultural and Food Marketing from Newcastle and a MBA from Sheffield Business School. Dominic is also a regular public speaker on creating great places to work and achieving continuous client satisfaction and an assessor on the Sunday Times Customer Experience Awards.