Some time ago I was enjoying a conversation with a successful entrepreneur when he looked me in the eye and said “Our purpose is not profit. That’s just an outcome of doing something right”. This flew in the face of everything I had ever been taught. And I loved it.
In the intervening years there has been a growing movement, mostly in line with the above statement. It’s a place where social responsibility is as important as shareholder returns. Where, indeed, profit is secondary to a purpose. And I think it’s quite amazing. But how does it work? How do you communicate a purpose and get that purpose to work for you?
Nick Sarillo is the founder of ‘Nick’s Pizza & Pub’, a community focused chain that has scooped numerous awards and is one of the busiest independent pizza companies in the USA. It is very much a purpose driven company and that purpose is rooted in the behaviour of the employees. As Nick explains: “we train our team to fully understand and connect with our purpose and feel how it connects with their personal purpose. Then every job, and every part of the job, refers back to how the task is connected to our purpose. We want them to be the individuals they are and bring the purpose to the guest experience…in a way that feels authentic to them”. For Nick, the result is not only a real experience for his customers but also an enthusiastic and engaged workforce. In an industry where 150% staff turnover is the norm, Nick’s figure is under 25%.
Employees consistently stay ‘on purpose’ and that requires recognizing positive behavior as it happens, backed up by training. For example, new team-members will write an example of an ‘on-purpose’ experience they created for a guest. Purpose is also key to the start of the day; “We pick a value to focus on each day, or we pick the purpose sometimes, then recognize the behaviors that cultivate that value or purpose throughout the day”, states Nick.
One things that can threaten purpose is growth. As companies grow, they often become diluted versions of themselves. In part, this could have something to do with the expanding footprint of the company and increase in locations. But if managed correctly, Nick believes this should not be an issue. Indeed, it might even be possible to open a Nick’s Pizza & Pub in New Zealand, some 13,000 plus KM’s away from the Chicago base. Nick explains: “Instead of the culture of the outside community defining and changing the culture of each location a business opens in, the strong culture of the organization will actually influence the community. So it’s actually the opposite of what people assume will happen”.
So are purpose and profit at odds with each other? No. Is profit bad? Most definitely not. A focus on purpose does not preclude a love of profit. It’s just that profit may be seen as a result of the purpose. You focus on what you are putting in, rather than what you hope to pull out. The power of such an approach to business is immense and no better illustrated than through Nick’s story of how his company was days away from bankruptcy.
When the GFC hit, Nick suddenly found himself with too much debt. Then a construction project on the road outside one of his restaurants took out 50% of the business for 9 months. There was barely enough cash to make the next 4 weeks of payroll. But the purpose Nick and his team had communicated to the local community was about to be recognized in the most spectacular way. Nick went against the advice of the banks and PR people and wrote an honest letter to his guests, accepting the responsibility and fault was his own. He asked for their support and that they please come stop by his place for a pizza.
By this time, Nick’s business was a well established community member. Indeed, 5% of revenue went to support local community events and causes (they do no marketing). The response? The community rallied around, visited, ate pizza and had a good time. The business was saved. And it was saved by the strength of it’s standing in the community, thanks to it’s purpose.
That’s pretty special and I’m not sure businesses without a clear purpose would have the same wonderful result.
And it makes sense doesn’t it? Why would consumers believe in you if it’s clear your focus is to make a profit off them? You’re not showing them anything to get behind. Show them a purpose and a reason for standing with you. Then when you falter and fall, they may just be there to catch you.
Nick Sarillo is the founder and CEO of Nick’s Pizza & Pub and Nick’s University. Founded in 1995, Nick’s Pizza & Pub is one of the top ten busiest independent pizza companies in per-store sales in the United States. Nick’s Pizza & Pub has margins nearly twice that of the average pizza restaurant. In an industry in which the average annual turnover rate is more than 150 percent, Nick’s Pizza and Pub boasts a less than 25 percent employee turnover rate.
Green Blood & 5 Lessons in Culture
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