Know Thyself: The Importance of Knowing Your Organizational Identity
One of the areas that small business owners often overlook in their businesses is establishing a clear organizational identity – the business' purpose, mission, vision, and values. This seems like something only big businesses with lots of employees need to be concerned with. However, there are several reasons why every organization – even a sole proprietorship – needs a clear understanding of its organizational identity regardless of size.
1. A clear identity will help you develop a decision-making framework.
It is impossible to make consistent, disciplined decisions about the current and future state of your business if you don’t know who you are or where you want to go. Taking the time to clarify and write down why your organization exists and what you bring to the marketplace will serve as a north star for the myriad of variables and opportunities you need to assess on a daily basis.
Consider the restaurant owner who has an opportunity to cater an event. Sure, it may be an opportunity to make more money but is it the right one? If her mission is simply cooking great food for people this could be a good fit. But what if her true mission and passion is creating a unique dining experience for her customers? Can that experience be replicated outside of the restaurant environment she has curated? If it can’t, what damage might this opportunity do to the brand she is trying to create? Completely understanding your business identity gives you a framework through which to evaluate opportunities and make decisions for the future of your business.
2. A clear identity will help you identify and connect with your customers.
Understanding exactly who you are will help you identify those prospective customers who are “your people”. There are always competitors out there who offer alternatives to what you do. There are lots of plumbers, mechanics, flower shops, dentists, and banks (so many banks). So what sets you apart? Hopefully, you know what niche of your market you are trying to reach. But more importantly, you need to know exactly who you are as an organization so you can connect with people who will resonate with your distinct point of view.
Let’s take a look at those banks for instance. Are you a bank that values long-term relationship and becoming part of a local community? If these are some of your values, you will likely appeal to customers who are looking for someone who knows their name when they go in to ask about a line of credit or cash a check. If, on the other hand, your values include shaping the future and having the resources to fund large projects you will likely appeal to big developers and municipalities. Ultimately, you can’t possibly know who to seek as prospective customers and where to spend your limited marketing dollars if you aren’t clear about who you are to begin with.
3. A clear identity will help you vet and assimilate new employees.
So much is written about the best way to attract, train, and retain talent largely because this continues to be at the top of most business owners’ list of challenges when it comes to running a business. One way to make this process exponentially easier is developing clarity around exactly who you are as an organization. If you and/or your leadership team are clear about what your company values, it is fairly easy to apply an early litmus test with potential employees regarding their organizational fit.
For instance, if your culture is one that values developing leaders, a candidate who clearly has no desire to move up in your organization likely isn’t a great fit. It doesn’t mean they are a bad person or even a bad employee - they just aren’t the right fit for your organization. You are able to deduce that right away because you know exactly what you value, saving you both considerable time.
Value alignment continues to be important once that hire is made. It is all but impossible to fully assimilate a new employee into your culture if they don’t share the same core values as you do. On the flip side, if they do share those values, you will likely be surprised at how fast it seems like they’ve “been around forever”. Clarity around organizational identity will greatly affect the speed and accuracy of talent acquisition and assimilation.
4. A clear identity will help you motivate your employees.
How can I motivate my employees? Ah, the million-dollar question of all business leaders. In reality, the right employees don’t need to be motivated, they need to be led. They need someone to guide them on exactly where to focus their considerable energy and talent in the best interest of the organization. The best leaders know how to do this for multiple people in different areas of the business. So what separates the employees who start their Mondays ready for new challenges from those who start their Mondays with their countdowns to Friday afternoon?
I’m convinced that the biggest difference is employees’ connection, or lack thereof, with the purpose, mission, vision, and values of their organization. Employees who work for an organization who believes what they believe about the world and is on the same mission as they are will sweat and bleed for that organization. They don’t need to have a manager to tell them to do that. But what if the employees don’t know what the mission of the organization is? What if they do know but don’t connect with it? (Or, worse yet, what if they know the mission but don’t see leadership living it?) These are the employees that are working for a paycheck. They will give you no more than what they think that paycheck is worth. If, however, you are crystal clear about why the world needs the product or service you provide and can communicate that to your employees, you will get the best from those who believe the same thing. You can also identify and assist those who do not resonate with your particular mission in finding somewhere that they do fully resonate. Isn’t that what we all want anyway?
Any organization of human effort must have a clear identity as a basis to know who all wants to be on board, moving toward that shared future. If your business can answer the fundamental question "Why do we exist?", it will help you make consistent decisions, identify and connect with your customers, vet and assimilate new employees, and tap into the intrinsic motivation of those employees once they are on board. Taking the time to answer that question will pay dividends for you, your employees, and your customers.