Businesses are doomed to fail when they stop asking the question, why?

Today, in saturated business markets, it’s incredibly difficult to differentiate yourself and gain a competitive advantage based on your product or price alone. What your business does will always be important, but businesses underestimate how powerful their ‘why’ is.

It’s important to ask questions like ‘Why do I offer my consulting services?’, ‘Why is my product sustainable and recycled?’, or ‘Why is this business important to me?’. That is because the answer to those questions is what can set you apart from the competition in the eyes of your employees and customers. Today, Australians are more considered and conscientious in the businesses and brands they choose to interact with than ever before.

How can you stay ahead of your competition?

Clients want to believe in the business’ missions and purpose, and ensure they’re aligned on big issues like their ESG (environmental, social and corporate governance) policies. Today, as economic pressures intensify, businesses that communicate their purpose and stay true to their ‘why’ will be better placed to build strong connections with their clients and employees. But how does priortising values over valuation actually drive greater business success?

Understanding the value of your ‘why’

The biggest competitive advantage for businesses today, particularly during economically uncertain times, is loyalty. Cause and culture, not capital growth, inspires loyalty amongst customers and employees. Ask yourself what motivated the business to start in the first place, the guiding mission and purpose, and the environment and culture that exists.

Culture must not be dictated by directors and managers for employees to follow. It must be genuine and permeate an entire company. When people understand the purpose and mission, and have helped shape the culture, employee engagement and satisfaction increases.

According to the OECD (The Organisation for Economic Co-operation and Development), Australia currently has the second-worst talent shortage in the developed world. Strong culture and fundamental guiding principles attract and retain quality people and set businesses apart from the competition. At Zoho, our value extends far beyond our balance sheets. Our true capital includes the shared culture and dedication of the people who make up the firm.

Whatever your business, don’t lose sight of your purpose. Take Aussie start-up ‘Who Gives A Crap’, for example. While its core product is toilet paper, its purpose – and root of its success – is reducing waste and building toilets to improve sanitation in developing countries.

Who Gives A Crap clearly and easily defines its purpose and articulates its why which helps it appeal to today’s conscientious consumers. It’s a cause, I’m sure, its staff and customers are proud to support. The deeper and more meaningful connections with clients and employees the better business results you drive. At Zoho, we believe that if our people thrive, so will we.

If they grow, we will too. If we focus on them, everything else will fall into place. If our internal culture is strong, nurturing and motivating, the benefits are felt by our clients.

Understand today’s consumers

People don’t only buy what you do, they buy why you do it. Generation Y and Z make up nearly two-thirds of the world’s population, so their influence and spending power is huge.

More than previous generations, Gen Y and Z demand greater diversity and transparency from brands and place greater importance on a business’ purpose. Accenture data reveals that 70% of millennials prioritise inclusive and diverse brands over those that aren’t. For businesses to appeal to this audience, you need to consider the changing nature of diversity.

Make a genuine commitment to it internally, and communicate it externally. For example, almost half (48%) of Aussies – including 71% of Gen Z and 52% of Millennials – would not work for a business that did not take action to address climate change. If you make these big issues important to your business, you’ll make your business important to your audience.

In challenging times and competitive industries, it’s easy to become pigeonholed by the core, day-to-day function of your business. However, it’s essential to never lose sight of your principles and the reason why you do what you do. It might be difficult to differentiate the quality of your product or the value of service, but if you communicate why you’re motivated to do what you do, your clients’ and employees’ affinity to your business should grow.

Vijay Sundaram is the Chief Strategy Officer at Zoho.