The Net Promoter System Podcast

Introducing: Winning on Purpose

In his new book, Fred Reichheld says that when companies put enriching the lives of their customers at the core of everything they do, they come out on top.


Introducing: Winning on Purpose

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Since its inception almost 20 years ago, the Net Promoter Score has spread globally, with two-thirds of large companies now using it to gauge customer happiness. The reason for its popularity, says Fred Reichheld, a Bain fellow and the creator of Net Promoter, is that the idea is simple: Measure, as a company, how much you’re enriching customers’ lives.

Fred’s new book, Winning on Purpose: The Unbeatable Strategy of Loving Customers, releases December 7. A major theme of the book, coauthored with Bain’s Darci Darnell and Maureen Burns, is purpose. I asked him why.

Order the Bain Book

Winning on Purpose: The Unbeatable Strategy of Loving Customers

This new book by Fred Reichheld, Darci Darnell, and Maureen Burns demonstrates that great leaders embrace a higher purpose to win, and Net Promoter® shines as their guiding star.

“I saw so many companies going down the wrong path. Now I can quantify it. I can say confidently, as we do in the book, that 90% of businesses are on the wrong path. They have embraced a purpose that is guaranteed to lose,” Fred explains.

For Fred, a well-defined company purpose is the engine that drives success. But it’s not enough. To succeed, an organization’s No. 1 goal should always be to make customers’ lives better. And having a clear and well-articulated sense of purpose that is grounded in delivering value to customers is core to winning on purpose.

“When you’re living up to this purpose of enriching the lives you touch, you do get a higher Net Promoter Score, but the reason it’s important isn’t necessarily because you grow faster and make more money. That’s a nice benefit, but it’s because you’re living a true purpose that makes the world better.”

In this episode, the first in a series with the authors of Winning on Purpose, Fred and I discuss what it means to win on purpose, which companies are getting it right, and how organizations can use purpose to enrich the lives of their customers.

Learn more about Winning on Purpose and preorder a copy here.

In the following excerpt, Fred Reichheld explains the importance of purpose and the benefits for companies that get it right.

Rob Markey: Why was it so important to you to write a book devoted to the concept of running a business with purpose? Can you talk a little bit about what you mean by that and why you think companies aren’t already doing that?

Fred Reichheld: Yeah, it may have had something to do with the doctors talking to me about survival curves and how many people are still alive when they have my condition [Fred was diagnosed with cancer]. It’s sorta, you know, finite days on earth. So, I had that mindset. And at the same time, I saw so many companies going down the wrong path.

Now I actually can quantify it. I can say confidently, as we do in the book, 90% of businesses are on the wrong path, that they have embraced a purpose that is guaranteed to lose. We asked a couple hundred executives around the world: What’s the primary purpose of your business? Only 10% said it was to make customers’ lives better.

The vast majority said it was, oh, to balance our duty to all the stakeholders we touch, or it’s to maximize shareholder value. Some said it was to be a great place to work. Only 10% said making customers’ lives better is the primary purpose we exist.

Rob Markey: Wait a minute. Why is it not right to say something on the order of “we want to enrich our community; we need to make all of the stakeholders in our organization or in our enterprise better off”? Why is that?

Fred Reichheld: Trying to be accountable to everyone means you’re truly accountable to no one. I think you have to, of course, live this golden rule standard with everyone you touch, whether they’re an investor, an employee, a supplier. But you’ve got to think about, as a community, what is our primary purpose?

And if you don’t embrace this idea that it is to make customers’ lives better first and foremost, you are on a path to ruin. Maybe it’s a slow death. But what we’re finding is that these companies who say customers come first and they deliver on it, and they have the highest Net Promoter Score in their industry—which is a good measure—those are the guys who are just crushing it in terms of profitable growth and inspiring employees to innovate and get better.


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