Businesses have entered a new generation of values. More and more millennials are reporting they want to associate with and support businesses that have a positive contribution to the world. Their personal purpose is tied to the decisions they make, and the dollars they spend.
Have you thought about your business holistic purpose? How do you even get started with identifying such an abstract concept?
What if I told you there was a Japanese tool that allows you to look deep into your business, and identify the greater purpose. Welcome to Ikigai!
Ikigai is a Japanese concept designed to help you realize your purpose in life. The word "ikigai" roughly translates to means "a reason for being" or "a reason to wake up in the morning".
It was originally created in Okinawa, Japan as a framework to identifying and aligning ourselves with our mission. This article re-purposes all the original concepts, transforming them to align with businesses as opposed to individuals.
Let's get started!
Ikigai starts with the awareness of four key pillars:
Business Values
Core Competencies
Income Generation
What the World Needs
Ikigai works best when you go deep into each individual question. Take a deep breath, and ask yourself these questions. Take your time! The more detailed and specific the answers are, the more effective your results will be.
Below I list some follow-up questions you can ask yourself to dive deeper into each section, and locate something you might have forgotten. I also give my own examples for reference:
Business Values
Every business has a set of values. It's good to identify the values, and write them down on paper. Some questions to help you lead the way to the values are:
What characteristics does the business embody? (Integrity, Boldness, Innovation, Stability, Fun, Honest, Professional, Simple, etc.)
What is your business known for externally? (Look at reviews, testimonials, client feedback, comments)
How would you describe your business goals in a macro-environmental perspective (We aim to help solve food insecurity by identifying inefficiencies in distribution chains and donating the excess to local food banks) instead of (We help food distribution companies improve their supply chain and integrate analytics to minimize wastage)
XYZ is a bold innovative organization that aims to provide stable and cost-effective solutions to identity management. XYZ is known as being helpful, honest, and efficient. XYZ aims to help undocumented migrants have an identity issued on a global platform to allow them to participate in financial and social systems.
Core Competencies
Is there something people often compliment your business about? Is your business known as a leader, or the best for something? Some questions to help you lead the way to the core competencies re:
What do you know your business is really good at? Do clients often praise something? (What problem is your business solving. What is the best feature of the solution?)
What is your competitive advantage? (Features, Design, Cost Effectiveness, Accessibility, Scalable)
What strengths has the business identified in it's SWOT Analysis (If you haven't completed a SWOT Analysis for your business, I highly recommend it)
XYZ is the leader in identity management software, and is one of the only companies able to digitize existing physical records. XYZ is able to compete on price due to economies of scale, and a large client base. XYZ is the most sophisticated solution because of the blockchain-based security and governance mechanisms built into the management.
Income Generation
What activities or sectors bring in the income for the business?
What is the largest income source for the business? (This one is straight forward, look at your income statements)
What is the secondary income source for the business?
If your largest income sources suddenly stop, what immediate alternatives exist (Try to identify an income source which your business is well positioned for)
XYZ's primary income source is a SAAS monthly-subscription model for users of the identity solution. XYZ's secondary income is sending targeted offers to users from our advertiser partners. XYZ identifies the opportunity to sell large amounts of data to local businesses and organizations.
What the world needs
From your business's perspective, what is the world missing? Think about sustainability, the environment, the less fortunate, global opportunities,
What would make the world a better place? (You know your businesses sector the best, so what the industry to do make the world a better place)
What CSR activities is the business pursuing? (Corporate Social Responsibility examples include carbon offsetting, donations, etc.)
If your business can broadcast one message to the world, what would it be?
The world would be a better place if everyone has access to a bank account, a safe place to store money, and a credit score to access financial tools. The world needs a solution to the unbanked people with no access to financial tools such as insurance or loans. XYZ is committed to creating an identity platform with credit score functionality to partner with banks and issue micro-loans to the unbanked.
Great job!
The next step in Ikigai is to connect the answers from above to find intersections. Bringing two questions adds a whole new depth into discovering your business and it's purpose.
If you don't have a pen and paper handy, or prefer to do this digitally, I built a tool that makes it easy for you to find the intersections here.
Identity - Business Values + Core Competencies
Think of your business identity. Is there something that the business is well known for?
Your business identity is the intersection of the business's values and the business's core competencies. Where do they intersect? This example statement below is a combination of the two answers realized above.
XYZ is a bold innovative leader in identity management software. The well-priced solutions are used globally to issue identities to undocumented migrants using sophisticated blockchain-based technologies to ensure security.
Strength - Core Competencies + Income Generation
Your business strength is at the intersection of core competencies and income generation. In simple terms, what the business is good at which also brings in money.
This example statement below is a combination of the two answers realized above.
XYZ's strength is offering an identity management software on a monthly-subscription model. XYZ is a leader in digitizing existing records, and extracting information for targeted advertising with partners. XYZ is well positioned to sell information gathered from big data analysis.
Opportunity - World Needs + Income Generation
Your business opportunity is at the intersection of what the world needs and income generation. In simple terms, what the business can do to help the world, which can also brings in money.
This is a great way to leverage global ethical opportunities that will also fulfill your Corporate Social Responsibilities in a financially sustainable way.
This example statement below is a combination of the two answers realized above.
XYZ's opportunity is to offer free identities to unbanked people in low-income areas of the world, while partnering with banks to offer micro-loans. The world can be more productive with portions of the population with new financial resources. XYZ can leverage it's data for advertising partners to provide targeted offers, and collaborate with banking partners on a finders-fee commission model for providing micro-loans.
Direction - Business Values + World Needs
Last but not least is your business direction, which is the intersection of your business values and what the world needs.
XYZ's direction is to continue providing stable cost-effective identity solutions for organizations while also providing free access to individuals that want to access financial tools and possess a digital identity. XYZ will focus on getting to know at-risk communities in rural Asia and Africa and learn how to best help these communities in a research-backed study.
What's next?
Now that you've completed the bulk of the work, it's time to see it all presented together. Is there a lot of overlap? It's okay if there isn't since it takes years to align a business with it's purpose, and usually fully overlap when the business reaches a level of maturity and experience.
I would recommend using Ikigai every quarter to calibrate business purpose, and account for changes in the market as well as new opportunities. This also allows the business to evolve, since all of the pillars are dynamic and react to internal and external changes.
Intersections + Insights (Abstract)
In theory, the perfect business Ikagai is an overlap of all of the above sections. When you enter all the information on a venn-diagram or Ikigai business generator, you will see the intersection of various elements in the business. Here are some insights:
Identity + Strength (values + core competencies + income) = Wealth and business success, but lack of purpose and global positive influence
Strength + Opportunity (core competencies + income + world needs) = Wealth and helping the world but lack of direction and identity
Opportunity + Direction (values + income + world needs) = Ethical business but lacking differentiation and competitive advantage
Direction + Identity (business value + world needs + core competencies) = Ethical business but lacking income and financial sustainability
After you have completed an in-depth Ikigai chart, you should be able to identify the aspects of your business which overlap, and shift your focus towards those projects and activities with the most amount of overlap.
Online Tool
Since this method requires a venn-diagram, I've created an online business Ikigai generator to digitally find your business purpose.
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