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Building strong strategic foundations: articulating your purpose
If you can't articulate your purpose clearly and articulately, you're always going to be on very shaky foundations. The words you use matter.
A clear purpose is the cornerstone of any modern business, but few are expressed clearly. In this article I’ll explain how to shape and write a clear purpose statement.
What defines you as a company? Why do you exist?
Every business exists for a reason and aims to achieve something. Strong businesses have a very clear understanding of what those things are, what type of company they want to be, and where they should focus their activities. In a modern strategy, these are communicated via a series of ‘core components’ that articulate the company’s direction and provide guide rails for deciding how best to get there. Purpose, vision, values and principles underpin the behaviour of every modern business.
In this article I’m going to focus on purpose. We've written about the importance of purpose for many years here at WF but I want to focus this piece on the more practical aspects of how you actually articulate your purpose.
The value of a clear purpose
A brief recap. At the very core of every organisation is its purpose: its ‘why?’ It’s a short expression that defines at the most profound level why the company exists. A well-written purpose statement is, arguably, the most powerful strategic asset a modern organisation has. Every action the company takes should be aligned with, and measured against, achieving its purpose and while it may need to be rewritten periodically to reflect the times the company is operating in, the underlying meaning should be a constant (unless the company profoundly changes direction, of course).
Anyone who has followed Microsoft’s fortunes will know that Satya Nadella, Microsoft’s CEO, has done an extraordinary job of rediscovering Microsoft’s mojo after years of short-sighted business leadership under Steve Bullmer. At an event I attended recently he was asked how he’d got Microsoft back to something close to its best in his tenure so far, and his response was priceless:
“I’ve really just focused on Bill and Paul’s original vision for Microsoft, its original purpose as a company, which is to make tools that help every company become a great technology company. I ask whether every decision we make is aligned with that, and if it’s not, we don’t do it”.
This is a perfect example of how powerful purpose can be, and how important it is as a guiding light for the organisation. It’s particularly important for established companies – many of whom have vacuous mission statements on the wall that mean nothing – to be able to articulate their purpose clearly.
Interestingly, I find Satya’s more informal framing of Microsoft’s purpose to be stronger than its official one, which is ‘to empower every person and every organization on the planet to achieve more.’
Articulating your purpose
It’s important to remember that your purpose is why your company, specifically, exists. That’s a decision that, as owners or leaders of an organisation, you get to make. It is not determined by the market, nor is it determined by customers. They play a huge role in how you achieve your purpose, but they can’t (or certainly shouldn’t) tell you why you exist. Purpose is a choice you make when you form a company, or when you need to change one.
In a successful digital business, some things need to be driven inside-out, and many others outside-in.
Purpose is the most important of the inside-out components.
I work with many companies who need to re-articulate their purpose, and a surprising number who need to define it for the first time. Most don’t have a written purpose that articulates why they really exist: some are too broad, some too narrow, and some are just completely meaningless.
A good purpose statement does a number of things:
It sets a ‘centre of gravity’ for the entire organisation and ensures that everyone working there knows why they come to work
It defines where the company should should focus its activities – its operational domain or competitive arena – and where it shouldn’t
It gives the company an infinite role in the world – an ongoing reason to strive, not a finite objective to be met
I’d argue that all of the powerhouse companies of the digital economy will be built from a strong purpose because it’s critical to know where your organisation has licence to operate and innovate, but it’s also of ever-growing importance to the people that work there that they’re contributing to something meaningful. Something they believe in.
Countless books have been written on this subject. Simon Sinek’s series is probably the best so if you’ve not read them (or watched his original TED talk, ‘How great leaders inspire action’) it’s a worthwhile investment. Understanding the importance of purpose is an essential modern business skill.
What does a strong purpose look like, and why?
Capturing purpose effectively takes honest thinking and careful execution, but when you get it right, the simple statement you end up with can be transformative.
My key principle is that you should start by looking as far along your value chain as you can to reach the ultimate recipient of what you do. This helps to avoid mixing up the ‘why?’ with the ‘how?’ or the ‘what?’
Equally, it’s important that your purpose is directional but not constraining: it’s there to offer guide rails not to act as a straight jacket. It should articulate your domain in a way that makes it clear where you operate without prescribing how.
Which?, the UK consumer rights organisation, defines its purpose as:
‘To make consumers as powerful as the organisations they deal with in their daily life’.
This is a great example because, on the one hand, it defines what type of organisation Which? is, while offering huge opportunities for how it might achieve its purpose. On the one hand it can do product testing to ensure that manufacturer claims are true, empowering consumers to see through the marketing hype and make informed choices. Equally it can campaign against unfair practices in banking. It can lobby government, offer legal support for consumers, operate utility price comparison and switching services, and much more.
It defines the domain that Which? can reasonably operate within, but is broad enough that it could reasonably expect to have a role in society for as far into the future as anyone can imagine.
When making decisions about where to invest its resources, the Which? team can always ask whether an initiative is aligned with its purpose, which is all about empowering consumers. Sometimes they’ll do that by campaigning for companies to change their practices, but only with a view to achieving their purpose. Improving the daily lives of consumers is ultimately the reason Which? exists, so that’s where the organisation’s purpose is centred.
It’s a purpose that you can easily imagine being used by the organisation’s leadership to instil a sense of common purpose in the entire team, and if the organisation lives up to its purpose, it’s not hard to imagine people wanting to work there because they believe in that purpose.
Let’s look at a very different type of company. IKEA, a Swedish-born global icon, says its purpose is ‘To create a better everyday life for the many people’ (albeit a translation from the Swedish original).
This shares many of the same characteristics as the Which? example above, but the key here is in ‘the many’. Again, tons of scope for IKEA to explore ways to realise its purpose, but it’s pretty clear that this is not a company that is going into the luxury goods market anytime soon.
Walk around an IKEA and you’ll see small room sets — the rooms found in the everyday lives of many people. Everything they sell is cleverly designed to achieve as accessible a price point as possible, making it relevant to as many as possible, and everything they create is intended to have a role to play in everyday life.
Increasingly, IKEA is developing smart devices and technology-enriched services to supplement its traditional furnishing and homewares, and that aligns perfectly with its purpose.
Now you could argue that IKEA’s purpose (accepting some lost-in-translation nuance) is a bit wooly or generic, and I would probably agree, but IKEA knows exactly what it means and they act accordingly. That’s another important aspect of a company’s purpose: it’s not a marketing message. Its role is primarily an internal one; a central unifying cause that everyone in the organisation can unite behind and act against. It’s not a secret, but it’s important to remember that it’s not a message: it is, for all intents and purposes, the unchanging, core truth at the heart of the organisation.
There are many ways to articulate a company’s purpose, but what’s key is that your statement is identifiably you.
Lego’s is ‘Lego exists to inspire and develop the builders of tomorrow’. Apple’s original version is believed to be ‘Apple is dedicated to the empowerment of man — to making personal computing accessible to each and every individual so as to help change the way we think, work, learn, and communicate.’ Harley Davidson’s is ‘we fulfil dreams through the experience of motorcycling’. Nike’s is ‘to bring inspiration and innovation to every athlete* in the world. *If you have a body, you’re an athlete’. Thomson Reuters is ‘we provide professionals with the intelligence, technology and human expertise they need to find trusted answers.’
Some are written better than others, but each aligns with the organisation it represents.
What to avoid
When I said that IKEA’s might be a bit fluffy earlier, it’s because it lacks enough specificity. Your purpose needs to have clear enough ‘edges’ to it that it doesn’t just give you license to do anything. Equally, it shouldn’t describe a behavioural aspiration, for the same reasons.
‘To always excel’ or ‘to strive for excellence in everything we do’ or even ‘to always be better’ are not purposes. Even so, they’re all real examples that I’ve come across. Imagine that probably-urban-myth NASA story from many years ago where as part of a branding exercise a janitor was asked what he did at NASA. “I help put people into space”, he said. If it’s even halfway true, that was an organisation with a clear purpose.
Imagine if he’d said “I help us to strive for excellence in everything we do.”
None of the companies whose statements these were could possibly use them to achieve the type of transformation that Satya Nadella has achieved at Microsoft, because you can measure both anything and nothing against them.
Generally, avoid articulating your purpose around superlatives like ‘best’, ‘most’ or ‘exceptional’ and stay away from empty business statements like ‘operational excellence’ or ‘success’. Sure, you might get away with ‘we exist to deliver an amazing experience to our customers’ if you’re a company that creates magic shows for children, but even here I’d be inclined to form it more explicitly: ‘we exist to create live experiences that amaze children’.
I find it hard to see how 'to strive for excellence in everything we do' would help its original owner – a financial services company – to identify where it should invest its resources, or where it has licence to innovate in the products and services it offers to its customers.
For the most part stay away from this type of language, and make your purpose more, well, purposeful.
Purpose is the foundation for everything else
If you want to build a strong business that is always fit for tomorrow, start by articulating your organisation’s purpose in a meaningful way: it should make you excited to be part of it. It’s fine to re-examine and tweak it periodically (read: after several years) as you evolve, although you shouldn’t need to change its meaning unless you really are fundamentally changing the company.
In our company we started with ‘we exist to help established organisations thrive in the digital age’. It holds as true now as it did 20 years ago. What we offer and how we do it has evolved constantly, but why we do it remains largely the same.
A strong, meaningful purpose is an essential foundation of any modern business. Capturing the true essence of why your company exists really can have a profound effect on how you think about the future and the opportunities it holds. And it’s not just important to guide your decisions: a growing number of people put purpose at the top of their criteria for whether to join a company or not. It’s worth every bit of time and effort to get it right.