The importance of an organisational purpose is well documented in the majority of best selling (and even some poor selling) business books.
For example in his excellent post on the relationship between Strategy and Purpose, Roger Martin argues that at its core, corporate purpose drives selection bias and helps increase the likelihood of success.
However a large proportion of organisations either don’t have a stated purpose or have one that doesn’t resonate with customers or employees.
In a Growth Orienteering context, a clear purpose should do three things:
Serve as a North Star
Guide decision making
Underpin a ‘why’ narrative that customers, employees, stakeholders and partners can rally around
So how do you know if your organisational purpose is … fit for purpose?
A good starting point is to learn from the common attributes of purpose statements of others who have embarked on successful growth journeys …
1. Simple and Concise
A purpose statement should be straightforward and easy to understand. Complexity dilutes its impact and makes it difficult for employees and customers to remember.
Alibaba's "To make it easy to do business anywhere" concisely emphasises its commitment to simplifying business processes for its customers globally. This purpose has successfully guided its expansive growth across core, adjacent and new growth territories including logistics, health and sports.
Similarly Canva’s “Empower the world to design” makes it abundantly clear that they are in the business of design tools but is expansive to enable it to serve a broad set of customer segments (Business, Education, Non-For-Profit) across an even broader set of design needs (Graphic, Digital, Print, Video etc).
2. Effectively Embodies a Bold Ambition
A bold purpose statement reflects a company's growth ambitions and inspires customers, employees, stakeholders and partners to strive for extraordinary outcomes.
Patagonia’s "We're in business to save our home planet" is unapologetically bold, reflecting its strong commitment to environmental activism and sustainability. It is arguably at the very core of the brand’s value proposition.
Similarly Who Gives A Crap started from a crowdfunding campaign centred around a bold purpose of "ensuring everyone has access to a toilet and basic sanitation”. This coupled with a strong brand identity has guided rapid growth of core products (Toilet Paper, Paper Towels Tissues) across multiple markets (Australia, UK, USA).
3. Communicates Commitment and Intent
Where possible a purpose statement should connect on both a rational and emotional level to help foster trust and a deeper connection with the brand.
Google added the words “and make it universally accessible and useful” to the end of its original purpose statement of "To organise the world's information" in an attempt to signal an ongoing commitment to make its service available to everyone.
Similarly Chinese tech giant Tencent signals a commitment to improve lives in "To enhance the quality of life through internet value-added services" which extends over services including Social Media, Financial Services and Healthcare.
Of course the market will rightly judge whether brands live up to their stated purpose, but a self-stated intent is something by which they can be held accountable to.
4. Enables Growth Beyond The Core (If Desired)
If an organisation has aspirations to grow beyond its core, a good purpose statement will enable this whilst also conveying the essence of its core business.
IAG’s "To make your world a safer place" allows it to explore growth territories beyond insurance but also brilliantly (IMHO) aligns a universal customer benefit (increased safety) with a core business benefit (reduced claims).
Tesla’s "To accelerate the world's transition to sustainable energy" is expansive enough to allow it to venture beyond automotive into various aspects of sustainable energy whilst incorporating a clever nod to its core business through the double meaning of the word ‘accelerate’.
5. Evolves As Needed
The good news is that a corporate purpose can and should be evolved to reflect shifts in strategic direction. Even some of the highest growth companies on the planet have revisited their purpose statements to enable their next growth chapter.
Microsoft only coined its "To empower every person and every organisation on the planet to achieve more" in 2015 under the leadership of Satya Nadella, 40 years after it was founded by Bill Gates. 2016 onwards saw a renewed period of rapid growth and innovation.
Meta has needed to evolve its purpose statement to respond to how its products have been used, and abused, and to reflect its shift from a single to a multi-product company. Initially stated in 2004 as “To give people the power to share and make the world more open and connected” two decades later it has morphed into "Give people the power to build community and bring the world closer together" to both support its investment into new areas such as the metaverse and to drive a focus on more human centred benefits, community and togetherness.
Conclusion
As Roger Martin stated in his article…
“A corporate purpose has the potential to be a very good thing. It is important to see it as a strategy choice and as I have always argued, the strategy choices need to fit together and reinforce one another. And a purpose fits with the rest of strategy if it drives selection bias that helps enhance the enabling management systems that build the must-have capabilities that enable you to win where you have chosen to play.”
At Vibrance, we landed on a purpose of "Realise Different" that is intended to convey our dual mission of (i) helping our clients realise profoundly different futures and (ii) continually striving to create new more efficient and effective methods of getting them there.
We love hearing examples of effective (and ineffective!) purpose statements as there is always something to learn from them. If any come to mind, please let us know.