Employees, customers and investors increasingly want to know your business purpose and be inspired by it – but how do you ensure your purpose statement is great?
Well, it’s a mix of art and science. Based on my analysis of hundreds of company purpose statements I’ve found there’s 5 things you really need to know before reviewing or creating yours.
1. Purpose and vision
Why no mention of the mission statement? I find they vary so much in their intent and form from company to company that, to be honest, we can live without them. Purpose and vision will suffice.
Your business purpose explains why you exist, the underlying reason for doing what you do. A vision statement on the other hand is the world you’d like to help create through your purpose. Some companies combine the two – which is okay.
The Australian telco, Telstra, is “building a connected future so everyone can thrive“. Building a connected future is the purpose, and everyone thriving is the vision.
2. Purpose is a societal benefit, not an activity
Purpose describes your benefit to society. Companies have historically talked in terms of financial goals (“we seek to maximise shareholder returns”) or activities (“we make cars”) instead of conveying a meaningful purpose (“we create sustainable transport solutions”).
Without purpose, the pursuit of profits is more prone to be at the expense of people and the planet. That type of business model has a very short use-by date.
3. Purpose is your North Star
Take purpose seriously because it is the North Star for your people and it’s what your customers expect. It drives productivity, performance and innovation.
If people see inconsistencies between your stated purpose and what you actually do or how you behave, then don’t expect to be an employer of choice. The best young talent will be excited by companies with genuine, lived purpose. Ignore them at your peril.
4. A purpose statement alone is not success
Facebook is a controversial company, drawing the wrath of regulators, users and even its own employees for the way it goes about its business.
And yet it has a great purpose statement: “Give people the power to build community and bring the world closer together“.
The lesson here is, great statement ≠ success! You’ll need to integrate your purpose into everything you do and ensure your people understand how they are contributing to it.
5. Purpose is not a positioning statement
Because it conveys a benefit to society, it’s fine for your company to have a purpose statement similar to another – you are competing in the efficient and effective delivery of it.
Another reason for avoiding mission statements is, at their worst, they get hijacked by the marketing department and become a mash up of purpose, positioning and vision in one go.
Primed for purpose
Your executives, directors and leaders need to be on the same page and understand the benefits of purpose. Getting their buy-in is critical before assessing where you are at, reviewing your statement and then integrating it into your business.
Reach out if you want to know more or set up a debriefing on the topic.
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