What does a ‘good’ purpose statement look like?
Amelia Watts, Communications Manager, A Blueprint for Better Business
Last year Unilever CEO Alan Jope, said to an audience at Cannes Lions: “Woke-washing is beginning to infect our industry. It’s putting in peril the very thing which offers us the opportunity to help tackle many of the world’s issues.” He added: “Purpose-led brand communications is not just a matter of ‘make them cry, make them buy’. It’s about action in the world.”
Talking about purpose is undoubtedly popular, but underlying the coverage and the ongoing discussion is a growing level of cynicism about the way purpose is being adopted. A fear that purpose-wash will be potentially damaging especially at a time when setting and pursuing a purpose beyond profit is gaining traction with regulators, investors and the public. Critics question how deeply embedded purpose is or if it is simply a short-term or reputation-improving initiative. What is said in an organisation’s purpose-statement and what the organisation is actually known for – means the say-do gap can be painfully clear.
It is evident that not all declarations on purpose – or purpose statements – are being followed up with the necessary changes to core business strategy and innovation needed to deliver on a business’s promise to people and society. However, I do believe that a vital shift is happening as more and more businesses, and leaders, recognise the need for purpose. A shift to a world where business is conscious about its impact on people, society and planet. Moreover, part of this is publicly sharing your purpose as an organisation, and welcoming the scrutiny that results.
So what does a ‘good’ purpose look like?
In some ways purpose statements are just an early stage – but admittedly very public – in this transformation for any business. However, setting one is a key focus for many who want to drive a more purpose-led business. The worries about purpose-wash highlight some of the key characteristics for a purpose statement – the need for it to be authentic, as well as inspiring and practical. Purpose should describe why the business exists and how it benefits society, rather than be just a description of what the business does.
The purpose should be conscious and intentional about the potential and the well-being of all of the people affected by the business (employees, customers, suppliers, communities and future generations) in a manner that produces profitable outcomes, a better society and a healthy planet.
The purpose is a long-term aspiration and sense of direction and should be reflected in the company’s strategy and core business. In order to give a sense of what success might look like it is helpful to sketch a picture of what the outcomes of the purpose might look like and what is necessary to achieve it.
There is no one way to have a purpose and it will also differ if it is to be the originating purpose of a new organisation or a purpose for an organisation with a history. For the former it will be about what the organisation aspires to achieve/stands for and will be a distillation of the passion for starting the business that comes from the founder(s). For an existing business, it remains about aspiration but may benefit from recalling the original reason for starting the company or recalling a time when the company was at its most respected, successful or sought after.
A purpose should be:
- Inspire people both within and outside the business
This might be visible in engaged and innovative employees, loyal customers and suppliers contributing to innovation, receptive communities and regulators, future employees and customers wanting to be associated with the organisation, and a more stable and prosperous society
- Reinforce the connection the between the business and society
The beneficial outcomes sought are clear and it is possible to imagine the better world that results. Also, they are not just designed to make the people in the organisation feel better about themselves and be in a successful business from which they will benefit – society and others are not just a means to that end.
- Provide the strategic direction for the company
If the purpose is too broad, as to accommodate any decision, then it is difficult for it to be seen to be embedded in business decision making.
- Enable people to make practical choices day to day, and act as a constant reference point
The intended outcome should be clear enough to enable people in the business to make choices, for example about what products and services are produced, what the company might stop or start doing, what assets are acquired, retained or disposed of, and what behaviours and outcomes are encouraged and rewarded.
- Connect what the organisation believes, says, means and what it actually does
This is a judgement between what is said and what the organisation is actually known for. It is also likely to be affected by the perception of how deeply embedded the purpose is rather than a short-term or reputation-improving initiative.
- Enable scrutiny of the alignment between the purpose and actual performance
Indicators might include: is the vision, goals and strategy consistent with the purpose? Where is the purpose mentioned, how prominent/easy to find is it and how central is it to the business? E.g. is it easy to find on the company’s website and accounts, is it mentioned only in CSR and recruitment, and is it mentioned in the CEO’s speeches, Board meetings, investor updates, and external campaigns beyond the company, recruitment, induction and leadership development?
Fundamentally a business’s purpose will be defined by real actions and behaviours. Clichéd though this sounds it remains a journey, so putting purpose into practice – into every decision made – may not be perfect every time. The important step for every business is to translate its statement of business purpose into what a company does and why it does it – and the best purpose statements act like a roadmap to help them achieve this.
Want to learn more? ‘How and when to engage with consultancies in creating a #purpose statement is a topic that often comes up in conversation with the companies we work with’ , in this recent blog Dee Corrigan, Head of Corporate Engagement at Blueprint, explores more about Overcoming the pitfalls in developing a purpose statement