A good purpose creates a long term aspiration and sense of direction, but only if it is reflected in the company’s strategy and decision making.
Crafting a purpose statement is simply a stage in a wider and longer process, rather than an end in itself – It is clear to anyone who has approached this challenge that there is no ‘one way’ to do this; it is rarely straightforward and is certainly not simple! Some companies we engage with take two to three years to define their purpose statement because they recognise the process they go through to develop the statement underpins a broader cultural shift within the organisation. For example, when Hubert Joly, was brought in to turn around Best Buy, he waited three years until he felt the culture change needed had taken root – see resources section for: Hubert Joly on leading with purpose and humanity
The process of crafting a purpose statement will also differ if it is 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, in combination with reflecting on how the needs of society have changed and what the same company is best placed to do now to solve problems and meet needs. For example, Unilever’s current purpose “making sustainable living commonplace” evolved from a statement by the founder, William Hesketh Lever, to make “to make cleanliness commonplace” in the 1890s.
Sometimes, the same company may go through a deep change of direction and decide on a purpose which is far removed from the original foundation whilst drawing on the heritage and inspiration.
The Dutch company DSM, transformed from a coal mining business to a science based company focussed on nutrition, health and sustainable living. They say the common thread is “turning our scientific and innovation power to tackling the greatest challenges faced by our society”.
Considerations in articulating your purpose
There are different ways of going about articulating your purpose but broadly a good process needs to have both an external and an internal element. The external one is essentially to ask “what could this business be in service of? How could it profitably benefit society over the long term?”. Using Colin Mayer’s general definition of purpose-led businesses can be a useful starting point:
..to profitably solve the problems of people and planet, and not profit from creating problems.
1. Context – One approach could be to start with contextualising how the business can contribute more to society in a positive way:
Thinking about context also helps to create an authentic link between the purpose statement, the strategy and long-term sustainable returns.
2. The internal element is about looking in rather than looking out. When businesses consider the benefits of becoming purpose-led, a powerful motive for change is the sense that there is unrealised potential in the business – in terms of potential innovation, in the latent ambition and capacity of people, in the quality of relationships with key stakeholders, and the potential partnerships and collaborations which could be created and nurtured. Engaging in dialogue to understand the latent desires and aspirations of people – not only employees but also other existing and potential stakeholders – is an essential step in imagining what the business could become by being galvanised by a shared purpose.
3. Whilst the purpose statement is important, it’s not the only output that really matters at this stage in the journey because the process by which a purpose is defined is equally vital:
We see in some organisations that the leadership team land on a purpose statement and then ‘consult’ the organisation and stakeholders. Still, really the consultation is surface level and not genuine, they are going through the motions. And don’t drown out the critics throughout the process, their responses can offer insights into the hard and messy work of reorienting a business to become purpose-led. For more on how to think about effective dialogue see Blueprint’s blog: Navigating dialogue in business
4. Finally, engaging with external consultants in the process of creating a purpose statement can be beneficial but it is not a substitute for the deep thinking and transformation that must happen within an organisation. This and other potential pitfalls are discussed further in: Avoiding pitfalls of developing a purpose statement