Many organisations publish their mission, vision and values statements but what is the purpose?
The question above is actually two questions:
- The obvious one of “what is the purpose of a mission, vision and values statements?”
The second is perhaps more interesting:
- What is the “purpose” of an organisation and how does this differ from mission, vision and values?
Let’s first define some terms:
Vision: The vision is your destination, it’s the aspiration, it’s future focused and usually describes where you want to get to and what success will look like – it’s about a future that does not yet exist.
Mission: The mission statement is your vehicle, it’s the perspiration, it’s the plan to achieve the vision, focused on the here and now. It usually describes what you do and what you get paid for and it often attempts to set you apart from your competitors.
Values: Values statements serve as a framework to guide the daily actions and decisions; they represent the standards by which staff will be measured in all individual and collective actions. Most organisations will, understandably, be committed to achieving their goals, but how they go about achieving them is equally, if not more important, than the mission and vision themselves. A company’s values are “The principles that guide behaviour at work”.
The gap
It seems to us that with the above (pretty common) definitions there is no direct reference to the customer and the benefits and capabilities that a company’s products and services deliver to its customer or client base.
And we think it is critical that this omission is addressed.
The “purpose” of an organisation
This gap has been referred to by some management thinkers as the organisation’s purpose, intent or aim, we tend to prefer the word purpose. Essentially, what we are looking to establish is:
- WHY you do what you do
- Specifically, what does the customer get as a result of your endeavours; what are the benefits or capabilities that they get from the products or services you provide?
This is often a difficult question to answer as most of us tend to focus on what we do rather than how our product or service helps the customer within their environment; this focus on what we do has more relevance for the mission statement.
In perhaps its simplest terms, do you really want a “drill” or, more accurately, are you really looking for a hole and the drill is simply a means of obtaining a hole? More accurately again, you are not really looking for a “hole”, you are really wanting somewhere to place your books and trinkets and you need the hole to fix the shelf. Most of us tend to focus on the fact that the company makes drills when what we really need to focus on is the organisation’s PURPOSE defined from the customer’s point of view.
We might also take another little segue at this point a lot of people especially finance people so the purpose of the company is to make a profit – we’d say not so. Profit is an absolutely necessary condition for a firms survival, but making a profit should not be confused with an organisation’s purpose. Just as breathing oxygen is a necessary condition for you, or me, to survive, neither of us should presume breathing oxygen is our purpose. Oxygen is to a human as profit (or, probably, more accurately) cash flow is to a business.
The purpose of the “purpose”
The purpose of a purpose statement is to:
- Provide a goal for the operational processes delivering value to the customer.
- Unleash innovation in order to better deliver those benefits and capabilities delivered to the customer.
There is a guy called Simon Sinek has written an excellent book called “Start with Why” – well worth a read. If you have not got time to read, then I’d suggest looking at the 5 minute or 20-minute videos on YouTube.
He suggests that all inspiring leaders think the same way, all he did was codify how – he’s called it the golden circle. He suggests, it’s the difference between why some companies inspire and others don’t. Most of us communicate from the outside in, the clearest thing to the fuzziest thing. However, he is suggesting inspired leaders think, act and communicate from the inside out, he comments that:
- All organisations know what they do
- Some know how they do it
- Very few know why
So, if you can get to the why, that is the purpose of the organisation and communicate it. Where the purpose is defined as benefits and the capabilities that are delivered to your customers and clients, the better you can engage with them.
The power behind this “inside out idea” – why first, what last, is that it replicates how our brains work. Because of this, we get much more of an emotional engagement, because concentrating on “why” takes us to a point where we are no longer concentrating on “selling products and services”, but instead we are helping to solve a problem – the clients problem.
Now let’s flesh out the point with a couple of examples:
Blockbuster Video
Founded in 1985 on the wave of then current new technology, videos, Blockbuster built its success around something called “depth of copy”, the trade term for offering more new releases than the competition. It managed the transition from video to DVD easily as people still had to go the shop to view, chose and take home the product. The company grew aggressively and at its height Blockbuster had almost 50% share of the US’s huge home rental market. But then, in an all-too-common tale of ignorance and arrogance, it ignored a tiny upstart with a different business model.
Just before the turn of the century a new model to rent content was launched. Netflix offered a subscription service in which customers could order DVDs over the phone or internet and have them delivered. Soon after they added a ‘net based streaming service. By 2003, Netflix had over a million loyal customers and a 95% share of the online DVD rental space in the US. At this point, Blockbuster had an established customer base of nearly 50 million customers.
It was 50 times the size of its upstart rival and openly contemptuous of the Netflix and internet threat.
What Blockbuster “did” was rent videos and DVDs. In our view, its purpose, “the benefits and capabilities delivered to the client base” should have been articulated as something like “providing entertainment and education to customer’s, on a platform of their choosing, at a time of their choosing”. If they had focused on this and used it to drive better ways of achieving the same aim, we believe they would have both seen, and reacted to, the Netflix and internet threat.
The Blockbuster Goliath got taken out by the Netflix David simply because it did not properly articulate, or concentrate on, the benefits and capabilities delivered to its clients – its purpose.
Kodak
It was only after Kodak, one of the most iconic and respected brand names, filed for Chapter 11 (a process which, in America, protects an organisation while it attempts to restructure in an effort to avoid bankruptcy) that I learnt that it was Kodak who invented the digital camera, the product that eventually played a large part in the company’s down fall.
Kodak was an industrial giant. In 1976, it had 90% of film and 85% of camera sales in the USA and was regularly rated one of the world’s five most valuable brands. It’s almost inconceivable that a company as large and successful as Kodak could disappear.
If you were to interview a cross section of Kodak’s customers, you would probably find that they are not in the slightest bit interested in the fact they made cameras and film. They are probably interested in better ways “to capture and share memories”. This short statement could have been Kodaks purpose – this short statement, or something similar could have potentially saved them.
We now all carry phones which have some spectacular camera’s incorporated. We never used to carry cameras to the extent we carry phones.
What we do vs. purpose
In order to flesh out the ideas around purpose in more detail we have created a table for a number of different organisations and companies comparing and contrasting the difference between what is done and what their potential purpose might be:
| Organisation | What is done | Potential purpose – the ‘WHY’ |
|---|---|---|
| Carburettor manufacturer | Makes carburettors | An efficient air fuel mix is put into an internal combustion engine |
| School | We teach children (to pass exams) | The benefit to our students is a quest for life long learning |
| Library | We loan books (and other items) | We satisfy the desire for literature and learning |
| Rolls-Royce | We make prestige cars | The ability to travel in luxury in your own vehicle |
| Security company | We provide security and protection services | People and assets are protected |
| General architectural practice | We design buildings | Clients are delivered better places in which to live, work, shop, learn or in which to just to meet one another |
| Eminent architect | We design buildings | Clients get award winning, prestigious and innovative buildings in which to work |
| Sustainable architectural practise | We design buildings | Our clients can claim they have reduced their environmental impact with leading edge, low impact, sustainable building solutions |
So what?
We believe the purpose is critically important as it determines the organisation’s boundary and its processes. The reasons for including three different aims for architects in the above table is to show that organisations undertaking similar work may have dramatically different aims which can directly and dramatically impact on the processes employed. You can imagine the focus of activities and the processes employed in by the eminent architect are radically different to those employed by the sustainable architectural practice.
Like, but different to, an organisation’s mission or vision statement, the purpose of the organisation should motivate and direct people in the organisation in pursuit of a common goal; it has been suggested that the questions required to “test” a purpose are:
- Does the purpose reflect customer wants and desires?
- Is what the purpose suggests worth doing?
- Does the purpose reach for the hearts and minds of people who work for the organisation?
- Is the purpose noble and does it serve the public?
Sadly, very few companies develop a purpose which meet these criteria so, by default, they don’t have a purpose which aligns the effort of people to the organisation. As a result, very few companies achieve their full potential.
Finally, another reason for articulating your company’s purpose is to encourage innovation. Innovation is critical to long-term prosperity and if you are focused on the benefits of and capabilities delivered to your clients:
- You can actively engage in innovation, which is just a fancy word for the activities that seek to find better ways of delivering those benefits and capabilities to your clients;
- Given that someone does invent a displacement technology (Carburettors/fuel injectors, Videos & DVDs / streaming, cameras/ smartphones or even lifts and escalators and the “beam me up Scotty machine”, unlike Kodak, Blockbuster and carburettor manufacturers, you’ll know it’s time to change track.
Conclusion
Essentially, what we are looking to do is create a small number of powerful mission, vision, values and purpose statements that, taken together, become your North Star – your guiding light.
People, and not just millennials, want to work for companies with missions and business philosophies that resonate with them intellectually and emotionally.
We fundamentally believe that the core question any organisation must answer when communicating its purpose starts with its customers: that is, what are the needs that the company is being paid to meet?
For centuries, theologians and philosophers have told us that seeking meaning is central to human experience, so it should actually be no surprise at all that Sinek’s TED talk “Start with Why” is the third-most-watched TED Talk of all time.
Staff are motivated to do their best work because of the role the company plays in society, not because it maximizes the wealth of a few directors, or in the case of quoted companies often thousands of nameless shareholders.
If you get this right they will, and they will want to, care about doing a good job for your customers:
- Give your people a North Star to aim at;
- Give your people a framework to behave within, and;
- Unleash their potential.
