What’s all the buzz about a purpose-driven business strategy?
On our website, we define a purpose-driven business strategy as one focused on making a difference and achieving conventional measures of success.
There is evidence that purpose-driven business organizations are more successful than others. According to an October 2019 article in Deloitte Insights, “Purpose-driven companies witness higher market share gains and grow three times faster, on average, than their competitors, all the while achieving higher workforce and customer satisfaction.”
The article goes on to say, “Much like what a foundation is to a house, a conductor is to an orchestra, and a canvas is to an artist’s masterpiece—a clear purpose is everything to an organization. It is an organization’s soul and identity, providing both a platform to build upon and a mirror to reflect its existence in the world. It articulates why an organization exists, what problems it is here to solve, and who it wants to be to each human it touches through its work.”
Many SMEs are missing out
We’ve looked for stats on how many small and medium-sized business organizations have actually articulated their reason for being... their purpose. Not surprisingly, we haven’t been able to find any. So, we’ve had to guess and our guess is “very few.” If we’re right, a huge number are missing out.
At the same time, we’d bet that quite a few have a mission statement. As one CEO told us, “We spent time writing a mission statement that captures the essence of what we do. It helps our staff, particularly new hires, understand the business we’re in. Is there any value in having a purpose statement as well?”
An organizations purpose is never fully achieved
A mission statement offers a succinct description of what an organization does. It captures the ‘what,’ 'how,’ and ‘for whom.’ Along with goals and objectives, there is an expectation that a mission will be fulfilled.
A purpose statement explains ‘why’ an organization exists. Its role is to guide decisions, both strategic and operational, while inspiring creativity and innovation.
David Packard, co-founder of Hewlett Packard, did a great job of putting purpose in
perspective. “…why are we here? I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company's existence, we have to go deeper and find the real reasons for our being… Purpose… should not be confused with specific goals or business strategies… Whereas you might achieve a goal or complete a strategy, you cannot fulfill a purpose; it's like a guiding star on the horizon—forever pursued but never reached. Yet, although purpose itself does not change, it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress.”
Comparing Amazon’s purpose and mission
Amazon's purpose is, "To empower anyone to buy anything, anywhere, anytime." It’s broad and specific at the same time. It gives management the flexibility to pursue a wide variety of goals and strategies as long as they are faithful to the purpose.
Amazon was launched in 1995 with the mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavours to offer its customers the lowest possible prices.” This mission has now expanded to include Consumers, Sellers, Content Creators, and Developers & Enterprises, each group with different needs. The focus is on meeting those needs through solutions that make things easier, faster, better, and more cost-effective.
Amazon’s mission is more specific and focused on what’s happening today. And, while this mission will undoubtedly continue to change as the enterprise’s circumstances and business environment change, its purpose – its guiding star – will endure.
The great purpose statement match game
Here are 10 purpose statements often cited as good examples of what a purpose statement should look like. Without looking at the answers below the statements, try guessing the owner.
Remember, in addition to being clear about why an organization exists and serving as a filter for operational and strategic decisions, a well-thought-out purpose statement should be both aspirational and inspirational.
Do these purpose statements do the job? We’d love to find out what you think. Email us your thoughts at info@StrategicDirections.ca.
To help people save money so they can live better lives.
To create a better everyday life for the many people.
To inspire and develop the builders of tomorrow.
To nourish families so they can flourish and thrive.
To enable and improve e-commerce for merchants globally.
To unite the world through sport to create a healthy planet, active communities and an equal playing field for all.
To help people to belong anywhere.
To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
To entertain the world.
To accelerate the planet’s transition to sustainable energy.
1. Walmart 2. Ikea 3. Lego 4. Kellogg’s 5. Shopify 6. Nike 7. Airbnb 8. Starbucks 9. Netflix 10. Tesla
One final note
If you check up on these statements, you’ll find that some are referred to as a “mission” statement on the company’s website.
Purposeful mission statements seem to be all the rage at the moment. However, in our opinion, a mission statement and a purpose statement have different roles and should be different.
And that is a subject for another post!