What is the Purpose of Your Company?
Can you recall why your firm was originally founded and why it got its first customers? Is that purpose still the guiding principle? Or has your company evolved and found its true place in the world over the years? In any case, understanding your company’s purpose is essential to your strategy. It is the magnetic north of your strategic journey.
A good purpose statement places the customer in the center. A company exists because there is a problem or need that customers have, and the company has a solution that the customer prefers. The company has something unique that it can utilize for the customers’ benefit. Statements like “We are an engineering company” or “We are a design and build firm” do not say anything about your purpose. As Cynthia Montgomery writes in The Strategist: Be the Leader Your Business Needs, the acid test of a purpose is this: Will it give you a difference that matters in your industry?
Having a clear picture of the company’s purpose it essential. It established meaning for today. It is also the starting point of strategic planning.
What is a company’s purpose statement?
A purpose gives answers to these key questions:
- Why does our company exist?
- Who are our customers and what values and qualities they have in common?
- What would the customers miss if we were not around?
- What sets us apart?
What makes an effective purpose?
Consider the following characteristics when defining your company’s purpose:
A good purpose is ennobling and inspiring. It makes a firm’s endeavors noble or dignified. It is inspiring to all stakeholders. It communicates on an emotional level, which is essential to most individuals. People crave meaning in life and work.
A good purpose says what you do (and what you don’t); it puts a stake in the ground.
A good purpose sets your company apart and makes you distinct. The difference may arise from many sources: innovation, business models, deep insights about specific client needs, technologies, management, and so on. Try to imagine how your customers see or will see the difference.
Most importantly, a good purpose sets the stage for profitable and growing business.
Examples of purpose statements
Here are examples of purpose/mission statements of selected Fortune 500 and Inc 500 companies. Not all of these are great examples, but give you an idea of the many ways you can express a company’s purpose.
“Our purpose is to enable individuals and businesses to manage financial risk. We provide insurance products and services tailored to meet the specific and ever-changing financial risk exposures facing our customers. We build value for our investors through the strength of our customers’ satisfaction and by consistently producing superior operating results.”
– American Financial Group, INC
“Use our pioneering spirit to responsibly deliver energy to the world.”
“We will be the easiest pharmacy retailer for customers to use.”
– CVS Corporation
“Dole Food Company, Inc. is committed to supplying the consumer and our customers with the finest, high-quality products and to leading the industry in nutrition research and education. Dole supports these goals with a corporate philosophy of adhering to the highest ethical conduct in all its business dealings, treatment of its employees, and social and environmental policies.”
– Dole Food Company
“For Our Customers A compelling place to shop. . . by providing convenience and low prices
For Our Associates A compelling place to work. . . by providing exceptional opportunities and rewards for achievement
For Our Investors A compelling place to invest. . . by providing outstanding returns”
– Family Dollar Store
“We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.”
– Ford Motor Company
“Our goal is to achieve customer satisfaction through excellence in design, supply chain management, manufacturing and repair solutions. Through our culture, our drive and the expertise of each individual employee, we are uniquely positioned to provide best-in-class services to a global customer base.”
– Jabil Circuit
“To help companies better connect with their customers online by managing and measuring each customer’s experience with the company producing actionable information and results.”
– Customer Feedback Solutions
“Enlightened, Inc. is a full-service Information Technology (IT) consulting firm that helps our clients solve complex business problems by leveraging technology. We are committed to being the best through our professionalism and by keeping the interests of our clients first. We strive to ensure our services are a cost effective alternative.”
“To bring inspiration and innovation to every athlete in the world.”
“The BMW Group is the only manufacturer of automobiles and motorcycles worldwide that concentrates entirely on premium standards and outstanding quality for all its brands and across all relevant segments.”
“Google’s mission is to organize the world’s information and make it universally accessible and useful.”
Who’s responsible for the purpose?
Cynthia Montgomery states in The Strategist that strategy and leadership must be reunited at the highest level of an organization. The CEO, according to Montgomery, should be the guardian of organizational purpose. It is the CEO who must make sure that the purpose is clearly stated, and everyone in the organization knows and understands it.