This page is a work in progress, part of a multi-year effort to capture and share learnings, frameworks, tools, and processes to run organizations. See Running Organizations for more.
What Is Purpose In Organizations?
What Is Purpose?
Purpose is about why you do what you do. Why do you exist? That's your purpose.
Most organizations are clear on what they do and how they do it. They're clear on what makes them different. Purpose is answering a deeper, more existential question - why do you do it?
"Very few people or companies can clearly articulate WHY they do WHAT they do. By WHY I mean your purpose, cause or belief - WHY does your company exist? WHY do you get out of bed every morning? And WHY should anyone care?" - Simon Sinek (Source: Start With Why)
Purpose For Organizations and People
Organizations Need Purpose
You can't know if you're succeeding if you don't know what your purpose is. Purpose helps people understand that what they're working on matters to the world - we want to feel like we're making impact.
"Without a defined purpose you cannot determine whether your system is functioning well, poorly, or not at all. Without a clear purpose, you won't know how to improve or redesign the system." - Peter Scholtes (Source: The Leader's Handbook)
Defined Early Enough
In a newer, smaller organization, people are held together through tribal bonds - just knowing one another and working to accomplish something together is often enough. In early-stage startups, ongoing survival is enough.
When an organization hits a certain size, say ~ 20 team members, the bonds are less strong, people specialize in roles (and therefore can impact fewer things), and there seems to be greater demand for more formalized Purpose (along with Mission and Vision).
People Need Purpose
To accomplish anything significant requires hard, constant work. To work in that fashion, people need to see a match between a personal purpose and how they spend their time at work.
"The way we find meaning in our careers is by seeing a clear connection between our personal purpose and how we spend our time at work. When we have that alignment, purpose becomes a way to understand the contributions we make to both our company and to society as a whole." - Jack Altman (Source: People Strategy)
Purpose helps people persist through toil - through difficult, time-consuming, laborious work because they value the outcome of it. Any sufficiently meaningful work is hard. Keeping the purpose front-and-center helps us to continue on.
Understanding your personal purpose can start with answering what purpose your job/role serves. What output does your work produce?
"What do you do for work?’ is a question answered with activities, which makes our jobs sound inconsequential. A surgeon scrubs, cuts and sutures. It's a confusion between activities and outputs (a healthy patient)." - Andy Grove (Source: High Output Management)
Why Should Organizations Have Purpose?
Purpose Draws People to You
Having clarity of purpose and promoting that purpose can draw like-minded people to your organization. That can help in recruiting and landing new business.
"When you start with WHY, those who believe what you believe are drawn to you for very personal reasons. It is those who share your values and beliefs, not the quality of your products, that will cause the system to tip." - Simon Sinek (Source: Start With Why)
Bringing like-minded people who share your vision, values, and beliefs can help drive culture in a positive direction, especially in a young organization.
Purpose Creates Energy
Having a Purpose that matters to a group, that they believe in, brings energy to a group. Conversely, when Purpose is distant from our day-to-day work, we experience inertia. Inertia leads to worsening performance over time.
"With inertia, your motive for working is so distant from the work itself that you can no longer say where it comes from - you do what you do simply because you did it yesterday. This leads to the worst performance of all." (Source: Primed to Perform)
Higher Purpose Creates Enduring Organizations
When times get tough and the chips are down, having a Purpose that keeps a group tight-knit, that creates energy, can help organizations endure. This New York Times article covers a 1,020 year-old shop in Japan:
"To survive for a millennium, Ms. Hasegawa said, a business cannot just chase profits. It has to have a higher purpose. In the case of Ichiwa, that was a religious calling: serving the shrine’s pilgrims."
How to Establish a Clear Purpose
Crafting a company Purpose or a personal purpose isn't about stringing together some high-minded words, but asking "why" questions until you've discovered a why that is personal and real.
Questions to Ask
- What is our reason for being?
- What will be different if we succeed?
- Whom do we serve? Who is our customer or user?
- What is meaningful about our work?
- What measures will help us steer?
- How does our purpose help us make decisions?
- What are we unwilling to compromise in pursuit of our goals?
- Can our purpose change? If so, how?
Write From The Customer's Point of View
An internally-focused Purpose isn't necessarily bad. Here’s one:
Ultimately, a Purpose that is framed from the customer's point of view is more powerful. An HR/People Success department could use a Purpose statement like the one from HD Supply Holdings as a department Purpose, but a company-wide Purpose should generally be more customer-oriented.
"Rather than simply describing your products and services, describe the benefit or capability your customers acquire as a result of interacting with you. Your purpose is related to these benefits and capabilities that accrue to your customers." Peter Scholtes (Source: The Leader's Handbook)
Focus on Why, Not What, and How
The easiest way to assess a purpose statement is by asking if it answers a "why." Lots of company purpose statements are made up of lists of objectives and intentions for the future but don’t explain why those objectives matter.
A Process to Follow
- With your leadership team, ask the simple question: “Core Purpose: Why does this organization exist?”
- Before any answers are verbalized, give each leader a 2×3 pad of sticky notes and ask them to write down their answer.
- When all leaders have written their answers, have each leader share their answer and post it on a whiteboard or easel, grouping answers that are similar.
- Once all have presented their answers, look at them and discuss what the Core Purpose of the organization should be.
- This may end up in draft form, or you can ask a volunteer to take a picture of the sticky notes to write a Core Purpose to bring to the next meeting.
Purpose Examples
Corporate Purpose Statements
- American Family Insurance: we’re dedicated to inspiring, protecting and restoring your dreams — because we believe a dream is the most valuable thing you’ll ever own
- AT&T: Inspire human progress through the power of communication and entertainment.
- Corteva: To enrich the lives of those who produce and those who consume, ensuring progress for generations to come.
- Dick’s Sporting Goods: We create confidence and excitement by personally equipping all athletes to achieve their dreams.
- eBay: To empower people and create economic opportunity for all.
- Ecolab: To make the world cleaner, safer and healthier – helping businesses succeed while protecting people and vital resources.
- Expedia Group: To bring the world within reach.
- Foot Locker: To inspire and empower youth culture
- Ford Motor Co.: To drive human progress through freedom of movement.
- General Electric: We rise to the challenge of building a world that works.
- Harley Davidson: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul.
- Hewlett Packard Enterprise: To advance the way people live and work.
- Intel: To create world-changing technology that enriches the lives of every person on earth.
- Kroger: To feed the human spirit.
- Molson Coors Beverages: Uniting people to celebrate all life’s moments.
- Phillip Morris International: To deliver a smoke-free future. OR IS THIS A VISION?
- Patagonia: Patagonia is in business to save our home planet.
- Ralph Lauren: Inspire the dream of a better life through authenticity and timeless style.
- Starbucks: As it has been from the beginning, our purpose goes far beyond profit. We believe in the pursuit of doing good.
- Target: To help all families discover the joy of everyday life.
- United Airlines: Connecting people. Uniting the world.
- Square: Everyone should be able to participate and thrive in the economy.
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