Why does your company exist?
And why knowing the answer to that question is important
A couple of weeks ago I published The hard truth about soft skills here on Medium. In it, I laid out a framework for founders designed to build a picture of the elements of leadership that are critical for growth — the 5 Ps. The initial article was a high-level overview and I promised to dive deeper into each element of the framework — which is where we begin today.
Let’s start with purpose. For some founders, a conversation about purpose is quick and easy because their company came into existence solely to solve a particular problem — then it’s simply a question of the best way to articulate it. For others, depending on the way the company began, it can be more challenging to uncover the true purpose.
Fundamentally, your purpose statement should answer the question, “why do we exist?”
Your purpose is the magnet to attract investors, customers and team members.
The purpose is often the reason why people choose to join your team. Often, it’s also the reason they choose to stay with you — even when things aren’t going great. If your team believe deeply in the reason behind your product or service, they’ll forgive a whole range of imperfections in company policies, processes and conditions.
Purpose forms the roots from which your company grows
Company values and behaviours inevitably sprout from purpose. While purpose establishes why you exist, values and behaviours are how you do what you do — the culture that emerges to match your why. It tells people “how things work around here” and what it means to belong. If the connection between purpose, values and behaviours is not clear, this will show up as dissonance in the relationships you have with your team and your customers. They both want to see a consistent connection between words and actions.
A great purpose is precise, aspirational, credible and perceived to be important…
- Precise in that it directly addresses the problem you’re focused on solving. Kiva’s purpose — “to expand financial access to help underserved communities thrive” provides a good example of a purpose that recognises the problem and the core of the solution.
- Aspirational in that it includes a big hope for the future, such as we see in Tesla’s purpose to “accelerate the world’s transition to sustainable energy” or Lego’s to “inspire and develop the builders of tomorrow”.
- Credible to the point where prospective customers and team members are convinced that you (rather than anyone else) will be able to make a contribution to solving the problem. Walmart, for example, exists to “ save people money so they can live better” — which is believable because of their relative market power and scale.
- Seen as important enough to make all the hard work worth it. Change.org, for example, exists to be “the world’s platform for change” and TED exists to “spread ideas”.
If I randomly called a member of your team and asked them about your company’s purpose, what do you think they would say? Would they be able to tell me? Would they speak of it with pride? Would they update me on the progress you’re making towards your aspiration? Could they tell me how their role connects directly to the purpose? If you answered no to any of these questions, perhaps it’s time to (re)focus on your purpose and take some time to talk with your team about it. And if you’d like some additional resources to help facilitate that conversation send me an email. I’d be happy to help.
Stay tuned for my next article where I’ll focus on people — articulating the skills and capabilities you need and finding the right fit. Till then, have a great weekend.
