A strong corporate purpose requires a stable and substantive foundation. By contrast, poor purpose statements come across as meaningless combinations of repetitive phrases. Getting purpose development right means digging into the details and considering the perspectives of multiple stakeholders.
A purpose statement is usually little more than a simple phrase. And one that sounds like it has been written in a rush in order to appeal to young applicants and responsible customers, or to simply pay lip service to the idea of making the world a better place. The purpose goes something like, “We are making the world a better place”. Or, “We are building a better future.” It mentions something about the future, generations, sustainability or the world.
Yet, purpose is about far more than marketing or employer branding. Purpose is becoming a constant in an environment that is changing faster and faster with more and more new possibilities and increasingly rapid technological advances. It reflects the fact that society has long expected more from a ‘good’ company than just generating jobs and profit – and its expectations will continue to grow in the future. How can a policy-maker assume that support for this specific company will generally be welcomed by citizens? How can a fund manager rely on the fact that the company will still be in demand on the market in twenty years? Why will an employee remain proud to work for an organisation despite the fact that its business model has changed radically?
Purpose is the common thread running between external expectations and the unique inner values, attitudes and traditions of an organisation. It specifically answers the question of why the company exists. At least implicitly, it also reflects what exactly the company does and what sets it apart from others.
This is why quickly adopting a run-of-the-mill formulation would be disastrous. Such phrases are clearly interchangeable. They give the impression that the company could be replaced by the next best competitor.
What should you do instead?
One of the key challenges of purpose development is to meet the expectations of multiple target groups. Customers, journalists and even established critics need to be convinced just as much as investors, business partners and suppliers. The most experienced employees should be represented as much as the next promising applicant. And, needless to say, everything has to be compatible with the business model, strategy and corporate activities.
When it is understood correctly, the purpose development process combines different perspectives.
- Executive Board and strategy
The authority to set guidelines is always the first top priority. The Executive Board knows internal and external stakeholders just as well as the business model and strategy. It can therefore offer the most precise impact. Whether or not with the cooperation of the strategy and communication departments, it also sets the guidelines for the further development process.
- Managers and employees
It is imperative that staff are involved in this development process. What inspires them? What do they want? What drives them? It is worth listening to them carefully. The most valuable insights are often those that are expressed anonymously during informal conversations.
- External stakeholder groups
Both perspectives from inside the company – Executive Board and strategy on the one hand and employees on the other – are balanced with the expectations of external stakeholder groups on a continuous basis. What are their expectations? What do they really know about the company? And what false perceptions need to be tackled?
This process clearly requires care, diligence and time. Only a clever combination of multiple formats, such as Executive Board workshops, qualitative interviews and data analytics, can provide truly valuable insights. It is certainly worth the effort. Those who get purpose development right will have more than just empty phrases at the end of the process. Developing a strong purpose involves gaining a better understanding of the company and its stakeholders. There should be evidence and facts available to support the purpose statement at all times and to substantiate it easily on the basis of the strategy and business model.
The purpose statement itself is a compact, condensed positioning point. It is the cornerstone of a stable substantive foundation made up of a compelling programme and clear messages to ensure maximum impact instead of empty slogans.