The Purpose of Purpose in Business

By September 7, 2016 Business

In a speech on September 12, 1962 President John F. Kennedy inspired the nation with an audacious challenge:

“We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard.”

Tragically, JFK was assassinated just 13 months later, yet his death did not derail the country from accomplishing its newfound purpose. Less than seven years later, Neil Armstrong and Buzz Aldrin landed on the moon.

Purpose is Powerful

Purpose is a powerful force that inspires action and unites people to combine their abilities toward a cause greater than themselves. Purpose makes the impossible possible and it can literally move mountains. A mounting body of research is making a convincing case that purposeful business leads to outperformance.

IMD business school found that a strong corporate purpose can impact financial performance by as much as 17%. Raj Sisodia in his book, Firms of Endearment, found that purpose-driven companies outperformed the S&P 500 by a staggering 10x. But purpose can impact more than the bottom line.

A joint Harvard Business Review and EY survey found that 89% of executives believed an organization with shared purpose will have higher employee satisfaction. A 2015 Imperative study agrees having found that purpose-oriented workers are 64% more fulfilled.

If purpose is so beneficial, why is it mostly absent from the marketplace?

Profit ≠ Purpose

The simple answer is that most companies are driven by the almighty dollar. In a famous 1970 NY Times Magazine article, Noble Prize winning economist Milton Friedman stated, “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” He called executives who pursue more holistic strategies, “unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” Fifty years later, Friedman’s theory is still infecting business. The good news is that there is a growing movement of conscious entrepreneurs and executives who recognize that purposeful companies are the future.

How to Find Organizational Purpose

As companies like TOMS and Warby Parker have proven, purpose can be good business. So how does an organization identify its purpose? Companies use the words “vision,” “mission” and “purpose” interchangeably, but they are actually quite distinct.

Vision is the finish line; it describes the desired future state that the organization is working towards. Vision answers the question, “Why does the organization exist?” Mission is the path the organization takes to reach the finish line. It answers the question, “How will the organization reach the finish line?” The Purpose of an organization encapsulates both its Vision and its Mission. A purpose statement is a hybrid statement that describes the organization’s Why and How. Let’s take a look at a few examples:

Google’s purpose is to “organize the world’s information and make it universally accessible and useful.” Google’s Why is to “make [information] universally accessible and useful” and its How is to “organize the world’s information.” Facebook’s purpose is to “give people the power to share and make the world more open and connected.” Facebook’s Why is to “make the world more open and connected” and its How is to “give people the power to share.” Sorry folks, but all Mark Zukerberg’s pledges toward privacy are minor speed bumps in his ultimate goal to create a more open and connected world.

At BraveWave, we help clients identify their purpose using an idea generation technique that has its roots in design thinking. We ask team members to describe ideas related to the Why and How of the organization on individual Post-it Notes. We gather the Post-It Notes on the wall and organize them into distinct concepts related to the Why and How. Through probing questions, we converge on a purpose statement that identifies the organization’s finish line and outlines the path the organization will take to reach it.

In our experience, the best vision statements (Why) are centered on an object that the organization is attempting to change in some way. Oxfam’s vision is “a just world without poverty,” while Habitat for Humanity’s vision is “a world where everyone has a decent place to live.” In both cases, the organizations are planning to change the world, but the change object in a vision statement doesn’t have to be so grand. It’s perfectly acceptable to target a single country, city, community, neighborhood or city block. The change object doesn’t even have to be a place; it can also be an industry like “food & beverage” or a concept like “technology.”

In a purpose statement, the mission (How) usually follows the vision (Why). A bridge like “by,” “through” or “so” often connect the two statements. “And” is also common, although we believe it is less effective because it loses the hierarchy of the statement, placing the Why and How on the same level. The mission anchors the purpose in reality. It clarifies the distinct path that the organization plans to take on its way to the finish line.

Authenticity and Purpose

The key to any purpose is authenticity. Customers and employees can sniff out a lack of authenticity a mile away. Real purpose oozes from every crevice of the organization. It drives decision-making and is woven into the very DNA of the company. Real purpose drives behavior and attracts customers. As Simon Sinek said in his best selling book Start With Why, “People don’t buy what you do; they buy why you do it.”

Note: Google and Facebook call the purpose statements referenced above “mission statements.” For simplicity sake, we do not use this terminology because the statements answer both Why and How instead of just How.

Photo Credit: Elke Peterson (cropped)



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