I interact with several business owners & CEOs in course of my work and one thing that I always try to find out is what the company has to say about its purpose-vision-mission-values. It tells me a lot about the company.
Let us first try to understand this concept from an individual’s perspective. I have seen from experience that great people who have made a huge difference to the world have always been driven by a sense of purpose, they had a vision, they worked towards it with a missionary zeal and were guided by a set of values. An individual without any purpose in life, without any vision and values hardly contributes to the society, nation or humanity and leads a meaningless existence.
How does this analogy apply to an organization?
An organization is nothing but a collection of individuals. It is possible that when an entrepreneur starts the business, the purpose may be to be one’s own boss, to earn more money or something else. However, the real purpose of business must go beyond that and the sooner a company discovers it, the better it is. Peter Drucker, the famous management guru has said in his book “The Practice of Management” that profit cannot be the purpose of any business, the purpose of business is to create a customer.
It is suggested that a business should be started with a purpose. While defining the purpose of any business, we should get answer to the question “why does the business exist”? A company might exist without answering this question, it may also earn profits based on market conditions, but the existence is meaningless if there is no benefit to the society, nation, or humankind. This is like an individual who lives life without any purpose.
Having a purpose for your business is also essential for growth, customer & employee satisfaction, and sustainability.
As per a study by Deloitte1, Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.
Purpose driven companies also evolve faster than others as per this article published in Forbes2
Some examples of companies with a great purpose statement:
“We fulfil dreams of personal freedom – it’s our purpose, and we take it seriously. And while freedom means different things to different people, it is a bond that brings Harley-Davidson customers, employees, dealers, suppliers and enthusiasts together.”
Whole Foods Market
“Our purpose is to nourish people and the planet.”
“To connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.”
Once the purpose has been discovered/identified/defined, the next thing that is needed is “Vision”. When the reason of existence for the business is clear, we should be clear about where we want to go.
Vision is what you see for the company in future or where you see the world in future because of work done by your company. It is always about tomorrow. You can define your vision by answering questions like “what are my dreams and aspirations”? “What problems in the world are we going to solve”? “What will be the impact on humanity”?
Lack of vision is akin to a ship in an ocean not knowing its destination. In that case, it will be driven by the waves and reach an undesirable destination. Likewise, in business, a company without vision will be driven by market forces and end up as a loser.
Some examples of companies with great vision:
“Our vision is a world in which all people’s basic needs—such as shelter, clean water, sanitation, food and reliable power—are fulfilled in an environmentally sustainable way and a company that improves the quality of the environment and the communities where we live and work.”
“To provide access to the world’s information in one click.”
“To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.”
After the vision has been defined, we need to identify and define the mission. Mission is all about what is to be done today to achieve the vision. It answers questions like “What do we do regularly”? “How do we serve our customers”? It is what we do consistently without any compromise. It is a commitment that we make to ourselves and to our customers.
Clarity on a company’s mission helps employees work together as a team and focus on the common goal. It also reduces the communication gaps that exist between departments and gets rid of silo effect.
Some examples of companies with great mission statement:
“To enable economic growth through infrastructure and energy development, and to provide solutions that support communities and protect the planet.”
“To organize the world’s information and make it universally accessible and useful.”
“We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.”
After defining the mission, we need to define the values for doing business. Values are the guiding principles on which there is no compromise whatever may be the market situation. They are like the compass in a ship, which always shows us the correct direction. If the captain of the ship decides to ignore the directions shown in the compass and sets course in a different direction, the ship will never reach its destination. Likewise, a CEO or business owner compromising on the values of the company for short term gains, is harming the interests of the company, leading to its failure in achieving its vision.
Examples of great values can be “Integrity”, “Accountability”, “Commitment”, “Fairness”, “Transparency” etc.
The most important aspect of purpose-vision-mission-values is that these must be top driven. The owner/CEO must define them clearly and ensure that they are shared with every single employee in the company.
The CEO should believe in them and ensure that the statements do not exist as mere statements to be displayed on the wall, website, or marketing collaterals. They are to be lived in practice by every employee.
Success is then bound to follow.