The Company Promise Statement – Purpose

Why Are You Working?

Now that may sound like an odd and somewhat provocative question. However, let’s place the emphasis on this question on the first word: Why.

We all have reasons to work. For many, earning a salary sufficient to pay for their and/or their families’ living arrangements figures prominently on the list. In other cases, we may be driven by our personal or professional growth, desire for recognition, prestige, power or other reasons. In some rare cases, a person transcends more worldly concerns and pursues a greater purpose or calling, as was the case with, for example, Mother Theresa, Gandhi, Martin Luther King or Nelson Mandela. Often, those individuals move and inspire us. Extending that line of thinking further, all of the leaders of the world’s great religions and philosophies would also certainly qualify as having created a compelling and inspiring purpose given that the movements they created have inspired hundreds of millions, if not billions, of followers over thousands of years.

For most, simply having a reason to work is not enough. What we really want is a purpose. More than that, a compelling and inspiring purpose. Let’s break down what that means.

The key word here is clearly the noun “purpose”, which is defined as “the reason for which something is done or created or for which something exists”. Note that there is no value judgment in that definition. It simply is. You could have a positive purpose or a negative purpose.

That leads to our first modifier, “inspiring”. What distinguishes people or situations that inspire us versus those that do not? The word inspire is defined as to “fill (someone) with the urge or ability to do or feel something, especially to do something creative”. In short, being inspired moves us – emotionally and, ideally, in action.

And finally, let’s also look at the word compelling, which is defined as “evoking interest, attention, or admiration in a powerfully irresistible way”.

When we bring those three words together, we have that a compelling and inspiring purpose is a powerfully irresistible interest, moving us emotionally and in action, as a reason for doing something or bringing something into existence. Who wouldn’t want a bit more of that from their work and in their lives?

A compelling and inspiring purpose is a powerfully irresistible interest, moving us emotionally and in action, as a reason for doing something or bringing something into existence.

Life is short. Our scarcest commodity is our time. Where we invest the diminishing resource of our time is the ultimate economics decision of our brief lives here on Earth. How do we maximize the benefit and impact of that investment of our time, hopefully in a positive and constructive way? Having a compelling and inspiring purpose seems like a pretty good place to start

What is a Company Purpose?

Now that we have at least a basic philosophical and definitional underpinning of what makes for a great purpose generally, how do we – as business leaders – apply that thinking to a company in particular?

(Note: We have already seen that the word purpose can be positive or negative. Working under the assumption that no one wants to follow an insipid and uninspiring purpose, going forward in this post I am going to use the word “purpose” alone to signify “compelling and inspiring purpose”.)

,Gallup states that “a company’s purpose is a bold affirmation of its reason for being in business,” and “a company’s purpose is the driving force that enables a company to define its true brand and create its desired culture.” Porter Novelli / Cone define purpose as “an organization’s authentic role and value in society, which allows it to simultaneously grow its business and positively impact the world.” And Marc Nevins writes in ,Forbes that “the purpose of a company is to have a meaningful vision and then to be profitable in achieving it. And we should qualify ‘profitable’: profitability means long-term sustainable returns, and each word in that phrase is critical.”

All of these are useful definitions, and in particular Nevins’s focus on having a meaningful vision that generates long-term sustainable returns. In the simplest sense, I see a company’s purpose – ,borrowing from Simon Sinek – as its “Why”. Here are some good questions to ask yourself:

• • Why do you serve your customers?

• • Why do you love working at your company?

• • Why do you get up in the morning energized to go to work every day?

• • Why do you stay with your company?

• • Why do you refer other people to work with the company?

• • Why do customers stay with your company?

• • Why do your customers refer others to work with your company?

Coming up with a crisp answer to those ‘Why’ questions may not be easy but it is a worthwhile exercise to: 1) know what is the answer for yourself; and 2) align on that answer across the organization. Let’s say you asked those ‘Why’ questions at two different companies. Would you feel better about a company that has responses within a consistent general theme, or one with wildly divergent responses? Which set of responses would give you comfort that there was broad-based alignment that the company’s team members are collaborating with a common end in mind? And which set of responses would have you conclude that the company is more likely to survive and ultimately succeed in its space?

On the other hand, if you went through this list of questions and that little voice in your head started contesting that they did not reflect your experience at your company, it might be an opportunity to consider your, and your company’s, purpose.

Before we go on, it is worth stating that having a purpose around which your team is aligned is merely the first step. Truly committing to and living that purpose is what really inspires and generates benefits for your company, and hopefully the world.

What Are the Benefits of a Company Purpose?

As we just saw, alignment in pursuit of a common purpose is a critical ingredient to a successful outcome for a group or organization. What other benefits does having a company purpose generate?

There is ample evidence that individuals prefer working at companies with a strong sense of purpose. ,McKinsey has found that “People who live their purpose at work are more productive than people who don’t. They are also healthier, more resilient, and more likely to stay at the company. Moreover, when employees feel that their purpose is aligned with the organization’s purpose, the ,benefits expand to include stronger employee engagement, heightened loyalty, and a greater willingness to recommend the company to others.”

“People who live their purpose at work are more productive than people who don’t. They are also healthier, more resilient, and more likely to stay at the company.”(,McKinsey)

What about customers? A ,2019 Porter Novelli / Cone Purpose Biometrics Study found that “purpose builds deeper bonds: 79% of Americans say they feel a deeper personal connection to companies with values similar to their own,” and “88% would purchase products or services from [a company with purpose], while 70% say they’d want to work for that company.”

When translating company purpose to the brand, ,Gallup, meanwhile, finds that “…when promise and behavior are in sync and customers are aligned with a brand promise, they give that brand ,twice as much share of wallet (47%) as customers who aren’t aligned with that same brand (23%). Establishing and operating from an anchor of purpose can create a competitive advantage: A company’s competitors might be able to replicate products and services, but that company can successfully differentiate itself from the rest by hiring and engaging employees who can fulfill and deliver its purpose and brand in the marketplace.”

Increased employee productivity? Increased team member loyalty? Increased customer affinity and patronage? Competitive advantage? Check, check, check, check. What company leader, or team member for that matter, wouldn’t want these benefits?

Unfortunately, Gallup ,goes on to state that “only about one-third of the U.S. workforce strongly agrees that the mission or purpose of their company makes them feel their job is important. … And [as a reminder] misalignment is costly; Gallup research at a client organization indicates employees who are more aligned with their company’s identity perform higher on key business performance metrics than do employees who are less aligned.”

On a more optimistic note, there is evidence that times are changing. Historically, the Business Roundtable, a group of the chief executive officers (CEOs) of nearly 200 companies, held the view that a company’s purpose was primarily to maximize shareholder value. In 2019, however, they issued a “,Statement on the Purpose of a Corporation” that expands to additional stakeholders, incorporating commitments to delivering value to customers, investing in employees, dealing fairly and ethically with suppliers, supporting communities, and also generating long-term value for shareholders.

Why is that important? Formerly, it was thought that maximizing shareholder value was the only purpose that a company needed because its leaders would do the right thing for the long term sustainability of the business. There has been ample evidence that that does not always work as intended for a variety of reasons including finite CEO and executive life cycles, compensation and incentive plans overwhelmingly rewarding short term share performance, not taking into account societal cost externalities such as impact on the environment, to name a few. Societal sentiment and government regulations are starting to address these imbalances and the Business Roundtable’s amended statement is a reflection of that evolution.

This has been a pretty dense section on the benefits of having, and even more critically, aligning behind and acting in accordance with a [compelling and inspiring] purpose for your company. Recapping:

• • Employees who feel that their company has purpose are more resilient, productive and loyal;

• • Customers feel a deeper connection to brands with purpose and reward them with more business;

• • Only about one-third of employees are supportive of their company’s purpose; and

• • The notion of what makes for a worthwhile company purpose is evolving and broadening to include traditionally ignored stakeholders.

Choosing Your Purpose

How do we go about identifying a purpose? For most people, a purpose is a bit like a great meal: you might appreciate the food, but you don’t know how to prepare it. Rather than merely appreciating the end result, let’s see whether we can work out the recipe.

The Elements of Purpose

In my experience, a company purpose, as we have defined it, will be characterized by the following five elements:

• • Authentic – genuine; fits authentically with the company’s strengths and core focus

• • Transcendent – rises above self-serving concerns to create or provide a product or service that improves the condition of others

• • Enduring – long-lasting, will stand the test of time and be valid for years to come

• • Activating – inspires feelings of hope and enthusiasm, to the point of taking action

• • Memorable – short, simple and easy for your team and stakeholders to understand and remember, ideally captured in fewer than five words

Now how do we go about defining the purpose so that it is in keeping with those elements?

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(Reference: ,Simon Sinek outlines similar elements in discussing how leaders can advance what he calls a just cause.)

Arriving at Your Purpose

While there is no perfect approach, one that I have seen be effective entails asking “why” a few times until you come to a point where you can’t ask why any further. The following steps outline how you can proceed to define your purpose.

1. 1. Gather a team of 4-8 people whom you consider to be exemplars of your company.*

1. 1. Brainstorm a list of what you care about most in life.

1. 1. Prioritize the list based on which items that intuitively feel like the strongest candidates for you and your team.

1. 1. Take the first one and ask yourself why is it important to you?

1. 1. Whatever your response, ask yourself why is that important to you?

1. 1. Repeat step 4 until you are repeating yourself or can’t answer any further.

1. 1. Repeat steps 3 to 5 for any other ones on your list that especially resonate with you.

1. 1. Ideally, you will have found that the underlying reason behind these values are related to one another. If not, look for commonalities or pick the one that most inspires you.

* Depending on the size of your core group, you might choose to brainstorm together or to separate into breakout groups and then bring your responses together and work through them as a team.

In an ideal world, you will arrive at a purpose that everyone supports unanimously in your first meeting. More realistically, don’t set your expectations that that will happen. Assuming you don’t get where you want to in that first session, pick your top two to three candidates and give yourselves a week or two to let them percolate before reconvening to discuss them further. If you continue to have challenges in achieving alignment, consider whether you haven’t brought forward the right or full set of values, or whether the people on your purpose-defining team prioritize different values.

(References: You can view similar approaches and frameworks from ,Dr. Vic Strecher, author of ,Life on Purpose: How Living for What Matters Most Changes Everything; ,Elizabeth Harris of Resultist Consulting, and ,Rhythm Systems.)

Testing Your Purpose

Once you have come up with a version you are comfortable with, ask yourself if it meets these criteria:

• • Does it address the six elements outlined in The Elements of Purpose section above?

• • When the going gets tough and you are going through stressful periods, will thinking of your purpose reenergize you?

• • Does the purpose resonate with your broader team and does working toward it provide them with a sense of fulfillment?

• • Will you and your team view your company’s pursuit of the purpose as a higher calling worthy of defending?

• • If you had to choose between increasing revenues and staying true to your purpose, would you choose the latter?*

If it doesn’t meet these criteria, then it likely will require some more iteration using the eight steps outlined in the section on Arriving at Your Purpose. And if it does meet these criteria, great! You now have your company’s purpose, the first building block of your ,Company Promise Statement.

* Note that your purpose may evolve over time, and it is definitely recommended that you revisit it at least every few years to ensure that it continues to meet all the key parameters outlined above. However, it is meant to stand the test of time, rather than be changed based on short-term revenue or profit opportunities that may arise.

Examples

Reviewing examples helps to clarify concepts. Below are some stated company purposes, with my remarks and proposed rephrasing to (in my opinion) make them even more compelling and inspiring.

Before we get started, it is worth noting that not many companies actually outline their company purpose on their websites. This either means that they don’t have one, or that they do have one but haven’t published it.nnnFor the examples below, the fact that these companies have both defined and published their purpose already puts them amongst the very top of companies with respect to living their purpose. Publishing your purpose on your website demonstrates to your employees, customers and other stakeholders that you have a strong commitment to it. The companies below are leaders in the area of purpose. My commentary is thus the equivalent of looking at the empty part of the glass in terms of what more they can do, while the very full part of the glass is that they even have a purpose statement that they have willingly published to the world.

Example: ,Charles Schwab

“Our purpose is to champion every client’s goals with passion and integrity.

This purpose drives us to help our clients take ownership of their financial futures, helping people at all levels of income and every stage of life, because investing for the future is one of the most important things people can do for themselves and their families. We believe it is critical to the health of our communities and to our society.”

Using the original criteria and focusing on the first sentence alone, I would assess it as follows:

• • Authentic – Okay. It could apply to just about any company that serves clients. Given that everything that Schwab details on its website is related to the area of finance, a mention of finance would increase the level of credibility in executing on that statement. I am speculating that they may have intentionally left the word out because the notion of achieving goals is more inspiring than the practical realties of financing them.

• • Transcendent – Yes, it is about improving the client’s condition, not the company’s.

• • Enduring – Yes, this purpose is timeless.

• • Activating – Good. It is very conceivable that Schwab employees, clients and other stakeholders would be inspired to act on this purpose.

• • Memorable – Pretty good. I wonder whether every Schwab employee could recite that purpose from memory.

Possible Alternatives: financially championing your life’s goals

Comments: I feel that the most important elements of this purpose is the inspiring notion of achieving your life’s goals. Schwab’s role is conveyed as the champion, adding the mention of finance for added credibility and authenticity.

Example: ,Southwest Airlines

“Connect people to what’s important in their lives through friendly, reliable, and low-cost air travel.

Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”

The statement is emotionally resonant for travellers and inspiring to the Southwest team. However, it is not particularly easy to remember. The alternative proposed below strikes at the very core of what most people think of when they choose Southwest and most travellers will agree that flying is only enjoyable when the conditions of friendly, reliable and low-cost are met.

Using the original criteria and focusing on the first sentence alone, I would assess it as follows:

• • Authentic – Excellent. Southwest is known for friendly, reliable, low-cost air travel. It is their brand, and they execute well to continually reinforce these words in their travelers’ minds.

• • Transcendent – Excellent. They are clearly serving the traveler and being intentionally vague about business or leisure travel when they say “connect people to what’s important in their lives”.

• • Enduring – Very good. This purpose will work for many years, until such time as they evolve beyond air travel (if they ever do so).

• • Activating – Great. Southwest team members and travelers would be inspired to act on this purpose.

• • Memorable – Okay. It is conceivable that some team members might memorize it over time and with repetition.

Proposed Alternative: Enjoyable, low-cost air travel

Comments: Personally, I find the notion of connecting people to what’s important in their lives to be somewhat superfluous in that given the cost and inconvenience, not many people fly unless they are going to something important to them. As for friendly and reliable, the flight experience would only be enjoyable if it met both of those parameters (would anyone enjoy unfriendly or unreliable air travel?). Low-cost deserves its own mention as it enables the segment of first class or business travellers to self-select out given that they might add other elements to qualify the experience as enjoyable.

Example: ,Kraft Heinz

“Let’s make life delicious”

• • Authentic – Okay. The use of the word delicious somewhat evokes food, which is what Kraft Heinz is known for. However, one could argue that that statement might also be used by a company in another field, such as travel.

• • Transcendent – Good. The use of the word “us” as in “let’s” implies together and doing it together, which clearly transcends their own goals.

• • Enduring – Very good. While “Life” and “delicious” will never go out of style, there is an increased awareness of the importance of “healthy” that it might be beneficial to reflect at some point going forward.

• • Activating – Very good for people focused on delicious food.

• • Memorable – Excellent. Everyone would remember this phrase.

Proposed Alternative: healthy and delicious, food and life OR delicious food, healthy life

Comments: As with Schwab, adding the area of focus (i.e. food) adds authenticity in terms of the Kraft Heinz’s ability to live their purpose.

Example: ,Daimler Truck

“Our customers move the world.

They ensure that goods and people reach their destinations, that our everyday lives can function, and that prosperity is created. Studies show that demand for mobility and transport will continue to grow. The products and services of our customers will be needed more in the future than they are today or in the past. The driving force for us at Daimler Truck & Daimler Buses is to provide our customers with the best possible support in their work. We develop the right vehicles and services for them: efficient & electric; safe & automated; reliable & connected. We are always there for our customers – for all who keep the world moving. That’s our mission and what drives us – and what unites us across divisions and brands.”

On a page literally entitled “Our purpose”, Daimler provided the text above in one continuous paragraph. It is difficult to see what is their purpose, unless that that is what is meant when they speak of mission – which is confusing. For the purpose of this review, I have intentionally isolated the first line as the purpose.

• • Authentic – Very good. They certainly reference their focus on transportation and the movement of people and goods, which they are known for.

• • Transcendent – Very good. They speak of their customers, and how they help them accomplish their goals.

• • Enduring – Excellent. It is hard to imagine a time when customers, moving and the world are not relevant.

• • Activating – Good for the first sentence. It’s really more a statement about their customers than anything they do. You know by now how I feel about the rest.

• • Memorable – Excellent for the very first sentence. That said, it is not really a purpose. As for the extended statement, only the most committed employee would memorize it, and it is hard to imagine a customer or other stakeholder going to the length to remember it.

Proposed Alternative: moving the world OR moving the world’s people and goods OR enabling our customers to move the world

Comments: Great first sentence that could be tweaked to complete the phrase “Our purpose is…”.

Example – ,McCormick:

Our Purpose is “To Stand Together for the Future of Flavor.”nnFor background context if you are not familiar with the company: “McCormick & Company, Inc. is a global leader in flavor. With our diverse and balanced flavor portfolio, we are ideally positioned to meet the increasing demand for flavor around the world.”

McCormick is clearly a company that comes across as future-focused. They have ,won numerous awards and acclamations for sustainability, diversity and equity, and clearly and prominently outline their forward-looking objectives in these and other areas.

For additional context, it is worth mentioning that they also share the following vision right below their purpose: “Our Vision is ‘A World United by Flavor—where healthy, sustainable and delicious go hand in hand.'”

Now about that purpose:

• • Authentic – Excellent. They are known for food flavoring.

• • Transcendent – Okay. Standing together for the future of flavor sounds catchy but it sounds to me like it serves the company’s interest at least as much, if not more, than their customers. It comes across to me that they want their customers to stand with them rather than the other way around.

• • Enduring – Very good. Relevant now and no reason to think it won’t be in the future.

• • Activating – Very Good. The “future of flavor” is forward-looking and evokes optimism.

• • Memorable – Very good. It’s a catchy phrase.

Proposed Alternative: healthy, sustainable and delicious flavors

Comments: Overall, McCormick comes across as a company that is in tune with and well positioned to address consumers’ evolving priorities and tastes. On their purpose statement in particular, I find the notion of “standing together” somewhat off-putting, evoking a protest march and call to arms against some unseen forces oppressing the world of flavour. I imagine they have all the best intentions, and my opinion is that their purpose statement would be more powerful if it focused on the positive, which I attempted to do in the proposed alternative by borrowing some key elements from their vision statement. (Note: McCormick’s vision statement is actually excellent. If we were to go with this proposed alternative purpose statement, I might then shorten the vision to simply focus on “A World United by Flavor”, or “All the World’s Uniting Over Flavorful Meals Together”. We’ll go into vision statements in a forthcoming blog post).

,The Coca-Cola Company: Our Purpose: Refresh the world. Make a difference.

Big picture, this is one of the clearest examples of a purpose statement that we have looked at: it’s inspiring, compelling and memorable.nnIf we were to nitpick, we could say that “make a difference” could apply to any company and that “refresh the world” is the truly authentic purpose. Furthermore, it actually feels like two, somewhat disjointed statements where the first sentence is what Coca-Cola is really doing, and the second part is something tacked on to make the full statement more inspiring. I can definitely see how, for example, Coca-Cola might make a positive difference by using its unparalleled distribution capabilities to deliver water to remote African villages. On the other hand, I (and likely many others) would not be as inspired if that same distribution chain were being used to deliver unhealthy products to those same remote villages.

All that being said, on face value alone, it’s a powerful purpose statement and hopefully Coca-Cola is striving to manifest it.

• • Authentic – Very good, excellent for the first part. Coca-Cola is the top name in (refreshing) beverages worldwide. The second part is very inspiring and compelling, but it is not evident how Coca-Cola helps make that happen.

• • Transcendent – Very good, excellent for the second part assuming we are speaking of making a positive difference.

• • Enduring – Excellent. Quenching thirst and making a difference will always be important.

• • Activating – Excellent. It appeals to physiological and psychological needs.

• • Memorable – Excellent. Very catchy, and easy to remember.

Proposed Alternative: none, provided that Coca-Cola actually committed to all of it

,The Clorox Company: We Champion People to Be Well & Thrive Every Single Day

Not bad. When most people think of Clorox, they think of cleaning products. And yet, the company does have a few non-cleaning products such as barbecue coals and salad dressing. In my view this raises the question of focus, as some customers may not be inclined to buy food and related products from a cleaning company.

• • Authentic – Very good. Their cleaning products help with hygiene and cleanliness, which contributes to people being well.

• • Transcendent – Very good. The focus is on helping people to be well and thrive.

• • Enduring – Excellent. Being well and thriving will stand the test of time.

• • Activating – Good. Essentially, I read this statement as an exhortation to team members to do what it takes to help people be well and thrive, which is a bit vague.

• • Memorable – Good. Most team members will remember this purpose, though shoppers and other stakeholders won’t.

Proposed Alternative: championing health and wellness (current array of products) OR keeping the world clean (focused on cleaning products)

What’s Your Why?

Gregory Mallory, a famous English mountaineer who attempted three times to summit Mount Everest in the 1920s before perishing on its slopes, was asked why he wanted to climb the mountain. His response has become known as the most famous three words in mountaineering: “Because it’s there”. Essentially, Everest was his purpose.

While many have no ambition to climb Everest, it was clearly a compelling and inspiring purpose for Mallory and most other mountaineers around the world. And that’s the final note: what is compelling and inspiring for some is not for others. You want your purpose to be meaningful to you, your employees, and your audience of customers and other stakeholders.

We all have our own Everests that we are compelled and inspired to climb. What’s yours?

Coming up next in this series: ,Vision.