How strong is your company’s purpose? Stress-test it with these questions:
IS YOUR PURPOSE SPECIFIC ENOUGH TO DEFEND?
An ideal statement of purpose brings value and values together. It must state what the organization can deliver — and speak not just to shareholders but to employees, customers and society at large.
WHAT’S FIXED AND WHAT’S UP FOR GRABS?
The stories that employees tell each other about their history, especially foundation stories, can powerfully convey a purpose worth defending. Nestlé was founded to save the life of a baby; Honda, to restore Japanese pride in engineering; and Wal-Mart, to bring value to out-of-the-way places. Purpose is often buried in an organization’s history and its founders’ memories. And yet strategies are bound to change. So re-examine your purpose. To what extent are you reaching its limits? Assuming that a purpose is fixed for all time is a big mistake — only a generic purpose can be unchanging.
HOW WILL YOU DEFEND YOUR PURPOSE AGAINST SHORT-TERM TEMPTATIONS?
One approach is to appoint guardians. For example, the accounting firm PricewaterhouseCoopers retains its wise retired elders on supervisory boards as custodians of purpose.
IS THE ORGANIZATION’S PURPOSE CONNECTED TO YOUR OWN?
As a leader, you channel your organization’s purpose. Focus on how your imprint as a leader complements and extends that purpose.
(Dominic Houlder is the associate dean, and Nandu Nandkishore an executive fellow, at London Business School.)
