Step 1: Address the Question of Why your Organization Exists
The organizational purpose addresses the question of why an organization exists; why it does what it does. The fastest way to start is to ask:
What is the one thing missing in the world?
What does the world need most?
The establishment of an organizational purpose begins with a thorough understanding of its essence and its boundaries. This entails acknowledging the significant impact that a well-defined purpose has on employees, performance, customer relations, and the industry at large, as well as its long-term influence on future generations.
Typically, the definition of an organization's purpose is a responsibility that falls to the owner or the senior leadership team. In some instances, they might seek external support in this endeavor. These individuals are pivotal as they possess the initial vision for the purpose during the formation of the organization or as it was transmitted by preceding owners. Consequently, they are equipped with the necessary passion and endurance needed to navigate the discovery process and commit the required time, be it years or generations, to fulfill this purpose.
With the appropriate individuals engaged and focused, it is essential to deliberate on critical questions such as, “What is the one thing missing in the world?” This should be considered in tandem with what the organization perceives as vital at the current moment. Additionally, reflection on “What change do you wish to see in the world?” should be undertaken, aimed at addressing a significant need within the relevant context of time horizons and spatial focus.
The articulation of the purpose should be executed in a manner that presents it as though the envisioned end state in the world has already been realized.
Additionally, organizational purpose can be explored by reflecting through considering four key areas: global unmet needs, employee passions, the company's unique strengths, and opportunities for economic growth.
To distill a purpose that embodies meaning, authenticity, credibility, and influence, thoroughly evaluate these dimensions:
Identifying Global Needs: Start by pinpointing specific, significant needs in the world that are currently going unaddressed. Consider how critical these needs are and the impact of addressing them.
Tapping into Employee Passions: Investigate what energizes your workforce, including both the leadership and the broader employee base. Understanding the changes your employees and leaders wish to instigate globally ensures that the purpose resonates across your organization.
Leveraging Unique Competencies: Determine what your company excels at, particularly assets or skills that set it apart. Evaluate how these strengths can evolve to meet the purpose-relevant needs you've identified.
Creating Economic Value: Analyze potential business opportunities that align with the other three areas. Consider the potential for profit and whether your organization can realistically capture significant value from these opportunities.
Evaluating and Embedding Purpose Across the Organization
Once you've crafted a purpose statement, assess its strength using five clear-cut criteria to ensure it delivers tangible benefits:
Is it meaningful and capable of impacting stakeholders' lives?
Does it authentically reflect your organization's values and passions?
Is it credible and achievable, based on your company's unique strengths and core business?
Does it address significant, widespread needs with the potential for significant positive impact?
Lastly, is it compelling enough to inspire and mobilize action both within and beyond your organization?
Embedding Purpose Across the Organization
Once the purpose is articulated, it needs to be embraced beyond Keynote presentations, and become the cornerstone of the organizational strategy, familiarized with everyone in the organization.
Leaders are the first in line. Their task is to align their personal purposes with the organizational one, so that later, they model the commitment needed to embed this purpose into each employee's daily tasks. And then help their team members do the same.
Common Pitfalls in Defining Organizational Purpose
The establishment of an organizational purpose offers two significant benefits: it unites everyone in the organization on a common journey, and it acts as a wellspring of genuine passion and inspiration. To unlock these advantages, it is crucial to steer clear of the following prevalent errors:
1. Tradition or Novelty Bias: A common pitfall is conducting business solely based on tradition—believing that past methods are the only correct ways to proceed. Conversely, chasing after something solely because it appears cutting-edge or popular can be equally misguided.
2. Chasing Status: Purposes centered around personal ego, power, or status typically stem from a desire for what one lacks rather than from a place of abundance aiming to share and contribute.
3. Lack of Understanding or Emotional Connection: Although a purpose might be perfectly articulated, failure arises when team members or executives neither understand nor resonate with it on an emotional level.
4. Confusing Purpose with Mission and Vision: Blurring the lines between what an organization does, how it does it, and why it exists can create confusion. This mix-up can weaken the effectiveness of employing organizational purpose as an inspirational instrument.
5. Prioritizing Slogan Over Substance: While the importance of organizational purpose is increasingly recognized, some organizations treat it superficially—creating lofty slogans that sound appealing or using them for marketing without embracing their true value. The genuine purpose of an organization should primarily inspire those within it, as this inspiration directly translates to the quality of products and services delivered. High employee inspiration correlates with increased customer satisfaction.
The Three Levels of Why: Connecting Personal and Organizational Purpose
Achieving synergy between an individual's personal purpose and the organization's purpose triggers maximum inspiration and passion.
This concept is akin to forming a powerful connection that enables both the individual and organization to soar towards their goals, much like the dynamic between the Na’vi peoples and their dragons in the movie Avatar.
After articulating the organizational purpose, leaders must not stop there. They need to ensure that every team member sees and understands how their personal purpose aligns with that of the organization. This connection breeds shared passion and creativity. However, finding this connection may be challenging and often requires proactive support from leadership.
Anecdote
During the day of the launch of the Apollo mission, John F. Kennedy was walking around the premises and stumbled upon a janitor on his way. When asking him about what he was doing here at NASA, the janitor replied: “I’m putting a man on the moon.” No matter what position, it’s possible to align everyone around one common purpose.
Understanding the Three Levels of "Why"
To streamline this process of connection, leaders and employees can employ the three "why" questions. These questions aim to clarify and interlink purposes without causing undue existential questioning, instead focusing on revealing honest, passionate responses.
1. The Foundation: Why does This Organization Exist?
This question seeks to remind you about the overarching, singular organizational purpose. It serves as a source of inspiration for actions across the board.
2. The Connection: Why do I Work Here?
This probes into the reasons behind your decision to join and stay with the organization, as well as justifying your pivotal role within it. Clarity on your personal purpose makes it easier to see how it aligns with the organization’s purpose. Achieving this clarity strengthens the determination to persist, especially in tough times, and plays a crucial role in bolstering employee retention and reducing turnover rates.
3. The Implementation: Why am I Doing What I’m Doing in This Very Moment?
The final "why" brings focus to the immediate task at hand, ensuring it aligns with the broader objectives. Regular reflection on this question prevents autopilot work and ensures tasks are meaningful.
If ambiguity exists at any level, it's important for the individual to seek clarification from their leaders. It is every person's responsibility to understand the purpose behind their tasks, and every leader's duty to provide that clarity.
This approach solidifies personal accountability and purpose-driven work across the organization. Empowerment, thus, lies in each individual's and leader's hands - to understand, articulate, and act upon these three levels of why.
“I was always looking for a sense of purpose in the work I did, and looking back, even when my career trajectory in a company was outstanding, there was always a voice in the back of my head asking: but why? All this hard work, all this progress was meaningless if it wasn’t for something I believed in. Empty slogans on the walls weren't enough, I had to feel it in the people, the teams, the leadership. And when I couldn’t answer this question, I changed my employer.
Working for a purpose-driven company that resonates with my personal purpose gives me the anchor when I face setbacks or challenges. I can always remember it and remind myself why I started working for this cause in the first place. It gives me the energy to persevere and connects me with the team without any words because they truly care about it too. But most importantly, it gives me a sense of fulfillment and joy, because I’m spending my time on this planet working on something meaningful.”
- Nejc, Head of Business Intelligence at Reemina
The Responsibility of Leaders in Cultivating Organizational Purpose
Focus on Inspiration
Inspiring teams with organizational purpose is one of the crucial roles of leaders. There are many ways to do so.
Fundamentally, inspiring team members entails guiding each individual towards connection between their work and their personal purpose. Leaders can do so by carefully delegating responsibilities while having a team member’s personal purpose in mind, tailoring the workload to each person’s strength and the nature of the task at hand.
Another way to inspire using purpose is showcasing how the effect of people’s work will materialize in the world. In the repertoire of strategic leadership tools, visualization stands out. For example, leaders could help give a glimpse of a desired future state by presenting mockups, plans, and visions in the intermediate. Such inspiring “future glimpses” boost energy in a way that inspires team members to reach the reality to come.
Presenting current plans in a completed form allows team members to envision the outcomes of their work and immerse themselves in the future scenario with their senses: how it will look, imagining how it will be experienced, and anticipating how it will feel. This technique serves as a form of inspiration that extends beyond the teams’ own products and services; it is equally effective when other teams and other departments within the organization present their contributions, stressing that the entire organization is working towards the same unifying organizational purpose.
Without Responsibility for Motivation
It is pertinent for leaders to recognize that it is each employee’s job to find their own motivation for working and performing their best. Unmotivated employees essentially won’t perform to their full capacity, although they attempt at masking this with excuses and problems. Moreover, the presence of unmotivated employees obstructs peak performance.
Leaders should shift their focus from trying to motivate employees to inspiring them while making it clear that unmotivated behavior is not acceptable. This approach ensures that only engaged employees stay. These high-performers, irrespective of their seniority level, gravitate towards tasks where they can derive enjoyment, express their passion, and consequently exhibit unexpected creativity and solution-oriented behavior.
Is Purpose Alone Enough?
It is important to know the meaning and align individuals in the organization to the organizational purpose. However, just setting up the purpose is not enough. We’re aware that running an organization entails a lot of different areas (see our Flashlight blueprint for more details) such as providing direction, processes, cultural agreements, and a roadmap toward success, all of which are fundamental to bringing the purpose into reality.
"For individuals to bring their best and fly, create, and work with passion, there are some factors to highlight that we can’t overlook. We want individuals to feel safe, both in terms of how they feel, in terms of their compensation, and the communication and expression of their ideas. To enable this, we need to account for “basic hygiene,” as we like to call it. Basic hygiene means that every individual can live normally with their salary, meaning they can pay all their bills, have vacations, and live how they please. It means that we don’t expect individuals to work 16 hours per day but encourage and teach them to be as effective as possible. For example, supporting them to finalize their work in the optimized efficiency of six hours instead. We encourage open communication and constant feedback loops. In addition, we provide psychological and physical safety in our environments and help individuals be out of their survival mode, to cultivate a healthy, appropriate, and safe work environment."
- Vanja, Head of HR at LLOVE Foundation
Clarifying Concepts: Company Purpose, Mission and Vision
Understanding the distinctions among purpose, vision, mission, and objectives is crucial for organizational clarity and alignment.
The purpose encapsulates the fundamental reason an organization exists, focusing on the broader positive influence it aims to have. A vision statement, in contrast, articulates a desired future scenario unique to the organization in question. A mission statement delineates the primary strategies of the organization, while objectives specify tangible targets to aim for.
Purpose: why an organization exists, articulated as the desired final state we want to see in the world.
Vision: the desired future position of the company. Realistic, credible, attractive future for your organization. Your articulation of a destination toward which you should aim, a future that in important ways is better, more successful, or more desirable than the present.
Mission: the organization’s business proposition, its objectives, and its approach to reaching those objectives.
Business Vision
A vision encapsulates a desired future within a specific realm, offering a clear image of achievable goals.
It acts as a potent motivator, aligning interest and instilling a sense of belonging amongst employees by making them part of a greater endeavor. A well-articulated vision provides direction for decision-making and planning, both short and long-term. It fosters a culture of aspiration, challenging individuals to surpass present limits and achieve remarkable results.
Articulating a vision requires leaders to reflect on the impact they desire to have and the legacy they wish to create. This vision shapes priorities and paths, inspiring both leadership and followership towards shared goals. It is grounded in the organization's past, aligns with its values and culture, and is expressive of its unique strengths and distinguishing characteristics. Effective communication of the vision is essential for commitment and loyalty across the organization.
Additional cues to form or sharpen any vision:
It does not only look towards the future but is also rooted in the past and is consistent with the organization's values and culture.
It addresses the future and creates a mental model of a possible future state.
It is both idealistic and realistic. It should be realistic enough to be achievable and believable, but idealistic enough that it sets a standard of excellence and presents positive challenges.
It deals with today’s realities, and it is appropriate for the organization and its context.
It is ambitious and sets standards of excellence that inspire leaders, employees and the entire stakeholder ecosystem.
It elaborates on the organizational direction and purpose.
It inspires enthusiasm and encourages commitment and loyalty.
It is well articulated and easily understandable.
It represents the unique strengths of the organization—what it is, what it stands for, and what sets it apart.
It is regularly communicated and shared on all communication platforms and at every level of the organization.
It is the guiding framework by which actions are taken and decisions are made.
Business Mission
Considering the purpose as the direction for achieving a desired impact, the mission embodies the journey towards that end. It represents a comprehensive, well-conceived plan focusing on creating maximum value. A purpose can inspire multiple missions, each representing different strategies to implement the organization's purpose effectively. To identify the appropriate missions for your organization, it's crucial to evaluate how you add value to the world and the specific promises you aim to fulfill for your customers.
Organizational, brand, and customer values will guide decisions at critical junctions throughout our mission.
Examples of Misinterpreted Organizational Purposes
Below are examples of misinterpreted organizational purposes that are erroneously categorized, with explanations on their accurate classification as visions, missions, or objectives:
"To be the leading provider of technology solutions."
(Vision statement)Why is this a Vision Statement (not a Purpose): This statement envisages a future scenario where the organization dominates a specific market. It lacks an articulation of a broader purpose or the societal benefits the organization seeks to create, characteristics essential to a true purpose statement.
"To generate maximum shareholder value."
(Mission statement)Why is this a Mission Statement (not a Purpose): This example shifts focus solely towards financial success. It does not allude to a wider societal contribution or to an overarching raison d'être beyond generating profit, which are hallmarks of a genuine purpose statement.
"To provide exceptional customer service."
(Objective)Why is this an Objective (not a Purpose): This statement sets a specific target the organization aims to achieve, distinguishing it from a purpose which essentially provides a guiding philosophy for the organization's existence and overarching influence.
“The heart of human excellence often begins to beat when you discover a pursuit that absorbs you, frees you, challenges you, or gives you a sense of meaning, joy or passion”.
Explore next topic: Defining Organizational Culture Through Values
Values turn ideals into minimal standards that accelerate mutual understanding and cultivate a culture worth working in.
