In today’s fast-paced and constantly evolving business environment, having the willingness and ability to continuously transform and innovate is a critical skill for organizations of all sizes, from small local businesses to multinational corporations. As the business environment evolves, it is important to recognize that digital innovation and transformation is an ongoing process that requires strategic planning.
This article will delve into the importance of having a specific purpose statement that aligns with your business goals and supports your overall strategic planning process. We hope this will help guide you in defining the direction you wish to take your business in.
Thinking Through a Business Purpose Statement
Do you currently design systems for stability or adaptability? Are you building an open, learning-focused organization or one that stands for permanence and security? Do you promote change and accept the failures that come with it, or are you promoting a no-fail culture?
However you answer, it’s likely your company needs to rethink how it does business, how it organizes itself, and how it can create an environment where those that promote change are not seen as enemies of the system, but rather as its champions. Your company exists for a reason beyond making money for owners and shareholders. At least, successful companies have a company purpose beyond those considerations.
Another key trap is that innovation and digital transformation have become somewhat of an end in itself. These buzzwords have been in fashion since the dot-com boom (and bust!). Avoid the common trap that many businesses fall into by remembering that innovation and transformation is a means to an end, not an end in itself. The same goes for technology. All of these are simply means to achieve an overarching Business Intention.
To change requires a belief in one’s own ability to be able to carry out that very change. Large corporations often feel that they lag behind start-ups on aspects related to innovation, for example, speed, agility, costs, etc. But the more we have worked with clients and compared large organizations to start-ups, the more we are convinced that scale if properly exploited, can actually be an advantage, not a liability for innovation.
Large firms have numerous assets and capabilities in their core and differentiating areas that help them distinguish themselves in the market and scale innovations beyond what any start-up can do. It is up to all of us to help them discover and exploit those strengths. And if large organizations are inflexible today, it does not mean that they have to be inflexible. Rather, it means that they have been designed to be inflexible. If an organization wants to achieve different outcomes, it has to change its design. Doing so is entirely possible.
What is Business Purpose?
We as humans are motivated by the shared goals our group wants to achieve. The question is, how closely are those shared goals aligned with each person’s individual sense of meaning.
An innovative team needs people who are intrinsically motivated, which is fostered by the desire to make a real difference in the world. They operate best in an organization animated by similar goals. Thus, for an innovation initiative to work best and a team to have a culture that is fulfilling for the individual and impactful for the world, we need to achieve alignment between individual and collective goals.
The word “purpose” denotes the goal an organization it is trying to achieve on the highest level. In the case of an innovation team, it might be as simple as “Find an ideal product to solve our customer’s Job to be Done,” or it might be as ambitious as Google’s Massive Transformative Purpose (MTP), “To organize the world’s information and make it universally accessible and useful.”
The purpose is thus the core of why an organization exists. The purpose of an organization ideally reflects the sum of the individual meanings of its members. Each person in the organization should be able to see their own meaning reflected in this purpose. Think about it: an organization will never be fully effective if its members don’t feel personally connected to its purpose.
Externally, meaning has a strong influence on the perception of your organization. In the current market, customers are asking more and more about the purpose that drives a company and whether it is backed up by the right mindset. Customers do this because they are seeking in the company’s purpose a resonance with their own meaning. Both employees and customers are increasingly critical of organizations that pay lip service to higher purposes while employing mercenary mindsets and exploitative approaches.
People are now asking what implications your organization and product have for society or even the world as a whole. Being attentive to what really matters to employees and customers will lead to an organization that is continually asking itself, “Am I still relevant?” This is a question that is absolutely necessary in times of exponential change.
Finding your Business Purpose
What problem do you want to solve? Do you want to spread brilliant ideas all over the globe, like TED? Make transportation as reliable as running water, like Uber? Or help humankind reach its potential, like the non-profit organization AIESEC? Or do you just want to build a more fuel-efficient car? If you said the latter, your team has a purpose. If you’re more drawn to the former, you have a Massive Transformative Purpose (MTP).
The UNITE Business Intentions
This tool helps you define your Business Intention, the critical strategic objectives that will orient your entire innovation project. Nailing your business intentions is critical – else, you will be missing that guiding North Star.
An MTP causes a paradigm shift since it attempts to contribute to or even solve a global problem and create a different (and hopefully better) future. As Peter Diamandis likes to say, “Find something you would die for, and live for it.” An MTP can thus contribute to exponential growth since it creates an entirely different mindset and may allow customers to align their individual meaning more easily to your purpose. In fact, in their book, Exponential Organizations, Salim Ismail, Michael Malone and Yuri van Geest argue, “An exponential organization simply doesn’t work if not driven by a Massive Transformative Purpose.”
Every decision-making process is scrutinized daily to see if the outcome truly represents the heart of the organization. And yet, even purpose should sometimes be interrogated. That is why even an MTP is constructively questioned every now and then to assess whether it is still relevant. As serial entrepreneur Marc Degen, one of the contributors to this book, likes to put it:
“Change is standard, so you better accept what’s happening, adapt, and enjoy the ride!”Marc Degen
Your company should have one purpose statement that is clearly articulated and drives decisions as a whole. It explains why the company exists.
Crafting a Vision Statement
Values build on an organization’s purpose and drive behaviors. They allow you to know how to act, even in the face of uncertainty. In the context of an innovation team, where individuals have a lot of freedom, values provide guidelines for action. For example, if your team has the value of being financially responsible, there is no reason to have a specific policy that individuals should not book expensive first-class flights, because members will naturally decide to choose the cost-effective option in order to conserve resources.
Values, in effect, serve as a social contract within a team, so you should work together to decide what you want the core values of your team to be. There are no wrong values, just values that fit the needs of certain cultural environments.
Values guide our actions in a more explicit way than purpose does. They translate our overall worldview into actionable principles that can guide our behavior. The layers go on from there. Vision is the long-term goal of the team, what it hopes to accomplish in five to ten years. Goals are set on a more tactical level and are a means to reach the vision. They can be set in any time frame from weeks to years. Our vision and goals are also important because they drive which strategic assets and capabilities a firm invests in.
Business News Daily says that a company’s vision statement should explain the “Why” of a company’s purpose. In other words, what is the company’s plan for remaking the world?
At Digital Leadership, we think every business purpose should be developed in consultation with its vision statement. Business purposes are only as strong as the moral core behind them. Your company’s existence should be justified by the overall good the products and services you provide accomplish.
What is your overall purpose, and how does it reflect your view of how the world should be?
Crafting a Mission Statement
A mission statement and a vision statement aren’t too different. We think that a vision statement looks outward more. It reflects the social impact a company’s actions can have.
On the other hand, a mission statement outlines those actions, at least broadly. A company’s mission should match its values, purpose, and vision while pledging to take certain steps. It may be helpful to consider some vision statement examples.
Perhaps the most-famous mission today belongs to Google: “To organize the world’s information and make it universally accessible and useful.” You can see how what Google does with its products and services is influenced by its mission.
The organization behind TEDTalks has a very simple mission statement, but it, too, makes sense in the context of what they produce: “Spread ideas.”
The mission statement of the American Red Cross is appropriately a statement of hope and selflessness: “To prevent and alleviate human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors.”
Visiting company websites is an easy way to have a look at how they define their mission. They can give a lot of insight into what industry and consumers consider important.
Purpose statements, vision, mission: these formation documents are the roadmap a company follows. They motivate and activate a company’s resources to its united toward a common goal.
Managing Your Intentions
An important effect that completely understanding your business purpose provides is that you can make clear your intentions. Purpose statements help direct the company’s future by expressing priorities and creating a path to follow. Additionally, purpose statements help direct management decisions in regard to the intentions of the business.
“We intend to have success,” of course every manager says. But what steps will be taken to further that success? In How to Create Innovation, we suggest answering the following questions as your develop clear goals for your business:
- What is your ultimate Business Intention? What do you ultimately want to achieve?
- What is your motivation? (describing what you want to leave behind you?)
- What is your Vision (describing where you want to go)?
- What are your key objectives (describing the concrete goals you want to achieve)?
And what actions will drive your business purpose? Is your company purpose statement reflected in how the business makes money? In the world of digital transformation, businesses usually define their intentions in a few specific ways. Consider these examples:
- Leveraging new technology
- Preparing to unleash innovations
- Recreating your value proposition
- Developing new products
That’s a lot. But then again, writing a company’s governing documents is a task not to be taken lightly.
If you’d like help in understanding how your business purpose is or isn’t setting you up for success, we’d love to talk to you. We’ll help connect people who understand business purposes at work to you so your vision and intentions are clear.
You’ll find contact information elsewhere on our website.
The UNITE Business Model Framework: A Framework for Innovation Success
How to Create Innovation includes a number of canvases that focus on value creation and finding the right business model to meet your customer segment and customer needs. The framework is built to inspire drastic changes that help you find a competitive advantage. Our hope is that your company grows through business model innovation, and so we again encourage you to look deeper into our website and the book.
Here is a summary of the key ingredients of the Business Model Framework:
The centerpiece is the Business Model Canvas, which covers the six main areas of a Business Model (the Operating, Value, Service, Experience, Cost, and Revenue Models).
A Business Model can be broken out into its numerous aspects. Depending on what challenges you face, you can zoom in on your area of interest using an appropriate tool or canvas:
- Your Business Intention and objectives as well as your Massive Transformative Purpose summarize your drivers and give direction to what you do.
- The Value Proposition Canvas details the central components of your offering (the product or service).
- To dig into your Customer Segments, work with data-driven Personas.
- The JTBD Customer Job Statement and Job Map frame the JTBD of your customers.
- The Business Model Environment puts your Business Model in a market context composed of emerging trends and disruptive forces.
- The Innovation Culture Canvas helps you understand and consciously shape a culture that supports innovation.
- The Innovation team structure enables you to draft a team structure for your innovation initiative.
- Using learning and growth metrics, you can measure progress at the initial stages of development. These metrics help you focus on what really matters instead of creating a detailed business plan that will not really help you. Later on, you can expand the financial aspect of the Revenue and Cost Models with a full business case.
- The Operating Model Canvas helps you think through the Operating Model.
- Business Capability Map: A Practical Business Approach