In a Harvard Business Review article, Thomas W. Malnight, Ivy Buche and Charles Dhanaraj explained how successful companies redefine their businesses.
THE CHALLENGE: Companies pursuing high growth tend to follow three well-known strategies: creating new markets, serving broader client needs, and changing the rules of the game. But there’s another critical growth driver – purpose.
THE INSIGHT: Many companies consider purpose merely an add-on to their strategy, but the most successful companies put it at the core, using it to redefine the playing field and reshape their value propositions.
THE BENEFITS: A purpose-driven strategy helps companies overcome the challenges of slowing growth and declining profits. It also helps with the people-related aspects of running a business, which so often prove to be the undoing of leaders.
Is Purpose At The Core Of Your Strategy? According to the authors, the answer is NO unless you can answer YES to all five of the following questions:
1) Does purpose contribute to increasing your company’s growth and profitability today?
2) Does purpose significantly influence your strategic decisions and investment choices?
3) Does purpose shape your core value proposition?
4) Does purpose affect how you build and manage your organizational capabilities?
5) Is purpose on the agenda of your leadership team every time you meet?
Bruce Jones, the Disney Institute’s senior programming director, asked the question, “Why is the raison d’être (reason to be) concept so important today?”
He says Simon Sinek, author of Start With Why, explains it best: “Studies show that over 80% of Americans do not have their dream job. If more knew how to build organizations that inspire, we could live in a world in which that statistic was the reverse – a world in which over 80% of people loved their jobs. People who love going to work are more productive and more creative. They go home happier and have happier families. They treat their colleagues and clients and customers better. Inspired employees make for stronger companies and stronger economies,” Sinek says.
What are the specific differences between mission statements and purpose statements?
Table Source: Bruce Jones, Senior Programming Director, Disney Institute