A clear and compelling corporate purpose is meaningful and exciting. It inspires customers and partners to recognize that you are doing something unique and gets them out evangelizing for your brand. A compelling purpose also gives employees something to rally around and aspire to. Yet according to Gallup research, just four in 10 employees worldwide strongly agree that the mission or purpose of their company makes them feel their job is important. And less than half of workers in any industry feel strongly connected to their company's mission.
Most companies have some kind of statement of purpose. But are they doing the job they are supposed to do? Your purpose statement should fully define who you are as a company and why you exist. Your company may call its statement of purpose a mission or vision statement. Don’t get hung up on what you call your statement, but focus on what it says.
Organizations can evaluate the effectiveness of their purpose statement with three questions:
- Is it inspiring?
- Is it memorable?
- Is it authentic?
Let’s evaluate four well-run companies who have developed a core statement of purpose and rate their statement of purpose on a scale of 1 to 10, 1 being poor and 10 being terrific. First, let’s look at what I consider to be two statements of purpose that need a refresh from when they were first crafted.
Statement of Purpose: The Home Depot is in the home improvement business and our goal is to provide the highest level of service, the broadest selection of products, and the most competitive prices.
The statement defines who they are and also defines how they plan to compete through service, selection, and price. But is the statement inspiring? I say no. Is it simple? Yes, but it lacks punch. Is it authentic? That is an affirmative. Home Depot has demonstrated they are the market leader in home improvement, but they face the risk, like so many other retail companies, of being disrupted by Amazon.
So how could their statement of purpose be improved? I’d suggest they think about the overall space they occupy in the marketplace - making life better for all their constituents - employees, suppliers, customers, and the community at large. Home Depot is a tremendous addition to every community. They pay better than average retailers, they train employees in management, they encourage promotion from within, they don’t grind their suppliers, and they are continually learning.
I spent a morning with Ken Langone, the founder of Home Depot, and he told me that to this day, every board member must commit to visiting two stores every quarter. When they do visit, they have a standard protocol to follow - introduce yourself to the store manager and ask the manager to gather a group of employees in the break room in 15 minutes. The board member then fields questions and asks questions of the employees. Questions like:
- “Are you getting what you need to do your job?”
- “What products are moving well and why?”
- “What are suppliers doing and are there any causing you problems?”
The board members each report out what they learned at the next board meeting. The CEO is there to learn. This is not meddling in the CEO’s business. This is perceived by the CEO as one of the most helpful contributions of the board.
With a robust culture that engages employees so effectively, it seems to me Home Depot could rethink their overall purpose to be more expansive and inspiring. The statement would better align with their overall aspiration to be a community benefit, which will be an important differentiator from the anonymous Amazon, that rarely engages locally at the level of Home Depot.
I give Home Depot a 7 on a scale of 1 - 10. Their job - make it a 10.
Statement of Purpose: To enable economic growth through infrastructure and energy development, and to provide solutions that support communities and protect the planet.
Boring! It’s accurate but lacks punch and is not inspiring. Elevating the language can make a big difference. They could try something like, “We move mountains,” or “We shape landscapes and lives.” The new millennial worker wants to know they are part of something big that will help shape the future of the world!
Now let’s look at two purpose statements that meet all three criteria – inspiring, memorable, and authentic.
Statement of Purpose: Nourishing families so they can flourish and thrive.
The purpose involves all families, including employees. The executives could have said “people” instead of “families” and perhaps that was debated heavily. However, I like families, because it captures the product continuity most of us have with Kellogg’s from early childhood. Many of us buy their products over the course of an entire lifetime. To “flourish and thrive” is the new mantra for the 21st century and Kellogg leverages this ideal with more nutritious products, feeding not only the U.S., but the entire world.
In 2013, Kellogg’s launched its “Breakfast for Better Days” initiative, to serve 1 billion breakfasts to people in need around the globe, with a special focus on helping hungry children start their school day with a full stomach and ready to learn. The company exceeded its goals for the program by the end of 2016 so they expanded it to “Create “3 billion Better Days” by 2025. Wow - what a goal! This has captured the enthusiasm of employees, partners, and customers. You can read more about these initiatives in Kellogg’s corporate sustainability report.
BD(a health care products company)
Statement of Purpose: To help all people live healthy lives.
What do I like about this? It encompasses everyone - customers, employees, suppliers, and even populations who are not customers. BD has invested millions in what is called shared value - looking at a society’s problems and figuring out ways to solve these problems with existing or new products and services. BD claims that 40% of their revenue has emerged from shared value experiments.
The purpose statement is also integrated into every aspect of their strategy, according to BD CEO Vince Forlenza. At a JP Morgan Healthcare Conference, Forlenza outlined the company’s long-term strategy, which he said would drive five percent-plus revenue growth and 10 percent-plus earnings growth in the coming years.
“As we partner with healthcare systems to address their key priorities, we are broadening our served markets through our focus on major healthcare challenges, where we believe we can have the greatest impact,” said Forlenza.
The other great thing about BD’s purpose statement? Even I can remember it after one reading. It’s short and memorable.
So how do you rate your own statement of purpose as a company on a scale of 1 to 10 against these three criteria: Is it inspiring? Is it memorable? Is it authentic?
Push yourself to go deep into your company’s narrative. What is the story people must be repeating for you to know they are hooked with enthusiasm into your value chain of exciting customers? What is the story that will inspire all stakeholders and make them say, “Wow - what an amazing company!”
To learn more, read my post: Crafting a Company Purpose.