How to Articulate an Organizational Purpose That Creates a Virtuous Cycle

A company’s purpose should be a call to action, to mobilize its people around a “cause” that defines it and embodies the feeling of contributing to the common good.

Purpose not only brings things together internally; it can also play a key role externally by reframing the competitive landscape, and the value proposition with which one goes to the market.

Thus, a purpose should describe a relevant result that is reflected in the customers, while simultaneously guiding the organization’s strategy, internal behavior and decision making.

A lively debate is brewing in the academic world about the purpose of companies. On one side of the fence is the Milton Friedman school, focused on capitalism aimed at increasing profitability for shareholders; on the other side are the defenders of a kind of capitalism that seeks communities of interest, which include not only shareholders, but also customers, employees, suppliers, society, etc.

To me, the most intriguing position is that of Dr. Adizes, whereby the main responsibility of business leaders is to build and preserve the organizational health of their companies. Organizational health is defined as good internal integration and the integration of the company with its markets.

A healthy company generates long-term returns and creates value for its communities of interest. We believe this is the role of purpose; to promote the health of companies by emphasizing some important aspect of market integration that encourages effort and gives a transcendent meaning to the work being done by everyone in the company.

This approach was also seen in the letter that BlackRock CEO Larry Fink wrote to his shareholders in 2019. In that missive, he expressed his conviction that purpose and profitability are symbiotic—not mutually exclusive. People who do their jobs with a good effort and creativity deserve to enjoy a life of dignity.

For a corporate purpose to truly motivate people, it must meet the three conditions of beliefs that operate on the most “physical” levels of the brain: they have to understand its content; they have to believe it is possible; and they must have an emotional desire for it to happen. All of this becomes a habit through repetition.

There are myriad ways to get a purpose to drive positive changes in behavior and business culture. Here are some steps to make it happen:

  1. Start with a collaborative process to create a noble statement of purpose. Generally speaking, the idea is to discover the purpose that motivates the most exemplary people in the company.
  2. Find examples and data within the company that support this purpose so that it is easy to visualize and explain.
  3. Commit to winning the battle of credibility. Stating a purpose automatically raises the expectations of people who work for the company. As such, it’s vital to undertake a number of symbolic initiatives that clearly demonstrate the executive leadership team’s intention to live and breathe the stated purpose.
  4. Give maximum visibility to the purpose throughout the organization. Prepare a launch that is engaging, in a format that will not draw skepticism.
  5. Align the different areas of the company with the corporate purpose. One approach would be to “democratize” the process internally, allowing each of the functions to draft a specific, noble purpose aligned with the company’s overall purpose, starting a variety of initiatives to earn their own credibility.
  6. Periodically assess how key decisions and management tools align with the purpose statement. The management tools with the biggest influence in this regard are: strategic planning, budgets, performance, selection, success metrics, etc.
  7. Have workshops to identify which actions make sense to start, continue or stop doing, based on the purpose.
  8. Activate and involve the people who are most likely to selflessly contribute to achieving the purpose.

For the first step mentioned above—developing a purpose statement—it could be helpful to mobilize a good group of employees to contribute ideas by answering questions such as the following:

  • What positive impact does the company have on its customers through current or future products and services?
  • What makes this company better than its competitors?
  • What is the purpose that motivates the most outstanding people on the team, those with great attitudes who do a better job?
  • What purpose would help boost the company’s growth and profitability?

The following criteria may help when articulating the purpose: It should be short, easy to understand, specific, exciting, instill a feeling of pride among acquaintances and friends, provide energy to bring out the best in people, and promote mutual trust with customers and colleagues.

Here are some examples of purpose statements from notable companies:

  • Securitas AB: contribute to a safer society
  • John Deere: help farmers do a better job feeding the world
  • Airbnb: create a world where anyone can belong anywhere
  • Kellogg: nourish families so they can flourish and thrive
  • Google: organize the world’s information and make it universally accessible and useful
  • AIG: help people manage risk and recover from the hardship of unexpected loss
  • Southwest Airlines: democratize the skies
  • USAA: provide extraordinary service to people who had done the same for their country

The reason that a company’s purpose may have a symbiotic relationship with strong performance has to do with the overlapping of personal interest, the common good, and business logic.

Many companies, when articulating a credible purpose, create positive energy that proves to be contagious. They also improve in the areas of self-governance, self-motivation, and healthy pressure to do good work.

A noble and well-articulated purpose makes people feel proud, inspired to make a greater effort, be more creative and more determined in their commitments. The purpose can become a transcendent cause capable of rallying the members of the company around a shared task.

This all creates a virtuous circle that results in more collaboration between people, more learning, greater creativity, and ultimately better performance with less perceived effort.