What’s the Purpose?
Dave Stangis and Katherine Valvoda Smith, authors of 21st Century Corporate Citizenship: A Practical Guide to Delivering Value to Society and Your Business, say their book is “for every business person thinking about how to differentiate their company and maximize business and social value—from the sole proprietor to those working in a global megacorporation.” The book includes a two-part foreword by Denise Morrison '75, president and chief executive officer of Campbell Soup Company; and Carroll School John and Linda Powers Family Dean Andy Boynton. Here’s an excerpt from a chapter that addresses a basic step in the process—titled “Connecting Corporate Citizenship to Business Purpose.”
What’s the purpose of the company you work for? Stop and think about that for a moment. Why was it originally created, even if that was many years ago? This can be an interesting question to ask, and a difficult one to answer. There’s a very good reason to make the effort. In the process of exploring these issues, you’ll learn how to design a corporate citizenship strategy and program that is relevant, comprehensive and–most importantly–that works. This in turn will enable you to become more knowledgeable and successfully influential within your company.
All successful businesses were created originally to fill a market need or solve a societal problem. This is the core of purpose. The purpose of your company could have been to make life more convenient, to provide something essential, or even to create an exciting experience. Depending on how long your corporation has been around it may still be providing that same solution; alternatively, the company may now be selling products and services that address problems that did not exist at your founding with solutions that were unimaginable. At its core a successful company delivers something to the world that only it can provide in its distinctive way. It’s a special point of differentiation from its competitors. Purpose is the reason your company exists. It is related to vision and precedes strategy. When you have your company’s core purpose clear, it should guide your corporate citizenship.
Let’s look at some sample company websites to better understand the concept of purpose (Table 1).
Table 1: Company’s Business Purpose
This is the Company’s Purpose
This is How They Realize Their Purpose
“3M is a global innovation company that never stops inventing.”
|“Over the years, our innovations have improved daily life for hundreds of millions of people all over the world. We have made driving at night easier, made buildings safer, and made consumer electronics lighter, less energy-intensive and less harmful to the environment. We even helped put a man on the moon.”|
|“Campbell Soup Company’s purpose: Real Food That Matters For Life’s Moments.”||“For generations, people have trusted Campbell to provide authentic, flavorful and readily available foods and beverages that connect them to each other, to warm memories, and to what’s important today.”|
|“McDonald’s reaches customers with enjoyable meal experiences wherever they are.”||“McDonald’s is innovating new tastes and choices, while staying true to customer favorites. Modern service. Personal engagement. Great-tasting burgers and fries. Building on our commitments to our people, our communities, and our world.”|
The purposes of the example companies have changed relatively little over time. It’s the way they realize their purposes that’s evolved, as their operating contexts have changed over the years.
It’s not always easy to uncover this core purpose, but if you can get it right you’ll have a solid foundation that provides the justification and boundaries for your business strategy and corporate citizenship program. What’s more, unlocking a company’s core purpose can unleash many new ideas, helping you to think more imaginatively and broadly about how corporate citizenship can contribute to your company’s purpose and unique ideal. Your company’s purpose is here to stay, representing the value it provides to your customers year after year. It’s not a program or a campaign, it’s for life.
Think about Ford Motor Co., for example; the business was originally created to provide affordable transport for everyday people, and it still does that today. Ford changed its business model to adapt, like all companies do. It went from mass-producing a single model in a single color, to customizing individual models and features and vehicle types (sedans, coupes, trucks, hybrids). In today’s sharing economy some consumers either can’t afford or aren’t interested in owning a car, but they still want to be able to use one from time to time. So Ford has developed partnerships with technology companies, and now leases vehicles to ride-sharing systems as well as selling them to individual owners. The company is still true to its original purpose of giving people an affordable way to travel from place to place, just not in exactly the same way it used to.
We mentioned McDonald’s in our examples above. Their original purpose was to serve fast, family-friendly meals on the go, to the increasingly mobile society of mid-century America. When McDonald’s was founded people ate out less, mainly at lunch and dinner; McDonald’s therefore came up with the solution of burgers and fries. They’ve interpreted that purpose across both decades and geographic regions. As work hours became longer and more women worked outside the home there was higher demand for meals on the go at different times of day, so McDonald’s developed a popular breakfast menu and expanded its service hours. In the U.S., the breakfast menu is so popular that McDonald’s now serves breakfast all day. McDonald’s expects to have more than 450 restaurants in India by 2020, and none of them serve beef. You can see how they’ve interpreted their purpose through a changing context and applied their core competencies (replicable inventory and fast, easy preparation) to new contexts; if they had thought about their company purpose as “getting customers fast burgers,” they wouldn’t have had the flexibility to apply these skills to changing times and environments.
After all, in the 1950s and 1960s “fast, affordable, family-friendly meals on the go” were defined very differently to how they are today. In those days delivering hot, tasty, and consistent burgers and fries from clean stores, being supportive of the community with gifts in kind, and supporting the local little leagues, was sufficient to fulfil their purpose. But as consumer expectations changed over time and geography, and as their business grew, McDonald’s had to maintain their core competencies in menu planning, purchasing, and training, and add new ones in nutrition, wellness, and environmentally friendly packaging. Now they have wellness initiatives for families to understand better the nutritional profiles of their menu items, and offer training and development to employees (Warren Buffet has called the company a gateway to future employment). Their commitments have changed as their context has changed, but their purpose has not.
What this has to do with you
Why is your company’s core purpose of any concern to you? You want to set up environmental programs, develop an employee volunteerism strategy, and help your organization use its assets to do more good in the world.
It’s important because if your strategy, programs, goals, and metrics aren’t tied to your company’s purpose and strategy, you lose the opportunity to reinforce the purpose and support the strategy. How can you expect to get resources and enlistment to execute if you’re not advancing your company’s purpose and strategy?
If you bumped into your CEO or another senior executive in the hallway, could you explain what your business is trying to achieve right now, with what resources, and who’s involved? Could you name the stakeholders who have a say in all this (the people affected by the strategy, such as employees, customers, suppliers, and investors)? Would you be able to identify your corporation’s key customers, what investors think about the company, and how easy (or otherwise) it would be to engage employees to act on your corporate citizenship vision?
If you couldn’t do this, you’re not alone. Most people in your company wouldn’t be able to, even if they were at a very senior level. In fact, after you’ve worked through this chapter, you’ll be more knowledgeable about your own firm than most anyone else in it. How’s that for a great start?
Business purpose, vision, and strategy
By the way, if you’re wondering what the difference is between a company’s purpose, vision, and strategy; it’s this: purpose is the motivation for all it does; vision is a vivid, easily communicated image for how the world will be different if it’s successful in achieving its objectives; and strategy is the plan of action for how it will compete in the market to achieve this vision. Purpose is the reason you’re undertaking your strategy, and usually doesn’t change. Strategy changes as customers, consumers and markets evolve. Later on we’ll look at strategy in more detail; for now, just know that it springs from your corporate purpose.