Understanding and Creating a Clear Purpose Statement

Those of you with whom we have worked know the importance we place on a clear sense of purpose. What is a purpose statement? It is the part of the Core Ideology that defines the organization, what it stands for and what you are trying to make happen.  Clarity on these elements are vital to attracting and retaining a high caliber workforce, which at the end of the day will determine your success.

Why This Matters:  The For-Profit Sector

Loyalty to your company, if it exists, is comprised of commitment to the contribution you make to society and to the quality of the team(s) that employees work with.

Without this, one just has a job and the loyalty is to making money and providing for family.  For these folks, loyalty lasts until a better paying opportunity comes along and retirement can’t come too soon.

So, for example, Sam Walton established Wal-Mart because he wanted “To give ordinary folk the chance to buy the same things as rich people”.  I am not certain they still hold that purpose, but it is clear that the strength of that purpose line and commitment to it propelled Wal-Mart to a world wide Goliath gobbling competition in its wake.  Mr. Walton insisted that corporate costs be kept to a minimum so as to provide goods as cheaply as possible to customers while still making money.

Why This Matters:  The Non-Profit Sector

Purpose statementThe same principles apply to the non-profit sector.  In fact, even more so.  Employees are seeking a fulfilling sense of mission to join.  Often, they chose the non-profit arena for that reason and have given up potential for greater economic gain in the for-profit sector in order to do so.

Similarly, donors to non-profits are drawn to a compelling purpose. So, clarity and commitment to a tightly defined purpose is essential.

But, there is another reason that I want to talk about.  I often find when looking at a community as a whole, that there are multiple organizations trying to fulfill similar roles.  They compete with each other akin to what you see in the for profit arena.  Yet, there are other needs in the community that go unfulfilled.  The boundary lines between non-profits get blurred, many try to do too many things and the community loses as a result.

This phenomenon arises for multiple reasons.  Some of them include:  1) organizations chase money, i.e. grants, wherever they can find them, and this dilutes purpose and introduces competition, 2) there is pressure from stakeholders to solve a problem that other organizations don’t seem to be able to solve.  So, in this case, the non-profit gets dragged into the arena of another organization because that organization is not performing.  An alternative strategy would be to work with that other organization to help it perform better, but the stakeholders have no patience and pressure your organization to jump in.

An Exemplifying Story

Early in my career I was running a non-profit in rural Alaska purposed to improve the health status of the population in the region.  Originally, my board did not want to involve itself with mental health and substance abuse issues, but the impact of these problems grew to the point that we were almost forced into involving ourselves.  These problems were the root cause of the low health status in the region, and the evidence simply could not be ignored.

But, the problem also attracted the attention of other non-profits in the region.  We all felt like we owned the territory and openly competed for funding.

At one point, our board chair decided to run for the legislature and won.  He came before us prior to returning to the state capitol for his second year.  These annual visits were to get the wish lists from all the organizations in the community.  He began the session as follows: “last year, six organizations in this town lobbied me for alcohol prevention and treatment funding.  Each of the six tried to make the case for why they should get the funding and the other organizations in town should not.  The picture I got was that of a patchwork of services that didn’t serve the community well, was duplicative, overly costly and hard for patients to navigate.  Well, here is the deal.  This year, I will accept only one request for alcohol prevention and treatment services.  It is up to your organization and the five others to figure out who that is going to be.  If I am approached by more than one organization, I won’t seek funding for any of you”.

Well, the six of us met, worked it out, got the funding and services greatly improved.  We were able to do a great deal more with less.  Further, the services improved because we all worked together to design the best approach.  In short, we all worked on a solution rather than compete.

How to Get There

First, define clearly the products/services you provide.  Do this from the point of view of your customer.  That is, what is the problem you are solving or the need you are fulfilling.

clear sense of purposeFor example, Avis is not in the rental car business. It is in the business of providing safe, affordable, accessible transportation when away from home or without a vehicle.  A hospital laboratory is not in the business of producing lab tests, but providing patients and physicians with definitive information on the condition of the body.

I advise this exercise for two reasons, one to get clear on what you are trying to provide and why but also because you should be measuring whether you are getting this result and not whether you are doing what you are supposed to do.  That is, I can ask the customer “was it safe, affordable and accessible?” or “are your clear on your condition or status of health?” to determine if you got your product.  This is more important that knowing how many lab tests were provided or rental days sold.  Knowing whether your met the customer need will tell you whether you are going to be able to grow or whether you are dying as an organization.  Because if you are not fulfilling that need or solving that problem for your customer, someone else will do so and run you out of business.  The customer will find a solution somewhere, somehow.

Creating a Purpose Statement

How do you write a clear purpose statement? Having defined what customer needs you are fulfilling, you are ready to take a shot at why you exist or your purpose statement.  Too often, purpose or mission statements simply state what you do.  So, for example, a hospital might say, “To meet the secondary health care needs of our community”.  But, why?  What difference does that make?

Disney defined its purpose as “To make people happy”.  It says nothing about what they do but it explains and is the driver of everything that they do.  Do you get the distinction?

Defining your products can lead you to clarity of purpose as you can then ask yourself, why am I providing these things for people?  What’s driving that?

Also, once you have clarity of purpose, you can then go back and ask yourself, are those products fulfilling that purpose?  Are they still needed?  This can protect you from a creeping expansion of your services that results in doing many things OK rather than a few things really well; a common trap for non-profits and for-profits alike.

What This Gets You

I am now working with three organizations in the same community.  One focused on economic development, one focused on the development of the downtown area and one focused on promoting and celebrating community/business.  All three had unclear purposes.  All three lacked passion.  All three were somewhat adrift in the sense that their employees were not laser-focused on a long-term result and were not as committed as they wished to be.

All three have gone through or are about to complete defining clearly their products/services, their purpose and their long-term vision or destination.  In doing so, they looked carefully at what separates them from the other organizations in town.  What is the unique contribution they are committed to?  They have also clearly defined their boundaries and made clear in policy that they will support the purposes and visions of others rather than try to duplicate or supplant them.

As a result, each organization is energized, its staff is much more productive and the community will no doubt move ahead much more quickly than would have been the case without such clarity.

What to Do

If you are a for-profit, get clear on how your purpose and value-proposition differs from your competitors.  Make sure that your product line supports that purpose.

If you are a non-profit, do the same but look at your community rather than your market.  Are the boundaries clear between yourself and other community groups?  Are you duplicating services? How best can you serve the community?  Do you need to work with others in order to get this clear and move your community forward?