In A Nutshell

The purpose of an organisation describes its reason for being. It gives the cultural centre around which everyone in the organisation can cohere. It is the point of unity for all members of the organisation.

“Organise the world’s information and make it universally accessible and useful”
— Google
“Create products that enrich people’s daily lives”
— Apple
“Transform energy globally, faster and cheaper than anyone imagined”
— Octopus Energy

Whatever you think about the individual companies presented here, the purpose statements are all short, concise and compelling. They are statements that give employees and customers a benchmark to evaluate the actual behaviour of the organisation.

The purpose of the organisation can be reinforced with a vision that briefly describes what the organisation and its wider context will look like as it moves towards fulfilling its purpose.

Effective Purpose

There’s no point having a purpose for the organisation if it has no impact on the behaviour of the organisation or on the outcomes it creates. To be potentially effective the purpose must have charm:

Compelling - short, concise, active with clear potential to create positive future outcomes that others can believe in

Honest - describing something that is not contradicted by the organisation’s history or existing products

Achievable - the achievement of the purpose can be envisioned by those working with the company

Realistic - aligned to the domain the organisation operates in, meeting an understandable need that others can recognise

Measured - the outcome must be recognisable so that progress towards it can be seen clearly

Even with these characteristics, the purpose will remain ineffective unless its creation is genuinely shared across the organisation and it is then fully shared across the organisation. Most critically, its impact must be real; its relevance to the day by day operation of the organisation must be obvious to customers and colleagues alike.

Levels

Green

Amber

Red

The Purpose Has Impact

The purpose is defined collaboratively across the organisation. The purpose is widely perceived to accurately reflect the intent and ethos of the organisation.

The purpose is shared across the organisation and beyond, with positive feedback being given.

Colleagues within the organisation perceive the impact of the purpose in their day to day activities. Leaders are seen to fully reflect the purpose in their behaviour and work.

External stakeholders can see the influence of the purpose in the outcomes produced.

The continued relevance of the purpose is reviewed as needed.

The Purpose Is Not Impactful

A purpose is defined, but may not include a wide enough audience to encourage full acceptance. The intent and ethos of the organisation may not fully embrace the scope of the purpose.

The purpose is not effectively shared within the organisation, so that some parts are not influenced by it.

Some colleagues may view the purpose cynically because they see exceptions being made that violate its intent.

There are some public outcomes produced by the company that seem to contradict the purpose statement.

The purpose may not be reviewed for an extended period, so that its relevance reduces over time.

There Is No Effective Purpose

There is no purpose, or the purpose has been mandated by senior management. It is unclear how the purpose relates to the intent and ethos of the organisation.

A lack of belief in the purpose means it has little impact in the organisation.

Widespread cynicsm means that the purpose is largely ignored and has little impact on the organisation or its activities.

Outcomes produced by the organisation are publicly seen to contradict the purpose statement.

The purpose is ignored and falls into disuse.