Purpose before strategy

Generally, there is not much difference in how strategies are developed and subsequently executed across different companies, which may be an indication that we have reached the ultimate stage of how a company can do strategy, and from now on it could just be a matter of refining and optimising the details of that playbook.

On the other hand, this can also be an opportunity to look for additional ways to differentiate and develop the company as well as to foster a new level of impact. This also includes being open to the fact that the strategic playbook might be missing a rather crucial piece for the company to be relevant, not only now but also in the future. There are surprisingly many strategies that completely overlook the company’s purpose or fail to prove a consistent link between purpose and strategy. The link may have been briefly visited, often at the company’s beginning; however, the consequences of such purpose is often not handled strategically and consistently.

That being said, some exceptions are interesting to keep up with right now.

Here you will see several companies that position their purpose before their strategy, and use their purpose to determine whether they are on the right path in all their strategic choices and execution of tasks. Here, it is also used as the most important indicator for which decision is the right to make. They simply move the purpose of their company from the outskirts of their consciousness to be the focal point for all strategic decisions. They understand that their purpose is the leading force for impact, profitability and relevance as well as guiding their strategic choices and investment decisions.

When you start working in this way, the company will stand before the opportunity to get several benefits that other companies do not have:

1. A clear purpose expands a company’s opportunities to re-define itself as well expand its understanding of which field it is playing on – and for some, this, quite fundamentally, includes defining what game they are even played. A purpose-driven company considers its ecosystem much more broadly and sees the world through the lens of its purpose. Thereby, it defines which strategic focus areas and choices falls in line with the realisation of its purpose. A purpose is a far better radar for strategic decision-making rather than simply fighting for market shares in an already defined and limited market.
2. Another benefit you get is the ability to deepen the understanding of the value you can bring to the ones that the purpose targets. Typically, you will shift from a classic product-oriented approach to a much broader understanding of value from the outside in – rather than from the inside out.
3. A third benefit is the company’s range. A consistent approach to the realisation of the purpose will always allow the company to look further and towards a wider area than more classic and traditional companies. Specifically, everyone both in and around the company has been directed to look and understand the words of the purpose through the same lens, which means that everyone has the opportunity to contribute rather than leaving the drafting and execution of the strategy to fewer people. Once you have finished your homework, the gap between strategy formulation and strategy realisation will be significantly minimised when the purpose has become what clears the table.
4. A fourth advantage is that individual attitudes, political agendas and sub-optimization are fiercely challenged by a consistent approach to the company’s purpose. A strategy process that has the purpose at its core will increase both speed and accuracy and challenges ideas and people that are not focusing on the purpose as the highest authority. It also gives the company the opportunity for more people to consider the same thing in the same way rather than having a limited and often too functional approach when it comes to strategic choices.

How to get started?

All of this sounds appealing and like something most companies could benefit from. Nevertheless, as with everything else you deal with, business benefits rarely present themselves on their own accord nor without conscious choices and investments being made. There are, of course, several prerequisites and requirements associated with the decision to start working more clearly with the company’s strategy, and it starts with the following:

1. The company’s purpose should be translated so that the core meaning behind each word is clearly defined, what the consequences of those words are, and what the company’s unique way of executing the purpose looks like.
2. The company should develop the modern version of KPIs (Key Purpose Indicators) telling everyone what good looks like and what contribution is valued regardless of functional business area.
3. The company should formulate its distinctive fundamental truths derived directly from the purpose, which indicate how the world is perceived and what the core values are. This is subsequently the foundation of everything that is being communicated and dealt with, both internally and externally.
4. The company’s managers should be trained in linking the purpose and the strategy in a consistent manner, which is not often something they have experienced as a part of their background or education.
5. The company should expand its understanding of the word ‘strategy’ and typically upgrade everything that relates to the ‘how’ and execution significantly.
6. The company should build organisation purpose capabilities that deliver on the impact as defined by the purpose.
7. The company should move the responsibility for the purpose away from Marketing, Public Affairs, or similar departments and into the area responsible for formulating and realising the company’s strategy. It would be even more beneficial to move the purpose even further so that it sits with the executive management team, where the CEO is ultimately responsible for the realisation of the purpose as their main priority.
8. The term ‘brand purpose’ should be removed from the company’s internal language since the purpose never can nor should be focused on branding which is usually about creating a perception rather than making it real in everything you do. Instead, it must focus on the company’s core, thus being the main force to realise the company’s desired impact for the world as well as the best commercial engine available.
9. The company’s strategy process should be optimised so that you start and end in the right place every time. Most companies’ process for formulating and executing their strategy lacks the most important box – the entire company’s purpose for existing, which is where the ultimate impact is clearly defined. Any work revolving around a strategy that does not have this concept incorporated into its core will miss out on significant competitive advantages and be less relevant in a world demanding meaning.