Strategy starts with Purpose and Vision (Part 1)

To develop an effective strategy for your company you need first to understand your purpose and vision.

Your purpose is why you exist. Your vision is the destination you are aiming for. They are the two foundations that your strategy should be built on, acting as its guiding light and underpinning every aspect of your company values, strategic initiatives and operational execution.

In this post I’ll discuss defining your purpose; next time we’ll look at the role that vision plays.

Purpose – why you exist

Purpose answers the question “Why does this company exist?”. It goes beyond just making money – it should attract talent, inspire your team and provide the context for everything the company does.

• Your purpose will talk about the positive impact your company can have on customers, your industry or even the wider world

• It can be the origin story of your company, explaining why you began and the journey you are on

• It can underpin your values and how the organisation’s existence and growth upholds those values

• Picking up on two of the circles in the Hedgehog Concept from Jim Collins’ book “Good to Great“, it can explain what you are passionate about and what you can be the best in the world at doing.

Discovering your purpose

There are many books that can help you think through your purpose. “Starting with Why” by Simon Sinek is good place to begin. It explores how natural leaders like Martin Luther King Jr have used “the Why” to help people truly relate to (and buy into) a product, service, movement, or idea. Sinek’s golden circle, with the “Why” at the centre of the “What” and the “How”, is very helpful.

Questions like these can be useful in defining your purpose:

• What big problems are you solving for your customer or industry?

• What is the ‘greater good’ that drives you and your team, beyond just making money? Making money is good – it’s important to build a profitable company – but I believe that a business is more likely to enjoy sustained growth and profitability if it is driven by something greater than profit alone

• This greater good can be a potential purpose. Your organisation might be saving lives or making them better; improving relationships; driving innovation or discovering knowledge; delivering justice or realising equality; protecting the environment; designing beauty; increasing business efficiency; or transforming an industry

• What inspires you and your team and gives you energy? In his book “Purpose”, Nikos Mourkogiannis outlines “four possible sources of energy for the company, four sets of moral ideas that can underpin purpose”:

• Discovery, or “the new”: think Sony, Intel and Virgin.

• Excellence, or “the good”: Berkshire Hathaway, Apple and BMW

• Altruism, “the helpful”: Walmart and Nordstrom

• Heroism, “the effective – Microsoft and ExxonMobil

• Other sources of purpose, less relevant to most corporates but certainly applicable to other types of organisations, can include patriotism, universalism, religion and the rule of law.

In some organisations the purpose is obvious and easily defined. Public healthcare and not for profits come to mind. But crafting a purpose statement in business can be more difficult. I think it’s helpful to start with your customer: what are you doing for them that is truly unique? What can change your customers’ life? What are the broader benefits that you deliver for society or for your industry?

Purpose at Aconex

Throughout the Aconex journey we recognised the importance of having a strong statement of purpose. We wanted to make it unique to us, and one that would engage and inspire our team.

To be honest, we didn’t really nail it early on but trying to define it pushed our thinking. Refining our purpose underpinned our strategic direction and was part of a robust process to develop our strategy.

In 2007 we were defining our purpose as to “Make managing projects easier.” We had two supporting elements: “Encourage fair industry practices” and “Reduce industry carbon footprint”.

We reviewed and evolved our purpose at intervals over the years. By 2018 it was “Connecting teams to build the world”. This picked up two key concepts for the company – project teams collaborating on the Aconex platform, and it being an essential tool for the delivery of the built environment globally. In hindsight, we hedged a little by adding a note on why we had this purpose and the benefit to our customers – “Transform how project teams work together – fairer, faster, easier and more efficient for everyone”.

As can be seen in the strategy one-pager below, our purpose underpinned strategic direction and its development. Once we had our purpose, we were able to build out our vision and values in alignment with it.