What makes a great purpose statement?

This is a question we are often asked by clients who are interested in defining theirs. Over the years we have helped many clients do just that. Now, as purpose becomes more established in business thinking, a new trend is emerging: the ‘renewal’ or ‘refresh.’ In our latest CEO Purpose Report, we found a minority of CEOs think purpose can evolve over time. We found that interesting and wanted to interrogate why.

So we asked, if purpose is your ‘North Star,’ how can it move? Stars don’t move. Apart from the fact that they do – space, time, and infinitely expanding galaxies suggest so. But if you put aside the astrophysics for a moment, from our perspective here on Earth, the North Star doesn’t move much. And so, is the principle that purpose should be fixed still valid, or should it be able to evolve and adjust with the needs of the organization?

There are some circumstances when a purpose could evolve or change. A merger or de-merger for example, could set a business on a new course and it seems justifiable that purpose could change in that circumstance.

A new CEO may want to make their mark on an organization and redefine its purpose – but a great purpose should outlast a changing of the guard. We have seen that at Unilever and EY, where new CEOs have stayed true to their company’s purpose, with the added benefit that it provides continuity during times of change.

But should changes in macroeconomics, geopolitics, business strategy, market forces, competitor threat or innovation signal a need to change a purpose? The short answer is no. Not if your purpose is working. A great purpose should be a constant that guides the business. Yes, adapt your business strategy, launch new products, re-invigorate your brand, but your purpose – if it’s a great one – should not change. Take Apple for example.

So why do some CEOs believe it should evolve? Perhaps this comes down to the difference between a great purpose and an okay one. And if a purpose isn’t great, perhaps it isn’t fit to be one in the first place.

Here's a checklist to help you consider if your purpose is great.

Is it meaningful?

Is there an important challenge in your purpose that the business is contributing to?
And is it connecting what you do with what the world needs? Purpose should go beyond the business you are in to help you contribute to the needs of people and planet. It should help you consider how you can leverage your skills and expertise to contribute to a better, more sustainable future.

Is it authentic?

Is it true? Will your employees and stakeholders believe in it? Does it accurately reflect the role you can play in the world? The Body Shop’s purpose, “To fight for a fairer, more beautiful word” is a good example. Balancing its activist DNA with a responsible and sustainable vision of the industry.

Is it visionary?

Is it ambitious and far-sighted? Does it consider a future that you haven’t yet achieved? As Tiger Tyagarajan, CEO of Genpact puts it, “by definition, purpose is aspirational.” EY’s, “Building a better working world” sets out to constantly improve how the fabric of business works. It deliberately sets an aspirational vision that pushes for continuous improvement.

Is it limitless?

Can your purpose expand and stretch to encompass external and internal changes? And like Apple, as the world changes around you, can your purpose remain constant?

Is it participative?

Can you see how your all your stakeholders, not just employees and customers, can be engaged by it and contribute to delivering it? Does it touch and impact all audiences? Lego’s “Inspire and develop the builders of tomorrow” works as a call to action for employees as well as a mantra for product development and customer experience.

Is it actionable?

Most importantly, will it drive change? Will it force you to reconsider aspects of what you do and how you operate? Unilever’s “To make sustainable living commonplace” forced reconsideration of activities and resulted in bold decisions such as the divestment of units which could not support it. If you can continue ‘business as usual’ without consequences, or opportunities, your purpose needs a rethink.

If your purpose checks these boxes, your challenge is to action it. Make sure your business strategy delivers against it. Identify how your purpose provides opportunities for value creation. And think deeply about the implications that are highlighted by promising it.

And of course, if your purpose isn’t checking those boxes, perhaps it does require a refresh after all.