Notes on creating a purpose-driven business strategy

Here are some notes about the framework I use to help clients design their business strategies. It also serves as a great framework to create the foundation for a business plan.

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PURPOSE

The framework start with purpose - the WHY. For example, Starbucks’ purpose is to inspire and nurture the human spirit.

As the core of purpose are three questions we need to answer:

  1. Who do we serve?
  2. How do we help them?
  3. Consequently, how does that transform those we serve?

CONCEPT

Based on the purpose, we derive our concept. The word “concept” means different things to different people. Consequently, there are countless ways to express the concept. I categorize the variations of ways to express concepts into three kinds.

KEYWORDS / KEY PHRASES
In this variation we express the concept as keywords and key phrases as if they were the core and key ingredients of the our strategy and business. For example, at the core of Starbucks’ strategy are human connection and coffee.

EXPLANATION
Here we express the concept as a clear and concise explanation. The explanation can be formulated based on various frameworks. For example, you can structure the explanation based on the marketing mix (product, price, promotion, and place) or something as simple as who, what, where, how, and why.

ONE-LINER
This is by far the most difficult form to nail down. If the explanation variation is the elevator pitch, this would be the tweet version. Here are some examples.

Going back to the Starbucks example, the one-liner is the third place.

MUJI explains their concept as - living as part of a community, simply, conscientiously, and in harmony. They capture the explanation in a simple one-liner in Japanese: kanji-ii-kurashi.

Another example is Peach Airlines, an Japanese airline known for low fares and fun service. Their concept is captured in the phrase sora wo tobu densha, which means a train that flies in the sky.

Here’s one last example. Union Square Ventures is a investment company and they call their strategic focus an investment thesis. Here’s their thesis in 140 characters:

invest in large networks of engaged users, differentiated by user experience, and defensible though network effects

STRATEGY

In the strategy section, we want to articulate the key components of your strategies.

A great example of this is the transformation agenda Starbucks created in 2008 to turn the company around. The agenda stated seven big moves:

  1. Be the undisputed coffee authority
  2. Engage and inspire their partners
  3. Ignite the emotional attachment with their customers
  4. Expand their global presence-while making each store the heart of the local neighborhood
  5. Be a leader in ethical sourcing and environmental impact
  6. Create innovative growth platforms worthy of their coffee
  7. Deliver a sustainable economic model

Learning from this example, a good way to articulate strategy is to come up a list of bold moves for your project or business.

Another great reference for strategy is Elon Musk’s Master Plan for Tesla. (Part two of their master plan is here.)

  1. Create a low volume car, which would necessarily be expensive
  2. Use that money to develop a medium volume car at a lower price
  3. Use that money to create an affordable, high volume car

The Master Plan provides a clear road map (a series of steps) on what needs to be done.

From Purpose To Strategy

So there you have it - my framework to help your organize and articulate your purpose, concept, and strategy. This framework is still evolving and I’ll be sharing my thoughts in the future.

A question to help you set big, hairy, and audacious goals

I’m currently reading Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs, and I came across this helpful question for setting big goals.

Jim Collins and his team came up with the concept of big, hairy, and audacious goals (aka BHAG). The author of Measure What Matters, John Doerr, explains:

A BHAG is a huge and daunting goal—like a big mountain to climb. It is clear, compelling, and people “get it” right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line.

There is a chapter on Bill and Melinda Gates Foundation. In the beginning they started to enlist brilliant people to help them realize their mission where everyone can have a healthy and productive life:

So its leaders enlisted scores of brilliant people who’d devoted their lives to global health and told them, “Quit thinking about incremental progress. What would you do if you had unlimited resources?”

What a great question to help us set ambitious goals. I end this post with the same question to you and me:

What would you do if you had unlimited resources?

22 inspiring business purpose statements

I have a friend who loves Pokémon Go. He plays the game and collects Pokémon whenever he gets the chance.

I, on the the other hand, collect purpose statements. Whenever I come across one, I add it to my collection. (You can find the collection on Pinterest.)

Today I’d like to share with you my favorite ones:


Amy’s Drive Thru is returning to the roots of American fast food, serving lovingly handcrafted food to nourishing hard-working citizens, busy families, and road-weary travelers. - Amy’s Drive Thru

Our common purpose is to help people achieve their ambitions. - Barclays

Our mission is to create a better financial future for our clients. - BlackRock

Strive to champion every client's goals with passion and integrity. - Charles Schawb

To refresh the world...To inspire moments of optimism and happiness...To create value and make a difference. - Coca-Cola

Helping people on their path to better health. - CVS

We deliver much more than parcels and packages and ensure containers arrive on time: we deliver prosperity, we transport health, we power growth, we deliver joy. Every day we connect people, improving their lives. - DHL

We serve the world by making food people love. - General Mills

It’s our core purpose and ultimate intention to EMPOWER PEOPLE - through education and solutions - so they can live their healthiest, happiest life. - Honest

Fulfilling dreams of personal freedom is more than a phrase. It's our purpose and our passion. - Harley Davidson

We care for people so they can be their best… We believe that being your best is about being your true self - engaged, fulfilled and ready to take on the world. - Hyatt

Throughout our history we have been where the growth is, connecting customers to opportunities. We enable businesses to thrive and economies to prosper, helping people fulfill their hopes and dreams and realize their ambitions. - HSBC

Empowering people to stay a step ahead in life and in business. - ING

Nourishing families so they can flourish and thrive. - Kellogg’s

Our ultimate purpose is to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future - experiencing the endless human possibility. - LEGO

Our purpose is to build trust in society and solve important problems. - pwc

To connect People to what's important in their lives through friendly, reliable, and low-cost air travel. - Southwest Airlines

To champion everyone's right to be happy and healthy. - Walgreens

Saving people money so they can live better. - Walmart

With great courage, integrity and love – we embrace our responsibility to co-create a world where each of us, our communities and our planet can flourish. All the while, celebrating the sheer love and joy of food. - Whole Foods

Wirecutter supports our readers with thousands of hours of reporting and testing to help you find the stuff you need in order to live a better life. - Wirecutter

Yoobi was born to make colorful, vibrant tools that spark learning and creativity. - Yoobi

The Purpose of Amy’s Drive Thru’s

Amy’s Drive Thru is a different kind of fast food restaurant. It’s striving to be the first 100% vegetarian national fast food chain. (Here’s an article about this at Business Insider.)

Starting with Why
Visit their website and you will first come across their mission statement first and foremost. This is Start with Why in action.

Amy's Drive Thru is returning to the roots of American fast food, serving lovingly handcrafted food to nourish hard-working citizens, busy families and road-weary travelers.

Breaking the mission statement down, we see the following key elements:

  • How they do it: return to the roots of American fast food, serving lovingly handcrafted food
  • Who they serve: hard-working citizens, busy families and road-weary travelers
  • What do they do: nourish

As a challenge, reflect on these three questions today:

  1. Who do you serve?
  2. What do you do?
  3. How do you do it?

BlackRock’s 2018 letter to CEOs on how companies must have a social purpose and pursue a strategy for achieving long-term growth

BlackRock is one of the world’s largest investment management company. BlackRock’s 2018 annual letter to CEOs touches on the important of purpose in business. There are lots of good stuff in here. Here are my favorites parts:

On the backdrop for companies needing to be more purposeful:

Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.

On the consequences of not having a sense of purpose:

Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth. It will remain exposed to activist campaigns that articulate a clearer goal, even if that goal serves only the shortest and narrowest of objectives. And ultimately, that company will provide subpar returns to the investors who depend on it to finance their retirement, home purchases, or higher education.

On purpose AND profits:

Your company’s strategy must articulate a path to achieve financial performance. To sustain that performance, however, you must also understand the societal impact of your business as well as the ways that broad, structural trends – from slow wage growth to rising automation to climate change – affect your potential for growth.

On understanding the companies’ roles and impact:

Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world? Are we using behavioral finance and other tools to prepare workers for retirement, so that they invest in a way that will help them achieve their goals?

LINK: Larry Fink’s Annual Letter to CEOs

Why does purpose matter? Five reasons.

Over at IDEO U I recently came across a great article highlighting five reasons backed with research and studies on why purpose matters. It boils down to this:

But the research is clear, individuals are more fulfilled and organizations perform better when they’re rooted in an authentic purpose.

It’s a quick and simple read with some nice colorful infographics. Here are the five reasons:

  1. Lower risk of death - “researchers found that people who demonstrate a sense of purpose in their lives have a 15% lower risk of death
  2. More fulfilled at work - “The 2015 U.S. Purpose Index study found that purpose-oriented employees have 64% higher levels of fulfillment in their work.
  3. Higher employee retention
  4. Meaning over recognition - “84 percent of millennials say that making a difference is more important than professional recognition.
  5. Higher returns for purpose-driven companies

In case you’re interested, here are the studies and research the article refers to.

  1. Purpose in Life as a Predictor of Mortality Across Adulthood
  2. 2016 Workforce Purpose Index Study
  3. Becoming irresistible: A new model for employee engagement
  4. 6 MILLENNIAL MOTIVATORS: A GUIDE TO WHAT MOTIVATES MILLENNIALS AT WORK
  5. Why a Purpose-Driven Mission Is Key to Motivating Millennials
  6. Firms of Endearment

If you’re interested in more research and studies about purpose, Here's a list over here.

Wirecutter's purpose statement plus a purpose statement template for your website

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I recently visited the Wirecutter website to look for recommendations for a mobile battery pack. While over there I came across their purpose statement near the top of the page.

Wirecutter supports our readers with thousands of hours of reporting and testing to help you find the stuff you need in order to live a better life.

Simple and clear.

Using this as a case study, we can come up with a purpose statement template for our own websites. Their purpose statement has four key elements:

  1. Who are you? (Wirecutter)
  2. What do you do for your customers? (Support readers with thousands of hours of reporting and testing.)
  3. How do you help your customers? (Help them find the stuff they need.)
  4. As a result, what will they achieve or become? (Live a better life.)

In template form:

[You or your company] [What do you do for your customers?] to help them [How do you help your customers?] in order to [As a result, what will they achieve or become?]

I made a simple PDF worksheet, which you can download it here.