At a time when employees are more than ever asking why things are done in a certain way, companies often stumble over the first step toward an answer―a statement of purpose.
Compelling purpose statements require key elements of great writing such as tight language, careful word choice, strong verbs, emotion and objective reporting about what the company does. We have five tips on how to write, or review, your organization’s purpose statement, along with a few examples, good and bad.
Why purpose?
A clear purpose statement won’t answer all the questions of an increasingly skeptical workforce, but it’s a start. Employees, managers and senior leaders should use it to approach those questions.
Employees who understand their employer’s purpose are more likely to be productive and less likely to change jobs.
Yet less than 3% of Glassdoor reviews mention a company’s purpose, according to an analysis of 150,000 reviews for 81 of the largest U.S. retail and consumer products companies published in the Harvard Business Review in March 2024.
“Reviews that did touch on company purpose panned it nearly as often as they praised it,” according to the study’s authors, three partners with management consulting firm Bain & Co.
Although some companies interchangeably use the terms Purpose, Mission and Vision Statements, they should address different questions.
1. Why? Not what or how. Purpose, Mission and Vision Statements should answer different questions. Purpose (why a company does what it does), Mission (what a company does) and Vision (what success will look like).
Companies often focus on the what instead of the why, Anne Chow, former CEO of AT&T Business, writes in an excerpt from her new book on management.
For example, property and casualty insurer Erie Insurance, a Fortune 500 company, highlights the “what” when it says: “Our founding purpose: …To provide our policyholders with as near perfect protection, as near perfect service as is humanly possible and to do so at the lowest possible cost.”
A good example is rival Allstate insurance, which says:
Providing protection to help people achieve their hopes and dreams has always been Allstate’s purpose. It’s the why behind everything we do.
The world is unpredictable. When the unexpected happens, we’ll be there to face it with you and provide protection to keep your life moving forward.
2. It’s not the money. Researchers at King’s College London analyzed 66 purpose statements from “leading organizations” worldwide and found that often statements focused on “performance or profit aspirations.”
“Statements like these point to a mission or goal, but not a purpose,” they wrote in 2023. “Purpose isn’t about profit maximization; it’s the reason the organization exists.”
For example, distributor Graybar Electric at one point said its purpose was “to be a profitable, progressive business that provides employees with long-term career opportunities and the financial means to achieve a high quality of life, both while working and into retirement,” according to Purpose Brand.
The purpose statement has since been replaced on the website with a mission statement that says the company serves “as the vital link in the supply chain, adding value for customers and suppliers with innovative solutions and services.”
(The Chicago-based communications agency published a list of purpose statements by 115 Fortune 500 companies in July 2024 that’s already a little out of date.)
Likewise, freight railroad CSX’s purpose is “to capitalize on the efficiency of rail transportation to serve America.”
3. Be specific. “The foundation of any purpose statement is an explicit reference to the specific, pressing human, societal, or environmental problem(s) the organization seeks to address or alleviate,” according to a trio of management professors led by Christopher Michaelson of the University of St. Thomas in St. Paul, Minnesota. They wrote in “strategy+business,” a publication of Big Four accounting firm PwC in 2020.
Yet many companies offer a purpose with little or no connection to what they do, such as Danaher, which has said, “Our shared purpose—helping realize life’s potential.”
You’d think the Washington, D.C.-based company was a chain of psychological counseling centers, not a biotech and diagnostic equipment company.
In contrast, Aramark says in part, “We share a passion for hospitality, it’s at the foundation of everything we do.”
Executives and employees of the food services and facilities management company could ask themselves: Are we giving guests a generous and cordial reception?
(Many companies do not live up to their lofty purpose statements, I’m afraid.)
4. Take a hard look. Fuzzy purpose statements reflect a failure to do the kind of reporting about the company that journalists would do, including interviews and data analysis.
“Statements of purpose are not limited to what can be found on a company’s website,” Michaelson and others write.
To create value statements, Professor Erin Meyer of INSEAD business school says, “Identify the tough dilemmas your employees routinely face and clearly state how they should be resolved.”
Take the same approach with purpose statements. Under the statement, what should employees do differently?
5. Keep it tight. A purpose statement should be distilled into a simple sentence. It can be supported by a sentence or two, like Allstate’s statement, quoted above. Here are a couple examples we like in part because they aim to convey an emotion:
Mondelez International says: “We empower people to snack right. This is our purpose.” It tries to balance taste with nutrition.
IT hardware services company Kyndryl says: “We make the complex simple to enable customer innovation.” It speaks to the feeling of relief when technology works.
Campbell’s, which recently dropped “soup” from the name, says: “Connecting people through food they love.”
Walmart says it is “helping our customers save more of their hard-earned money for the things they care about most.” Every company says it tries to keep prices low, but this statement by the general merchandise retailer expresses a key motivation of its customers and the company.
Purpose statements aren’t magic talismans protecting against disaster. A failed computer update by CrowdStrike in July 2024 cost Fortune 500 companies more than $5 billion and severely damaged the network security company’s reputation.
What does the company say? Our mission is to stop breaches and our purpose is a promise: to provide safety and security to some of the world’s largest, most influential companies and, by extension, the billions of people around the world who use their services.”
It was more than an “Oops.”
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