Archive for July, 2011

I was discussing the importance of “core purpose” with a client when their newest team member (a newly minted marketing MBA) piped up and argued that “The core purpose of a business is to make money.” I was gobsmacked. (Really? That’s what they’re teaching? What do you call an observation that is simultaneously obvious and useless?)

In September 1996, Built To Last authors Collins and Porras observed in the Harvard Business Review, “Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices endlessly adapt to a changing world.” They go on to say that companies that do “have historically outperformed the general stock market by a factor of 12.” By contrast, those that don’t often find themselves scurrying after minor market opportunities and living off the crumbs left by more successful competitors.

The article, Building Your Company’s Vision, is part of the collection HBR’s 10 Must Reads On Strategy.  The Kitchen highly recommends reading it cover to cover. Until you find the time, here’s the gist reduced to a single illustration.

Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies endlessly adapt to a changing world.

This picture says you need to have a goal. Not just hitting this year’s revenue numbers, but a Big Hairy Audacious Goal — something like “displacing Microsoft” or “a store in every town in America.”  That goal should be a byproduct of your adding value to the world in ways that no other company can — your envisioned future. (Henry Ford envisioned a world where the streets were free of horse dung because every man owned a car. Seriously.) You get there by leveraging your core technology into a unique and compelling value proposition delivered by a business model designed to capture the market. When things get ambiguous, you and everyone in the company can make good decisions focusing on the company’s core purpose and not straying from its core values.

Sound like too much “peace and love?” Anyone who is invested in your company for the long term will love it. And it will bring you peace of mind.