The importance of purpose in times of uncertainty
Following on from my earlier blog on ‘Leading when only the unpredictable seems predictable’, I promised a health check on how fighting fit your board is with regards to achieving sustainable success in times of uncertainty and change.
This blog looks at issues related to purpose and long-term strategy. Subsequent blogs will address culture and values; risk management and performance measurement; and, boardroom behaviours.
The power of purpose
It might seem paradoxical, but being clear on your purpose, expressing it in an inspiring way and having a well-thought-out, long-term strategy is even more important in times of major change and uncertainty, such as we are currently experiencing, than in steady state times when ‘more of the same’ has a better chance of carrying you through to a satisfactory, even if not outstanding, performance.
When the world is in turmoil, a clear purpose that expresses why you are in business and how you are going to achieve your goals will provide a much needed sense of direction to your team and guide decision-making, helping to identify which options are worth pursuing and which, though at first sight attractive, are more peripheral to your future success.
Bobbing up and down in stormy seas without a compass to help chart your course is not likely to increase your safety or motivate those sailing in your ship which is not to say that you may not need to complement your long-term strategy with some well thought through tactical manoeuvres.
Finding and fulfilling purpose
Having an inspiring purpose does not have to be about changing the world. For many businesses it will be about doing the ordinary extraordinarily well.
Whilst there will always be an element of personal preference in what we consider an inspiring purpose, a few that seem to capture the essence of their business include:
• Google’s mission “to organise the world’s information and make it universally accessible and useful.”
• IKEA’s vision “to create a better everyday life for the many people.”
• Virgin Atlantic’s mission statement which they recognise is “simple, yet the foundation of everything we do – ‘to embrace the human spirit and let it fly’.”
Regardless of personal opinion, we can surely all agree it is not just about being the largest or most profitable, such attributes may follow from fulfilling the purpose but are not the purpose itself.
Millennials are particularly keen on companies having a societally-positive purpose not just when making purchasing decisions but also with regards to their choice of employer and thus purpose have a vital impact on success in the war for talent.
Strategy that flows from purpose
An inspiring purpose is, of course, not enough on its own to drive a business forward. Sir Clive Sinclair’s electric car, John DeLorean’s gull winged vehicle or Sir Freddie Laker’s low cost airline are all testament to that. From the purpose, a clear long-term strategy aligned to the capabilities of the team needs to flow along with effective risk management and performance measurement and, above all, a healthy culture.
In terms of the length of time covered by strategic planning, the figure reported by the FRC that three quarters of UK listed companies only cover the next three years in their viability statements is slightly worry in suggesting their future horizon does not extend out very far and perhaps less than many of their counterparts in, for instance, Asia and parts of continental Europe.
How does your company fare?
The statements below can help you to assess the strength of your organisation’s purpose and strategy. It is suggested that boards ask themselves how well they are performing with regards to each of the issues covered and, more importantly, what improvements they could introduce that would help them build a more sustainable business for the benefit of their stakeholders and wider society.
1 Our business has a purpose that inspires team members, customers and others dealing with us.
2 We have a clear, long-term strategy flowing from the purpose, with appropriate milestones.
3 Our strategy is well aligned with our corporate culture and team capabilities.
4 We have the necessary financial resources to implement our plan.