At People With Purpose, we distinguish purpose, vision and mission from each other in the following ways:
Today’s business leaders face continuous disruption, uncertainty and complexity. They are seeking strategies to increase the revenue resilience of their organisations, desperate to find ways to increase employee engagement, productivity, innovation capabilities and customer appeal, longing for clarity to simplify the many choices to be made in incomplete and imperfect circumstances. In the first instance, purpose is a powerful first filter for all decision-making. When unsure how to act, leaders can ask, “Will this decision bring us closer to, or further away from our Purpose?”
Increasingly, senior executives and boards are realising the power of a purpose beyond profit, and are reaping the substantial benefits.
Purpose is essential in achieving organisational alignment. Having an articulated purpose statement — an embedded understanding of why their organisations exist — helps organisations encourage employee engagement, clarify direction, and connect meaningfully with their customers and community. Knowing what business you are in is no longer enough. If you truly want to prosper in the long-term, you (and your stakeholders) have to know WHY.
The main difference is that mission statements often focus on what organisations do, whereas purpose statements provide insight on why they do it.
While mission statements tend to be more economically-centric, with a focus on success in terms of profit or market share, purpose provides a more holistic overview of value creation that takes into account the social benefits and social damage of business operations, in addition to shareholder returns.
It is generally agreed that a mission statement contains three basic elements:
Market: Who is your target customer?
Contribution: What product or service do you provide to that customer?
Distinction: What makes your product or service unique, so that the customer would choose you?
A mission talks about the who and the what and maybe even the how, but misses one of the key drivers of human motivation - why.
Historically, mission statements have often been dry, operational, profit-focused aspirations that sound like:
“maximise shareholder returns and make sure no one gets hurt”
or
“be the global leader in “industry” recognised for blah blah”
Although inherent in many mission statements, purpose as distinct to mission was popularised by Stanford alumnus Richard Ellsworth in his 2002 book Leading with Purpose: The New Corporate Realities. In it, he declared:
“Purpose expresses the company’s fundamental value – the raison d’etre or overriding reason for existing. It is the end to which the strategy is directed.”
Importantly, a sole profit motive cannot constitute an effective purpose. As the distinguished Peter Drucker stated:
“Profit is not the explanation, cause or rationale of business behaviour and business decisions, but rather the test of their validity.”
More recently, Aaron Hurst, author of The Purpose Economy, elevated purpose to “the new organising principle for innovation and growth.” He explains this as both an economic and cultural evolutionary response to the bygone eras of the agrarian and information economies.
Organisations that adopt a purpose statement as part of their canon generally sit purpose above mission because the ‘why’ informs the ‘what.’
Our purpose at People With Purpose is to equip business to improve the world. If you’d like to find out how we can help you to create a purpose and purpose-led strategy for your business, please book in for a free discovery session.
Here are some examples of purposes we’ve helped our clients to create to guide their strategy, leadership, operations, communications and innovation.
| Company | Industry | Purpose |
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Technology |
To improve the world through trust |
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Disability Services |
To make active goals accessible |
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Financial Services |
To fuel ambition |
|
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Technology / Communications |
To simplify technology to empower business |
|
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Arts |
To move communities |
|
|
Health Care |
To transform health care for individuals and communities |
|
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Business Network |
To foster feminine wisdom, impact and opportunity |
|
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Energy / Utilities |
Delivering energy today, powering your tomorrow |
|
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Health Care |
To connect patients to advancements in cancer care |
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Mining / Resources |
To progress responsible mining |
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Health Care |
To make world-leading care possible when lives end too soon |
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Manufacturing |
To make game-changing products together |
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Agriculture |
To lead Australian Agriculture |