May 2023

A Leadership Story: The Purpose Statement

by Ken Smith

You cannot have leadership without purpose. Leadership is influencing people — by providing purpose, direction, and motivation. To best clarify this focus, organizations need to articulate a purpose statement. How do leaders navigate drafting this concise statement? Why is it so important? Let me share with you an inspiring story about a team that did just that.

I was conducting a leadership development program for a larger organization who did not have any stated purpose, values, or vision. With 17 of their top leadership executives gathered in the room, we started with a discussion on purpose. We defined the purpose as a broad statement of what they do, who they do it for, and how and why they do it.

As an exercise, I asked each person to write down what they thought the company's purpose was on a 3x5 index card. I then collected the cards and began to read them in random order with no names associated with the answer. It was an eye-opening experience, and several things became very apparent to them:

  1. Nobody's answer was even close to what the owner wrote down.
  2. No two people had the same belief as to what the company's purpose was.
  3. If the leaders of the organization were confused, they could only imagine how the rest of the organization saw things.
  4. Everyone agreed they needed to come to a consensus on what their purpose was.

A purpose statement is the critical foundation for any organization. At its root, the purpose of all organizations is to exist. A deeper dive into purpose reveals more than just survival. It helps an organization know how to flourish. At a practical level, purpose is necessary to:

Focus on what is important. There are never enough resources (time, people, information, equipment, raw materials, funding, expertise, or energy) for all the things that need to get done. People must make decisions on how to prioritize those. A clear purpose gives a beacon to follow. A simple question people can ask themselves is, "to what extent does this support the organization's purpose?"

Guide decisions and serve as part of the Commander's Intent. People must make the best decisions they can with the information they have. If they are lucky, they have 80% of the information. Usually less. A clear purpose helps people understand the equivalent of the Commander's Intent. The Commander's Intent is the single unifying focus for the entire organization.

Be the shared interest when conflicts happen. In a conflict, defined as a sharp disagreement of ideas or beliefs, people often get hung up on their position — the solution they most prefer. Good leaders help people focus on the shared interest and find objective criteria to make decisions. A clear purpose provides a shared interest and helps resolve conflicts more effectively.

Tell the world how you serve others. All organizations should serve mankind and deliver something of value. A purpose statement shares with the world what that service is and how it benefits the world. It helps people understand your organization's why.

Helps consumers decide if they want to do business with you. Businesses thrive when they focus on revenue and relationships. Some consumers care deeply about more than just the product or service delivered. They care about the organization they support with their dollars. They care about the relationships built with each other.

Attracts talent. High performing people will perform better if the purpose of an organization is aligned with their personal values and beliefs. Many people will choose to work for an organization solely based on the purpose of the organization. In a time when finding good talent is challenging, a clear purpose will help an organization bring the right people to the door.

Good purpose statements are concise and usually a single sentence. They are clear and inspiring. They leave an impression on people. They make people want to get up every day, be present, and be engaged.

So, how does the story end? They took the best of people's ideas, had some very good discussions, and agreed upon a shared purpose statement:

"Providing reliable and consistent service to our customers with an emphasis on quality and safety."

Interestingly, the final agreed upon purpose was quite different than what the owner wrote down in the initial exercise. Fortunately, the owner spent more time listening to people and less time demanding his way, demonstrating the servant mindset of a great leader.

To learn more about Purpose and its role in world class leadership, please download our free whitepaper — The 5 Elements of Word-Class Leadership — How to Achieve Focus and Alignment for Greater Organizational Success.