Three steps to defining your organisation’s purpose

What should we do?

This is one of the powerful questions we must repeatedly ask of ourselves and our organisation.

In our fast-paced environment the answer changes all the time. It is why we may need to change the management mind-set from Strategy to Purpose.

The latter is iterative, involving the entire organisation all the time. The former takes too long to develop and even longer to adopt and adapt.

Defining and clarifying organisational Purpose should not only be the starting point, but continually challenged in light of its Environment, its ability to Create Value and its Comparative Competence.

1. Environment Analysis

Environment Analysis considers the context of the organisation. This includes the traditional framework such as competitors, suppliers, demographic and political, but also what we know today about the future. Our customers and our non-customers.

In three sporting organisations that I recently worked with, our greatest insights came from non-customers. They gave us the answers to what was lacking and where there was a need to be fulfilled.

2. Creating Value

Value creation is the critical link between the Environment and the organisation’s Comparative Competence. This is where true innovation and entrepreneurship is exercised.

Where can we add value? What job needs to be done? Where is there a need to be fulfilled? What problem can we solve? How can we alleviate a concern?

Returning to the sporting case study, in one organisation, the answer to the Value Creation question was as simple as providing male role-models in sport that impressionable young kids could aspire to. In another it was an engaging and entertaining game-night experience. In a third it was an opportunity for social engagement for participants.

3. Comparative Competence

Comparative Competence refers to the organisation’s core competence in comparison to others. An understanding of not just what its strengths are, but the relevance of those strengths in the environment and, more importantly, how they can be employed to create value.

This is not a generalised appraisal of competence or even comparative competence but a specific examination of how well-placed the organisation is to solve a particular problem or perform a unique service compared to others in the environment.

There are many instances of organisations developing competence from scratch or bolstering existing abilities, either organically or otherwise, to create value. This is far more purposeful than a reactive approach to the environment where it seeks to find value from existing strengths.

For re-inventing the organisation or a division of it will always be preferred to an unquestioned adherence to a strategy that has past it relevance.

When exploring purpose it is helpful to have a Zero-Based Mindset. Here you return to the question: Knowing what we now know, if we were not already doing this, would we choose to? If the answer is ‘no’ then one must pursue a well-managed exit.

Similarly, the More/Less paradigm is another useful methodology when defining purpose. We ask: what should we do more of, including – what should we start doing; and what should we do less of, or perhaps stop doing.

Purposeful abandonment of some or all of an organisation’s activities, may seem extreme and not always necessary, but in order to free-up time, attention, energy and resources to do what should be done, it may be the only choice.

Read more about our Purpose, People & Performance model for management ▷ ▷ ▷
Purpose People Performance