The importance of understanding core purpose in business

Core purpose

When a company is initially formed, in its early stages there is almost always a strong focus on developing a vision, a formal mission statement and company values. But this level of understanding of where the companies long term position in the marketplace will only take it so far. A business needs to understand its purpose, why is actually exists and all too often this is very elusive.

A company’s Core Purpose, not to be confused with Company Vision or Company Values (which could be considered the “where” and “how”), a company’s core purpose is more about the “why”.  In fact, it could be considered the philosophical component that is often missing in business. Let’s be honest, most of us have asked ourselves at some point, usually on a Monday morning, why am I doing this? or what difference am I making in life?  Not having the answers to these questions can leave us feeling empty and un-motivated, for most of us, having no clear purpose in life can be downright depressing.  So, why would this be any different in our working lives?  After all, we all spend far too much of our lives at work.

A common mistake with core purpose that businesses make is confusing it with what they make or provide to generate revenue streams. For example, “Our core purpose is to make the best widgets in the world”. This doesn’t cover “why”. One could ask why do we even make widgets in the first place?  The problem with this scenario is that there is no ideology involved, and therefore little emotion or passion.  The workforce will continue to turn up each day and make this, or provide that, go home, return the next day and do it all over again.  Even typing these words sends a shiver down my spine.

Providing Continuity

In this world of change, it’s sometimes difficult to establish just how much change we should make.  After all, we keep hearing “change is good”.  This is true, but only to a point.  For example, I know of a business that made a total change in its direction of what it produced, based upon a perceived market opportunity with higher profit margins.  The move was almost disastrous, and a U turn with a lot of painful learnings was made just in time.  The fact is that they attempted to move too far away from what they were about, and what they’d always been the best in the world at. With frequent changes of board members and CEOs in today’s business world, it’s increasingly important to nail down just what the core purpose of the business is.

A better example is a medium size enterprise I know that makes mid to high range food products.  Their core purpose is very clear, “to provide life with a little enjoyment”.  To fully understand the impact and importance of this purpose, you would need to see and feel it from the shop floor to the board room – it is tangible.  They don’t make mass produced cheap products.  They don’t use cheap imported ingredients, and they certainly don’t make health foods.  Not that there’s anything wrong with health foods and cheap mass-produced foods, it’s just not “their thing”.  They make products that can be enjoyed as a treat, something that satisfies a basic need in most people.  It has helped them to keep focused upon why they exist, and what they do best and thus achieve good profitability, sustainability and growth.

Relating this to my life was interesting for me.  My eldest son has recently completed a degree in music, and when I asked what the hardest part was, he answered “being constantly asked what job it’s going to get me as if money is everything in life”.  He went on to explain that his purpose in life wasn’t to be a well-paid accountant, or a captain of industry, rather it was to entertain people.  That’s what he’s passionate about, that is what he’s good at, and this is what will make him successful.

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