How companies lose their Purpose (and how to find it again)
It is sad, but true! Many companies have lost their Purpose these days. How and why do companies lose their purpose, and how can you reclaim and reactivate your Purpose?
How companies lose their purpose
Every company starts out as an entity with a singular purpose; a product, a service, an idea that creates value for customers. When this product or service is sold successfully, the business grows. It attracts people who believe in the company and want to contribute to its success. Nonetheless, as the business continues to grow, and more employees undertake diversified activities away from the core business, their contributions tend to become ever more distant from the original company purpose.
Drifting away from original purpose is natural
The drift away from the original purpose is quite natural for businesses. Different people have different ideas of what is best for the company, and what new activities fit best with its original purpose. However, without careful management, this growth can stagnate, leading to a myriad of ventures and activities that are only tangentially related to its core business.
Although often well intended, with these diversifications it becomes progressively harder to explain to customers why your company is engaged in those activities.
Microsoft’s Zune can be seen as a sad example
Unfortunately, there are plenty of examples of companies losing their purpose. Microsoft’s Zune player comes to mind, which launched to compete with the iPod. Even though the product was not bad, Microsoft could not explain to consumers why a software company was making music players. So nobody bought one.
How to prevent losing your purpose
So how do you prevent this from happening? Boston Consulting Group’s CEO Rich Lesser recently wrote: “Define your purpose. Why does this organization exist? What need in the world is it uniquely able to fulfill? Communicate this internally and externally, make it come to life in what you do, and ensure it is a meaningful part of the experience of your employees and your customers.”
Defining your purpose means looking beyond creating shareholder value, and getting back to the core reason for a company’s existence. What was it we wanted to change in people’s lives? What did we want to add to the world? If you answer that question, you can attract and retain the right people with the right motivation, skills and experience to achieve that goal.
This is not easy, and can often require reshaping the company and the way employees view the company and themselves. However, the rewards are great, and it will give you the institutional resilience to confront the enormous challenges and opportunities confronting businesses as we head into the middle of the 21st century.