There's such a thing as too much purpose

The best companies know why they exist and where they're going, but it's madness to force it, says Giles Gibbons.

by Giles Gibbons
Last Updated: 27 Jan 2017

Think about any bank’s purpose.

Helping Britain Prosper say Lloyds.

Helping people achieve their ambitions – in the right way say Barclays. Spot the overlap? Any similarities?

We enable businesses to thrive and economies to prosper, helping people fulfil their hopes and dreams and recognise their ambitions. That is HSBC.

We provide local banking for Britain to help local people, businesses and communities to thrive together. That last comes from TSB – at least they’ve added in the ‘local’ emphasis….

And it’s not just banks. We can play the same game with the purposes of different car companies, or telecommunications companies, or retailers. Their purposes are often much the same. Given that they’re meant to set out what the company does and why, it shouldn’t be too much of a surprise.

Now think about a company that makes something that has an undeniable place in our lives, but probably isn’t going to change the world – say biscuits. Here, the question is not around whether biscuit company A should have a different purpose from biscuit company B – but rather whether they should have a purpose at all.

United Biscuits sets out a mission: ‘to provide simple, wholesome pleasures to all our consumers,’ which seems very sensible and about right. It’s not a purpose, because it’s hard to argue that it sets out how the company will make a meaningful contribution to the world, but nor should it be.

Next think about the latest hot topic at the Department for Business, Energy and Industrial Strategy, in relation to corporate governance reform – under the spotlight ever since Theresa May outlined a new emphasis on business responsibility in her inaugural address, a theme she recently returned to in Davos. Yup – it’s purpose. The idea, put forward by the Big Innovation Centre (amongst others), is that all companies should be mandated to have a purpose and report against it.

And then finally think about the new business landscape - the myriad of standalone ‘purpose’ agencies that have sprung up, the weighty purpose reports and indexes published by advertising and PR agencies, the new purpose institute set up by Ernst and Young, the list goes on.

Peak purpose?

We’re all for purposes. Whether you’re a new company or a well-established one, the process of agreeing and articulating your purpose ensures you have, as an organisation, thought through what you set out to do and why it matters and the value you can bring to the world. That’s a great thing. And particularly if you put them together with a set of principles about how you behave – and some pledges that set out what that means in reality, they can be a very powerful way of propelling an organisation forward. We have been helping organisations do this for years, and find the process really can have a transformative effect.

But – and there’s always a but! – the current frenzy around purposes seems to have lost all sense.

And the idea of mandating that every single company is the final straw.

Companies within a sector would end up with a host of identikit statements littering their corporate websites. Companies performing perfectly useful but relatively mundane functions would find themselves wordsmithing their way to rose tinted over-promise. And companies that arguably don’t do anything very useful would find themselves in the farcical position of having to show that they did – would British American Tobacco have to be part of the club?

But more importantly than any of that – the idea runs against the fundamental essence of what makes a purpose work.

If purposes are going to have any power at all they have to be something that everyone in an organisation actively believes in and is motivated by – a genuine expression of the company’s reason for being.

They have to come from within, not without.

Of course if you’re Goldie Blox and you exist to "disrupt the pink aisle" with toys that introduce girls to engineering, and you’re driven to do what you can to redress the fact that 86% of the world’s engineers are men you have a purpose. And of course then it does what it should -  it acts as a guiding force that directs decision making on an every-day and a long term basis, and enables you to map your progress against your goals.

But can you force this relentless sense of purpose onto a company? Can you make it do or be something different because it has a set of words that sit at the top and has to publish another report that no one will ever read? Can you apply purpose to everyone and everything?

We think not – and that it would be madness to try. And one might argue that the banks have been caught up in this madness already.

Giles Gibbons is founder of Good Business, which helps businesses and brands be more progressive. Follow him on Twitter: @GilesGibbons

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