The Elephant In The Room

Exploring declared purpose and de facto purpose.

Every company operates with some set of ambitions and shared intentions, and therefore every organization has a reason for being, an intended end – what could be called a purpose. If your company hasn’t thought clearly about that intended end, then it’s ignoring the elephant in the room.

If your company has explored and declared its purpose or intended end, does it align with the prevailing beliefs and actions of the company? In other words, is it real?

Purpose: Declared or De Facto?

As I write, I am reminded of a global company whose senior leaders are resigning by the day because they have interpreted a direction and action plan recently declared by the board and CEO as completely contrary to their implicit beliefs about the purpose of the company. Exit interviews reveal sentiments like, “this is not who we are…” and, “if that is the direction, then I want no part of it!” This brings to light the core of purpose:

Purpose, stated or unstated, is implied by the actions of every organization.

Purpose suggests, “the reason for being,” or, “the reason for which something is done.”

Oftentimes, as questions of business purpose have come more frequently in recent years, companies have been declaring their purpose more clearly.

But a declared purpose means little if it is not believed, implied by actions, and therefore de facto.

In some cases, the declared purpose really is intended, and is therefore enacted within the actions and decisions of the organization. In other cases the incongruence is obvious.

For instance, a food company I know well, wrestling with the consequences of stalled growth, is contemplating a reset of its global footprint to better reflect demand. This seems like a sensible thing to do, on the face of it – close some capacity in one area in order to open more where new customers are – a common issue for many North American businesses.

The trouble is, for this company, to make those restructuring moves breaks some long term and cherished social contracts, which raises a question that remains (verbally at least) unanswered: why is this company in existence? Does it exist merely to chase consumer demand wherever it is, or does it have some purpose related to the communities that have once served it well but who no longer offer sufficient business growth potential? Whom does it serve? What shall it do?

In another business that serves consumers both directly and indirectly (through other businesses), the declared purpose is sufficiently at odds with the quarterly financial focus of the ownership to call into question the real corporate ambition, and as such, the declared purpose may actually fuel more cynicism than inspiration. Whom does the organization serve? What shall it do?

Although a purpose statement may be inscribed on marble floors or letterhead or business cards, it will not make any real difference until it is written on hearts and carved in the desires and beliefs that together form the collective will of an organization. That’s when it will become real and spring to life as the de facto purpose of the organization.

If a company’s declared purpose is not made real and true by corresponding intent and actions, it’s not a purpose – it’s a lie.

And in the age of transparency and a million Davids that lie will become a millstone around your company’s neck in the blink of an eye.

Famously, when Johnson & Johnson leaders and employees acted to initiate a massive, nationwide recall in response to the deadly 1982 Tylenol crisis in Chicago, they acted because they believed their Credo was true: “put the needs and well-being of the people we serve first.” J&J demonstrated a congruency between declared purpose and the de facto, believed purpose. Their actions during that awful time had memorable and trust-building results that nurtured belief (for both employees and customers) and built expectations for the future.

As J&J proved, purpose often has longstanding heritage. It must be listened for and tended carefully.

If you ask others in your company, “what do you believe this company is for?” you may find the answers quite revealing. You may find that the de facto purpose of the organization is a troublesome white elephant—something unarticulated below the surface that has always sort of bothered you or causes trouble for your customers. Or, the de facto reason the organization exists might turn out to be quite compelling and deliver far more meaning than whatever intention or identifying phrase has been quoted robotically for years. No matter what is uncovered, this exercise of listening for purpose must be done regularly.

Purpose, Belief and Action

A CEO recently expressed to me his opinion that if he could just articulate two things—the purpose of his company and the opportunity that lies ahead for the business—and show that they were both endorsed by customers, then his employees would believe it. If that happened, the marketing challenge of re-positioning the business would resolve naturally.

His instincts are right. In their important model suggesting a framework for organizational development, Warner Burke and George Litwin describe the transformational and transactional variables that an organizational system includes. They posit three transformational variables, one of which is “Strategy—that set of choices that define the focus of any organization.” Note that strategy is composed not of what is said, but of what is believed. Until a strategy is accepted and believed to be true by the employees, it is not the strategy. The same is true of purpose.

An organization’s de facto purpose exists as a composite of the beliefs that those inside and outside hold about the purpose of the organization and the way they act upon those beliefs. In other words, a company cannot simply get a purpose. Rather, purpose is what that company finds has got hold of it.

Every organization, then, is continually engaged in the choosing and tending of a purpose. This happens through the interactions of its various members that together foster a common belief in the nature of that purpose and suggest the actions to match, creating observable evidence for others. It is important to note here that not all purposes would also qualify as telos (a meaningful purpose to serve others), but more on that later.

Look for that elephant named Purpose—she’s in your company somewhere, and she must be found and tended carefully.