Purpose: What NOT to do
There are many difficulties in formulating a new purpose for a company. Two of them seem to be recurrent.
1/ Formulations of purpose that inhibit the ability to innovate
At first glance, the link between purpose and innovation strategy is not obvious. For many, purpose is the extension of a CSR policy. It is a matter of associating environmental and social responsibilities with a vision. Thus, a car manufacturer concerned about its impacts could be misled by a promising purpose such as "to be the car manufacturer that neutralizes its CO2 emissions". Thus written, whether the ambition is great or insufficient, it would above all be a disaster. Indeed, with such a purpose, how can we maintain strategic agility, leave the automotive market if necessary and invest in a broader strategic field such as mobility?
Too many decision-makers neglect the fact that the formulation of a purpose is both a pivot between the past and the future of the company and the big bang of an innovation strategy. It is a question of "modeling the purpose as the set of properties of the future strategies to be designed".
2/ Formulations of purpose that deny the collective dimension of companies
A second trap consists in working on purpose in a small closed group. While the ultimate goal is to rethink the company's place in its ecosystem, many members of executive committees do not ask middle management, employees, shareholders or partners about the company's future vision and meaning. In this case, how can we really understand the responsibilities, tensions and issues that bind the company to its network?
From a good action, the top-to-bottom approach quickly becomes frustrating and tedious by inviting all the company's floors to execute rather than to propose, to think in closed innovation rather than in open innovation. How, with such a self-centered approach, can the company better respond to common and societal challenges?
At stratESGy we are not specialists in formulating purposes. But we make sure that the questions - How deep does the organization want to embed sustainability? How wide will then the ESG scope be(come)? - are answered in a coherent way. This is part of our Integration Module which elaborates on three components: Purpose, Business Model and Processes. www.stratesgy.com/integration