ESG Metric: Purpose statement
Ease of implementation: Low
Suitable for: All businesses
Suggested functional lead: leadership team
Summary
A purpose statement helps employees and customers understand the organisations' goals and helps create a clear company mission. To create a purpose statement, you must define what you do, identify your passions and identify your values. Once those three areas are clear, you can create draft purpose statement and get feedback from employees throughout the organisation. It is important that the statement fills a niche to stand out and truly show your company culture. It must remain clear and show what goal you intend to meet.
Background Information
A purpose statement defines the mission and purpose of the organisation through the lens of how your product and services positively impact peoples’ lives. It is aimed at employees to work towards a common goal and to create a clear company mission for the customers. It outlines a company’s value and core values to customers and employees. The actionable goals to reach the purpose statement is known as the mission statement. A purpose statement is crucial for your business success as, according to Accenture, 63% of global customers prefer purchasing services and products from organisations with a clear purpose.
Implementation Steps
Define what you do
Specifically, lay out what your organisation does to solve a specific issue for your customers.
Identify passions
Identify what inspires the work that you do. Think about the broader picture of how you are helping your customer or the sector you are working in.
Identify values
Use your identified passion to determine the values of your organisation. These can include values such as sustainability, integrity, equality, transparency, equality etc.
Create draft
Ensure the draft purpose is easy to understand and no longer than 2 sentences. It is important to keep the purpose statement specific but aspirational to your employees and customers.
Get feedback
Peer-assess the purpose statement draft throughout the organisation so that various employees in various department at various levels have an input. This ensures that the purpose statement is transferrable throughout the organisation. Consider the feedback given to finalize the statement. It is a constant work of progress and subject to change as the business grows and evolves. Consider requesting feedback annually to ensure it still portrays your company's purpose accurately.
Importance of a purpose statement
Clear communications
A purpose statement can clarify the audience, their needs and how to effectively communicate internally and externally.
Fills a niche
It allows for your organisation to fill a gap or niche in the market as well as stand out from competitors that offer similar services. It aids in directing employee's motivation and energy towards a shared goal or mission, and attracts customers with similar values.
Clarity to meet goals
It creates clarity for employees what they are working towards and for whom. It will help focus work throughout the organisation towards a shared mission. It also outlines a clear commitment to customers.
Informs company culture
According to a 2019 Harvard Business Review Study, 34% of employees felt they were contributing to the success of the company and only 28% of employees felt connected to their organisations purpose. It outlined that a lack of company purpose creates a negative company culture leading to low motivation and alignment throughout. It is, thus, crucial a purpose statement is crucial to emulate collaborating and purpose, ensuring a positive company culture.