Who Are You?3
Any organisation must have two pieces of information to guide their path: a purpose, and a set of values. These attributes are often discarded as optional, but they are critical in the long term prosperity of your business.
What is a Purpose?
A business' purpose is the one-sentence expression of its impact on the lives of its customers/clients. A purpose should:
- Be brief and to the point (i.e. one sentence).
- Be easily understood by all stakeholders, internal and external.
- Capture the essence of what the business does, and how it impacts the end user.
A few examples of purpose statements are shown in the exhibit.
Identifying your business' purpose statement is an exercise in identifying exactly the impact you want to have in the world, and distilling that into one sentence.
What are Values?
Businesses that enjoy enduring success have core values that remain fixed, while their business practices endlessly adapt to a changing world. Core values are those fundamental, higher-order ideals that bond the business:
- A small set of timeless, guiding principles.
- Only a few values can be truly “core”.
- Values are central and passionately held by individuals and the business.
Values must stand the test of time, they do not change with the market. In fact, businesses change markets to remain true to their core values. These are critical to leading a successful and genuine business.
The larger the business the more important the value set, as members of the business must make decisions consistently. The values of the business influence decision making of the individual.
Selecting Your Values
The process of selecting values can be an extremely introspective exercise, requiring significant reflection. If you are a small team, your business' values may reflect your personal values.
One way of selecting values is by starting with a long list, and identifying the 3 to 6 values which you resonate with most. You can download a "Values Inventory" below. If there's a value you hold which doesn't appear in the inventory, add it.
Once you've identified your 3 to 6 values, try and elaborate on how they look in practice using one sentence. An example value set is shown in the exhibit.
There Are Other Things to Consider
There is much more to building a business than a purpose and values. On your journey you'll have to develop a culture, which is the amalgamation of all of the above, plus a set of defined norms by which all members of the business abide. Another tool you may come across is a vision statement; the end state of the business which defines success.
It's important to note that there is significant debate in industry over the definitions of purpose, mission, values, vision etc. In the end, you must make an informed choice as to in which format your business principles are communicated.
Now your business has set a direction through its vision and values. We'll cover how to operate the business in the next chapter.