Compelling Purpose & Plan

Six Critical Questions to Create a Compelling Purpose and Plan

1. Why do we exist?

   What promise are you making to customers? Which wants, needs, desires, pains or problems do your products/services solve? The answer to this question should rarely change since it reflects the core of your existence. Keep your answer real and relevant, because people can only commit to what they understand and your leaders must be able to own and live the answer. And, keep it simple. Anything more than a sentence might be too long to remember and too long for employees to really connect with.Consider how your function or organization makes life better for others. Your answer should stir the emotions. So, it should not be a project goal (too time-restricted), financial target (not emotionally compelling) or a specific strategy (too narrow). People don’t get emotionally charged about a “10 percent net profit,” a “20 percent return on investment” or a “30 percent increase in market share.” Your answer to this question should give your employees a reason to be excited about getting up and going to work every day, a reason to dread Fridays.

   Engage your team by asking them how their jobs relate to your team’s purpose. Some questions you might pose include:

   • How does our purpose make you feel? (If you hear responses like proud, important, connected, helpful or like a winner, then you’re on the right track.)
   • Does our purpose make you look at your job differently?
   • Do our roles, procedures, resources, skills and priorities support our ability to achieve our purpose?
   • What can you change or do differently to better support our purpose?
   • What can I change or do differently to better support our purpose?

   Healthy leaders don’t depend on chance, they lead on purpose.

   Here is how a few healthy organizations have answered the “why do we exist” question (but don’t be restricted by their structure or wording).

   • Google – To organize the world’s information and make it universally accessible and useful.
   • Bristol-Myers Squibb – To discover, develop and deliver innovative medicines that help patients prevail over serious diseases.
   • Coca-Cola – To refresh the world, to inspire moments of optimism and happiness, to create value and make a difference.
   • National Motor Club – We provide peace of mind and convenience for our traveling public.
   • Customer call center – To brighten the day of each caller by solving a problem.
   • Data security department – To ensure confidence by securing customers’ most private information.
   • Human resources department – To create a family that likes to win together.

   Your team’s purpose may not be apparent at first glance. For example, DW Distribution is a regional building products distributor in its third generation of family leadership. Their leaders experienced a common challenge when answering this question. Like many companies, it was easy for them to describe what they do instead of why they do it. Their initial response to this question was, “We just move these products from point A to Point B on time.” While, in fact, that is what they do, there was also a deeper “why.” Since many of their products were used for new home construction, their ultimate answer was, “We distribute building products that help the American dream come true.” Now, that’s a purpose worth working for! If you have a clear, brief description of what you do, consider adding to the end of that statement the words, “so that…” or “in order to….” You will find that it makes for a much more meaningful and emotionally compelling answer.

   A compelling purpose helps define your strategy and stay on course with sound decision-making. For example, in 2014 CVS Pharmacy, not called CVS Health, became the first U.S. drugstore chain to stop selling tobacco products. CVS realized that tobacco didn’t align with its purpose of “helping people on their path to better health.” So, they not only removed tobacco from its stores, they also launched programs to help smokers quit. The move resulted in 95 million fewer cigarette packs sold and a four percent increase in nicotine patch purchases.

   In the first year of this change, CVS lost $2 billion in annual cigarette sales. On the other hand, its pharmacy sales jumped up. Eliminating tobacco from its shelves was an important step toward credibly rebranding the company from CVS Pharmacy to CVS Health. These changes resulted in a 10 percent increase in revenue, mostly from growth in pharmacy benefits management, a new revenue source that might not have been considered without its new purpose as a strategic lens. Living its purpose also led CVS to a $69 billion merger with Aetna and significant stock gains.

2. Where are we going?

   The answer to this question should be a forward-looking statement that inspires your entire team, from customer-facing operations to back-office support. It should connect today’s tasks to tomorrow’s promise. Know that the answer may change over time to drive constant learning and innovation.

   Fossil is a worldwide watchmaker and also one of the fastest-growing lifestyle brands with its line of American vintage watches, accessories, clothing and shoes. Jennifer Pritchard, president of retail for Fossil, led its retail growth to 418 stores worldwide with a vision of being a distinctive lifestyle brand. Pritchard has been a client for several years and shared her perspective on this question: “If you don’t invest the time to know where you want to go, you will never be in a position to get there. It is in the development of your plan that you take the first real step towards making it a reality. Once you have your ‘where,’ you get to work on the ‘how.’ If you try to skip answering the ‘where are we going’ question, you won’t know what you need to do or whom to bring along on the journey.”

   Here are some other examples of answers to the question, “Where are we going?”:

   • Zappos – One day, 30% of all retail transactions in the US will be online. People will buy from the company with the best service and the best selection. Zappos.com will be that online store.
   • Nike – To be the number one athletic company in the world.
   • DuPont – To be the world’s most dynamic science company, creating sustainable solutions essential to a better, safer and healthier life for people everywhere.
   • Customer call center – To always be in the industry’s top 10% in response time and caller satisfaction.
   • Information technology department – To consistently deliver 99% uptime for all business-critical systems.
   • Purchasing department – To reduce our company’s carbon footprint by 50% in the next 5 years.
3. How will we conduct ourselves?

   Your answer to this question should reflect your values. It will influence how you design your people systems (e.g., selection, training, promotion, rewards) and work systems (e.g., meeting ground rules, response expectations, decision making, quality control, collaboration, innovation). Consider these value pillars as you formulate your answer: customer, team, individual and excellence. Think about the very few values you hold as core, as non-negotiable. Avoid the typical, long laundry list of values and instead target three to five core values at most. For example, one of Fortune’s most admired companies, Marriott, boils their values down to: put people first, pursue excellence, embrace change, act with integrity and serve the world. We will elaborate more on values in Chapter 18, “Value Your Values.”

4. What will we do?

   Strategies generally revolve around customers/markets, people/organizations, products/services, systems/technology and distribution/sales channels. The answer to this question should address how your team will compete in the marketplace or service other departments (if you lead an internal service function). Consider what you will specifically do (and not do), who you will serve (and not serve) and how you will differentiate yourself. Will you enter new markets, roll out new products, leverage a new technology, consolidate operations, use a new marketing approach, build upon your supply chain, become more operationally efficient?

   It is far better to limit yourself to a few strategies and stick with them than to formulate so many strategies that you can’t fully execute them. Try to identify no more than three strategies to execute.

5. How will we measure our success?

   These measures of success tell you in a quantifiable way if you are making progress executing your plan and, ultimately, if you have fully implemented it. The nature of your strategies will dictate what makes sense to measure: sales, profits per employee, expenses as a percent of sales, employee engagement level, return on equity, market share, customer satisfaction, year-over-year growth, etc. 

6. What improvements or changes must we make?

   Rarely does a solid strategy enable your team to proceed with business as usual – it should trigger some changes in order to take your performance to the next level. Your answer to this question should describe just a few key initiatives to support each strategy that you outlined in question #4. Let’s assume that one of your strategies is to add services to support your product offerings in order to deepen customer loyalty. Key initiatives might include: identify those services customers perceive as most value added to their product purchase, and test initial service offerings in X markets to measure customer and revenue impact.