The Power of Purpose: How Your Company can end its Existential Crisis
The corporate purpose. And how a lot of companies don’t know theirs
“Why does your company exist?” If you pose this question to people in companies, be they executives, managers or even normal employees, the answers can vary considerably. Some, especially those working at all these famous small startups who want to save the world, know exactly why they do what they want to do.
From others however you are likely to hear a banal: “To make money of course!” These people usually work for larger companies that no longer ask themselves Why. (Because in many cases these bigger companies think they don’t need to anymore. Think Nokia, Kodak, or Blockbuster.) Companies that stopped asking usually compete to offer the “best quality” at the “cheapest price”.
But is that enough?
We think it is not. We think that every company needs a purpose.
Every company needs a purpose
Purpose, that’s one of those words that can make Germans envious of the English language, because it is hard to translate. Terms such as motive, concern, impetus, motivation, determination, ambition, dedication and commitment resonate with it, while the direct German translation is more of a functional term.
In order to find it, companies must not stop to ask themselves: “Why?”
Purpose: Asking “Why?”
Regardless of the size, industry or profitability of a company, on of the most important aspects of their long-term success is business ethics. A company that is committed to a goal that is equally desirable for employees, customers and stakeholders will very quickly be rewarded with trust from all sides. When people can trust, they experience an incredible reduction in complexity. The world becomes easier for them.
And within this simplicity lie two decisive advantages:
- Trust helps to reduce transaction costs.
- Trust is the strongest driver of successful brands.
It is therefore worthwhile to invest in the ethical foundations of a company and keep asking yourself: “Why do we actually exist as an organization?”
Usually, companies that do not have a clear moral basis shy away from this issue. The “Why?” asks for a sense of responsibility and confronts you with the question of whether you are even capable of giving “answers”. Without a clear answer to the Why question, there is little point in clarifying the remaining questions a business needs to answer.
As more and more people seek that individual independence through auto-mobility, the more we realize it comes with a couple of not so great dependencies.
Dieter Zetsche, Chairman of the Executive Board, Daimler AG
Existential crises, everywhere!
Times must be really difficult when even successful companies like Daimler start thinking publicly about their purpose. Especially large corporations are supposedly immune to these questions of meaningfulness. Their economic power, their importance as employers and the quality of their products are usually sufficient to simply ignore the question of “why”. Dieter Zetsche describes in his article WHY? on LinkedIn very precisely why the concept of freedom has long been well suited as a corporate purpose for Mercedes. And he also understands that society is increasingly being confronted with the price of this freedom. And he also understands that society today is increasingly confronted with the price of this freedom.
However, Dieter Zetsche’s contribution does not provide a clear answer to the problem. He writes that Daimler’s new destiny is to solve the paradox between the success of global private transport on the one hand and its unwanted side effects on the other. How this is to be done remains unclear.
Of course Daimler is a huge company and with everything they do an impact on society as a whole will be felt and discussed in the news or on the street. Therefore, Mr. Zetsche’s call for corporate responsibilty as definitely admirable. However, this is not a purpose that will give employees, customers and the other affected parties enough of a sense of direction. Also, is solving some of these environmental issues really the purpose of a car manufacturer like Daimler?
On the trail of a company’s purpose – using design methods
Without meaningfulness and a clearly formulated purpose, Daimler will find it difficult to find its way into the future. Without a clear focus on a clear goal, questions will arise time and again in all areas of the Group, and responsibilities will inevitably remain unclear. As a design agency, we know this phenomenon only too well. In our capacity as designers, asking why is a core party of our job. After all, work will become easier for us and the chances of success will be higher once the question of the meaning of a product has been clarified. After all, work will become easier for us and the chances of success will be higher once the question of the meaning of a product has been clarified. But more and more we see companies resign when this question is asked. Instead of really thinking about it, they instead start naming possible product features that may be nice or practical sometimes, but aren’t directly connected to the idea of a product’s purpose. Purpose, after all, is also always about trust and emotion, not only functionality.
The new user-centric approaches to design make it much easier to answer the “why” question. Changing from a company’s perspective to a user’s perspective can help answer the question of purpose. Anyone who not only asks superficially, but also goes into the depths of his mind and observes closely, will suddenly be overwhelmed by sensible operation options. They are lying on the street, so to speak – and not just for Daimler.
By involving the user in the determination of the company’s purpose, the matter becomes more than just an ethical-theoretical brain exercise. What problems are prevalent in the context of the user? What moves people? What are their deeper wishes that cannot be fulfilled by consumption? What about fears, where are the worries? Such questions provide a practical depth to the search for purpose. And those who are willing to listen to their customers and users at these levels will have no problems at all in promoting and clearly naming a sense of purpose in their actions.
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