A company purpose is the “why” behind a company’s existence. It is the unique reason the company has been founded or continues to operate.
It’s often written down and may be shared with the public online or in company reports. It gives insight into a company’s culture and helps all employees unite for a common goal.
Is a Company’s Purpose the Same as a Company’s Mission?
A company’s purpose is different from its mission. A mission is what the company “does” whereas its purpose is “why” it does it. For example, a company may create marketing campaigns for businesses, but its real purpose may be to help companies communicate effectively or to match companies with their ideal customers.
Why Create a Company Purpose?
There is a well-known story that illustrates the power of purpose: In 1961, President John F. Kennedy was visiting the NASA space center when he spotted a janitor. Curious, the President asked the man what he was doing. Allegedly, the worker replied, “Well, Mr. President, I’m helping to put a man on the moon.”
This anecdote shows how company purpose is about something larger than job roles or what a business is doing each day. A firm purpose helps motivate employees, build a strong company culture, and unites everyone in striving for the best results.
Research backs up the idea that a strong purpose can be beneficial for business as companies that have them outperform their market by a ratio of 9:1 and financial markets by 42%.
What Are Some Examples of Company Purposes?
Not all companies have a “why” or decide to share it, but here are some notable examples.
- Advanced Micro Devices (AMD): “Technology enabling a better world.”
- American Family Insurance: “We’re not like just any insurance company. At American Family, we’re dedicated to inspiring, protecting and restoring your dreams — because we believe a dream is the most valuable thing you’ll ever own. That’s why we make it our mission to give you the support and inspiration you need to realize your dreams.”
- Archer Daniels Midland (ADM): “ADM’s purpose is to unlock the power of nature, to enrich the quality of life.”
- Coca-Cola: “Refresh the world. Make a difference.”
- United Airlines: “Connecting people. Uniting the world.”
Establishing Your Company’s Purpose?
While purpose statements are usually short, they can take a deceptively long time to get right. Included below are some helpful points to consider when trying to establish your company’s purpose.
- Why was the company founded?
- Could you interview them to discuss their dreams and hopes for the company? What mattered to them?
- What is most unique about your business?
- What do you spend most of the day doing?
- What excites your team most about their jobs?
- Who is your ideal customer and what value do you offer to them?
- What do most people not realize your company does for the community and the world at large?
- What problem does your business solve?
- If you had to describe your business’s reason for existing without mentioning your products or services at all, what would you say?
- How does your company uniquely make your community or the world a better place?
A useful way to frame this is to imagine peeling back the layers of what your company stands for. For example, if your business is a chain of restaurants and you’re serving food, ask why. Are you maybe creating a community space, creating a revolution in the way people eat, or offering healthy options in a space where there previously hasn’t been any? Keep asking “why” and digging deeper until you reach a unique reason that feels right for you.
Committing to Your Company Purpose
Establishing your organization’s purpose is just the first step. It’s also important to ensure that your employees, customers, and stakeholders are aware of it.
- Consider trademarking it. If your company purpose is a short phrase, trademarking it can protect your wording. It can also make it an intellectual property that is part of your business assets.
- Train your employees. Offer training to employees and explain why you have a company purpose, what your purpose means, and how they can help your company live up to its “why.” Your team should understand the role they play in why your company exists.
- Make it part of your operations. The most important way to use your company purpose is to make sure it shows up in your everyday workplace. Are your processes and operations reflecting your purpose? Are there changes you can make in how you do things to better reflect your purpose? Are there products or services you might want to launch to better embrace the true purpose of your company?
- Set up regular reviews. The purpose of a company can develop and change just as the business does. Reviewing and refining it along the way can keep the company purpose relevant—and your organization aligned with it.
A company purpose is the reason why a company does what it does. It helps to communicate to employees, stakeholders, and customers alike what the purpose is behind the company’s operations. Defining your company’s purpose can give your workforce an exciting common goal to strive for, as well as help you to align your business activities with that goal.
Share and Store All of Your Files in One Centralized Place
Find out how you can take your knowledge sharing to the next level with Connecteam.