Many of the World’s Top Companies Can’t Explain Their Purpose. Why Knowing Yours Will Be a Competitive Advantage
In the Valley, there’s not much love for BigCos — those slow-moving dinosaurs stuck in the Innovator’s Dilemma tarpit. Valley culture celebrates purpose-driven entrepreneurship and world-changing ideas. As I wrote a few weeks ago:
More than half of millennials believe they will start their own business, and the majority of them believe that businesses must be driven by more than profit — seventy-seven percent of Millennials chose their place of work based on their employers’ purpose. Given a choice, this generation does not want to work at the corporations created by their forebears. This, of course, is an existential threat to the world’s great corporations.
The next generation of employees does not want to work at a company that lacks purpose. Which got me wondering: What exactly is the stated purpose of the world’s biggest companies? And might that purpose inspire a young person blessed with a choice of where to work? Alas, in most cases, the answer is a resounding no.
I spent the better part of two days looking for the purpose of Fortune 500 companies, and came away frustrated — most companies make a hash of describing the “why” of their businesses. Some of them have decent mission statements — but mission and purpose are often not the same.
It’s remarkable to think that in an age defined by purpose, most large companies have no idea what their reason for existing actually is. The next 10-to-20 years will bring extraordinary challenges for big companies — nearly all of the Fortune 500 is threatened by massive secular change. If ever there was a time to identify your business’s core purpose, it’s now.
Here’s what I could divine as the purpose (or in some cases, the mission) of five of the world’s largest companies. I’ve added my own thoughts on the challenges each company faces, and whether the company’s self-described purpose will help it navigate them.
Walmart. Saving people money so they can live better. For the largest company in the world, this is a pretty clear and inspiring mission statement. It echoes the company’s official purpose, which quotes founder Sam Walton: If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life. But as we all well know, Walmart has become the largest target in the world — constantly called out as a purveyor of extractive mass consumerism, a destroyer of local communities and mom-and-pop businesses, or a low-wage employer of last resort. However, as I learned firsthand when my NewCo co-founder worked there for nearly four years, Walmart also has an extraordinary corporate culture, one that allowed it to make one of the most far-reaching commitments to sustainability of any corporation in the world. If a young person can get over the rather high hurdles of Walmart’s downsides, the company’s stated purpose provides a clear true north for the company’s future.
Company challenge: Retail is migrating online, and Walmart’s core investment in superstores is looking like a bad long-term bet. Does this purpose help or hurt? It helps. Nothing in Walmart’s purpose states it must cling to old models of retail distribution. It’s purpose is to help people save, period.
Exxon Mobil — Exxon Mobil Corporation is committed to being the world’s premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards. Sorry, this mission (I couldn’t find a purpose) pretty much blows. If I’m a whiz kid fresh out of Wharton or Kellogg, what change in the world am I making by committing my energies to this company? Sure, it’s nice you value being ethical, but one hopes that’d be table stakes by now.
Company challenge: While the debate rages, the truth is our global society cannot continue to run on carbon-based fuels. What is Exxon’s plan once the world gets off the oil train? Does this purpose help or hurt? It hurts. With a mission that explicitly ladders to petrochemicals and profit over purpose, Exxon Mobil is poorly positioned as the world shifts toward new approaches to consuming energy.
Chevron — To be the global energy company most admired for its people, partnership and performance. Chevron doesn’t have a purpose, per se, this is from its “Chevron Way” vision statement. It’s great to want to be the “most admired” company in your field, but where’s the inspiration in that? Global energy companies dominate the top ranks of the Fortune 50, and all of them are terrible at defining what kind of positive change they want to make in the world. That’s a huge problem for a global economy driven by fossil fuels.
Company challenge: See Exxon above. Does this purpose help or hurt? It could help. This mission reads better — at least it’s not explicitly tied to petroleum. There’s room to pivot.
Berkshire Hathaway — Warren Buffet’s massive holding company has no stated mission, but his investment philosophies are legendary. Working at Berkshire is most likely a positive entry in any young businessperson’s resume. However, the company itself employs very few people — its massive market cap is due to the companies it purchases and holds. It manages those companies in a unique, hands-off fashion, allowing them to focus on the long term.
Company challenge: What happens when the legendary founder is gone? Does this purpose help or hurt? Not having a stated purpose could hurt. The world would be better off if Berkshire had a strong purpose statement, one that codified Buffet’s practices and encouraged others to learn from them. It’s a shame we don’t.
Apple —Again, here’s a major company that has no real stated purpose or mission, which seems quite at odds with the company’s brand. For much of the past ten or so years, the company identified this mouthful as its mission: Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad. Egad, that’s worse than having no mission at all — and the statement has disappeared from Apple’s website after press reports called it out. Of course, Apple may believe it doesn’t need to have a real mission statement, because, well, it’s Apple. But the company would be well-served to get back to something more akin to its original mission under founder Steve Jobs: To make a contribution to the world by making tools for the mind that advance humankind. Now that’s something people can get behind.
Company challenge: Finding new markets big enough to drive growth at the scale Apple’s size now demands. Does this purpose help or hurt? It hurts. With no clear stated purpose, the company lacks direction and innovation may suffer.
Given how terrible our largest companies are at declaring their purpose, I thought I’d leave you with a few examples of big companies with clear and inspirational purposes. Consider it a purpose statement unicorn chaser, if you will.
Coca-Cola: To refresh the world…To inspire moments of optimism and happiness…To create value and make a difference. I know, I know, Coke?!! But this vague but purposeful mission statement gives the company permission to rethink its core business — which was built on selling as much sugar/corn syrup as possible. Compare Coca Cola’s mission to Chevron or Exxon, and I’d wager you’d agree, Coke seems aware that change is in the wind.
Google: To organize the world’s information and make it universally accessible and useful. Like many companies, Google doesn’t have a stated purpose, but this ambitious mission has guided the company’s success for nearly two decades. Larry Page has recently wondered if Google’ mission needs an update given the scope of the company’s pursuits. If one is in the works, it’d be a good time for Google to consider its purpose as well.
Uber: Transportation as reliable as running water, everywhere, for everyone. Yes, this is again a mission, not a purpose, but some mission statements incorporate purpose. Regardless of your misgivings about the company, this is a galvanizing statement that will draw people to the company for years to come.
Business has already been rocked by decades of technological disruption, but that was only a prelude to the generational and cultural shifts now underway. To thrive, a company needs more than good products and a profitable business model. It needs a purpose that draws people in and gives them a reason to believe. So ask yourself — what’s your company’s purpose? And…are you happy with the answer?
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