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April - 2010 - issue > Entrepreneur 101
Building A Purposeful Organization
Gunjan Sinha
Tuesday, March 30, 2010
A lot has been written and discussed about having a clear vision and mission for successful startups. Startups that transition to become truly great organizations, beyond having a great vision and mission, often have a well articulated ‘purpose’. In this article I want to share my thoughts on how to think about the deeper issue of organizational purpose. Organizational purpose is something which provides a deeper meaning to the very essence of the organization. It provides a fundamental reason for the organizations to exist – it offers idealistic motivations beyond just making money. John Doerr, the legendary venture investor from Kleiner Perkins, often says that he is looking to back entrepreneurs who are missionaries not mercenaries. Making money is important, but it is not the end all and be all.

Entrepreneurs and business leaders spend considerable time and effort to identify a rallying purpose for the very existence of their organizations. ‘Purpose’ is a definitive statement about the difference that you as an entrepreneur are trying to make to the world. This is not just a sales or marketing idea to help add meaning to your brand, but is the genuine reason why employees, customers, and stakeholders must get passionately involved in the formation and growth of the organization – delivering greater impact to solve a deeper problem in the world.

Purpose Generates Passion

Successful sales people sell on passion and a deeper instinct that they are making a difference in the world. They demonstrate what they stand for, and influence the world in a manner that helps them achieve their goals. Successful entrepreneurs also know the power of passion – the passion behind their ideas, their innovations. They attach a deeper purpose to their existence. For example, BMW touts themselves as an ‘ideas’ company. They are not just making cars, but are helping spread the ‘joy’ of driving. It adds a level of excitement and infectious energy that transmits throughout their value chain. At SiliconIndia, while the vision is to create a professional media company, the deeper purpose is to build a ‘smarter’ India, helping India grow through the power of innovations and ideas. MetricStream, a leading provider of corporate governance and risk management software, is also passionately involved in bridging the governments and the businesses; helping businesses to better align with the governments around the world. I am closely involved with both MetricStream and SiliconIndia startups – and can see the difference and the deeper sense of commitment from all stakeholders that a higher level of purpose creates. Of course, these businesses are trying to grow and improve their profits, but they are also as passionate about making an impact in the world. It is important that entrepreneurs and business leaders think about the organizational purpose early on in the life of the organization and work to develop the common purpose that binds people across their value chain together. At Starbucks, the purpose is to create a meeting place for people around the world, helping them to interact with each other in a nice setting. Of course, they also sell a nice cup of coffee with that. Similarly Walmart has been passionate about really making things affordable for common people. At Charles Schwab there is a passion about giving the power back to the individual investors so that they can manage their money.

Purpose fosters visionary ideas and meaningful innovations. Organizations and employees are able to rally behind the purpose and are able to come up with ideas that help them achieve their purpose.

Purpose Provides Stability in Times of Turbulence

When things are down, markets are rough, going is difficult, and self-doubt is prevalent, the organizational purpose plays a critical role in providing a sense of stability and guiding force. This deeper conviction and motivation offers a sense of faith that eventually things will turn around for the good. You stick to what you stand for, and the organization is able to weather the toughest of the storms. On the contrary, organizations which do not have a deeper purpose might find themselves in a much tougher spot during such difficult times. They may not develop the resilience to survive these storms. The organizational purpose provides courage in tough times and spur all stakeholders keep their continued commitments and focus; eventually leading them to become a great surviving organization. I know of a number of startups who were on the verge of extinction during the tough times and whose deeper commitment and purpose kept them afloat. Back in the 1980’s Intuit was down and under, and were ready to fold, but they stuck together on the passion of building a great ‘user friendly’ product. The rest is history, as today Intuit is known worldwide for its awesome user experience, and for how it builds great software products.

Purpose Provides Energy

Startups thrive on energy. You are trying to create something out of nothing. With a small amount of venture capital or in many cases with bootstrap funds, you are probably trying to take down a well entrenched large company who is not serving the market needs to the best. Organizational energy is needed to move mountains and achieve the unthinkable. A great organizational purpose helps you hire the right people, who are passionate about your purpose, which in turn gives them the extra dose of excitement and passion that makes the difference between a good company and a ‘great’ one.

Entrepreneurs and business leaders must take a hard look at the world around them; they must listen to their inner calling, search their heart, and look for a deeper meaning towards which they can be passionate. You look for something so important that you think is vitally needed in the world, and something so noteworthy that the world needs you to rally people around that. It is not just enough to have a good business idea to build a great company; you also must feel a deeper sense of purpose and the desire to impact the world. Entrepreneurs who nicely marry great ideas and vision with a deeper purpose are eventually able to thrive in their entrepreneurial journey through the ups and downs and are able to build legacies for the future.
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