It’s the name of a great book by Simon Sinek, but it’s bad advice for startups. Okay, it’s not bad per se, but most startup leaders approach it the wrong way. While it’s good to connect the work you do to your personal “why,” your why is not the purpose of a business.
The phrase often conjures up the image of someone coming up with a mission-driven business that exists to address a noble and important cause.
This image is dangerous because it obfuscates the true goal of every business: to provide value to one or more stakeholders. It doesn’t matter if that company exists for altruistic purposes or has a profit motive.
Not-for-profit businesses exist to serve typically one stakeholder: the people who they aim to serve (e.g. their benefactors). These people may be diverse — many non-profits serve multiple personas — but they all fit into the category of “people you serve.”
For-profit businesses exist to serve multiple stakeholders. These stakeholders typically include investors, executives, and founders. More importantly, these businesses exist to provide value to customers.
It might make me sound like Captain Obvious, but your customers are the reason why your business exists. They’re your purpose. Your purpose is inextricably linked to your customers.
Your purpose needs to be aligned with what your customers need and want.
Much like the process of bringing a new product to market, your company’s purpose needs to be in tune with your customer’s expectations. In some ways, your purpose is your company’s origin story: it describes why you exist and what you offer the world.
And, like a product, it doesn’t matter how great your purpose is in isolation. Until it is tested and proven in the real world, your purpose is just a hypothesis that is likely to change.
At this point, you might be thinking: “great, this all makes sense, but I cannot wait until I have ‘purpose-market fit’ to develop a strategy.”
And I’d agree with you.
Once you’ve found something that you think will resonates with a real group of potential customer you need to develop a strategy to support it. In the early days of a startup, everything is a hypothesis that needs to be tested.
Now, if you have read this far into this article, you probably fall into one of two categories:
It doesn’t matter whether you have product-market fit or not. Alignment is a process that requires you to continually reevaluate what you’re doing in order to create and maintain it.
Your strategy needs to align to your purpose.
Purpose gives you focus and a finite scope. Like with creativity, setting constraints actually enables you to be more successful. Having focus enables you to think about how best to serve a single and well-defined customer persona.
Your strategy comes second to your purpose. You need a strategy that creates the right context for making decisions that allow you to achieve your purpose. Strategy helps guide your actions and decisions in a coherent way.
One area of confusion for many first time founders is the role of “mission, vision and values.” These are elements of your purpose, but they’re also strategic in nature.
Kind of confusing, right?
Your mission, vision, values (MVV) stem from the strategy that you develop to achieve your purpose. They guide the behaviors and actions that you take every single day as a company. They explain “why” and “how,” not “what.” They’re not intended to be tactical or an action plan.
Put simply, your MVV is a blueprint for fulfilling your purpose.
Again, you cannot develop your MVV in a vacuum. It’s great to have certain beliefs that drive your business, but your beliefs have to reflect what your customers believe.
Let’s imagine you are leading Blockbuster in 2009, a year before the company went defunct.
Your mission is to “provide our customers with the most convenient access to media entertainment, including movie and game entertainment delivered through multiple distribution channels such as our stores, by-mail, vending and kiosks, online and at home.” You also state that you “believe Blockbuster offers customers a value-priced entertainment experience… providing] local neighborhood convenience.”
While you may believe this, your customers do not.
Your mission statement reflects a world that no longer exists. Your customers don’t want to have to go somewhere to get a movie. They don’t want to wait to watch the latest film.
In established companies, the innovator’s dilemma is a true killer of previously successful businesses. Blockbuster failed because they couldn’t remain aligned to a changing customer landscape.
Startups face the same challenges when they’re just starting out. They define a mission and vision without looking at the world around them. No matter how hard they try to will their need into existence, they fail to gain customers and serve their purpose.
One of the more interesting things I discovered when researching Blockbuster’s mission, vision and values was their emphasis on diversity. According to the company’s website, “at Blockbuster, diversity means valuing differences. It is a corporate value that must be continually developed, embraced and incorporated into the way we do business.”
Elsewhere I found Blockbuster’s value of diversity described as “an inclusive, strategic business platform focused on creating a differentiating and sustainable competitive advantage.”
This reads more like corporate speak than a true belief. It is also difficult to see how it actually supports their strategy. It’s not that diversity is not important, but rather business values are not synonymous with social values and morality.
Blockbuster is hardly alone in this tendency to select abstract corporate values that sound like they were written by a PR agency. Companies everywhere select values that do not guide behavior or help their employee’s make decisions that align with their customers.
Contrast Blockbuster’s value of diversity to Amazon’s principle of frugality. According to Amazon, frugality means to “accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.”
This leadership principle is easy to translate into action. It is strategic because it gives clear guidance on how to cut costs and be more profitable. You don’t need to be the CEO to understand its meaning.
This principle is also why Amazon famously uses “door desks,” which are wooden desks made out of solid core doors. Even as one of the world’s most valuable companies, the door desks remain a symbol of Amazon’s emphasis on “[spending] money on things that affect our customers, not on things that don’t.” It is a tangible reminder of what to prioritize and how to execute.
It doesn’t matter what your values are, as long as everybody agrees to act on them, according to research conducted by Jim Collins, author of Good to Great. He found that there was not a single value shared among all of the highest performing companies he researched.
Instead, aligning strategy and execution to a common set of values is the only thing that matters.
As Jim Collin’s start his blog post entitled “Aligning action and values”:
“Executives spend too much time drafting, wordsmithing, and redrafting vision statements, mission statements, values statements, purpose statements, aspiration statements, and so on. They spend nowhere near enough time trying to align their organizations with the values and visions already in place.” – Jim Collins
Later in the article, Collins points out the fact that values are a reflection of what is valued, and not what a leader deems important. You cannot write down a list of values and expect them to be followed.
Perhaps leaders should spend less time writing down value statements and more time aligning their people around the best values they already have?