As a Gazelles business growth coach, I have been helping my clients revisit their company’s core purpose at the start of every planning session. From local businesses to international ones, the question of Core Purpose has always been hazy.
What really is the use of articulating, remembering and living out the Core Purpose? Why is it important, and how should Core Purpose be positioned? At the start of each session, there will be cynicism, as key personnel wonder would Core Purpose be relegated to a poster on the wall, unremembered, unarticulated and totally irrelevant to business the way how Mission and Vision had been for them in the past?
So what exactly is Core Purpose and why is it important?
The founder of Gazelles, Verne Harnish, a.k.a the Growth Guy whose business tools and consulting have helped more than 40 000 companies around the world including some national brands like Benetton International (India), shared an article from Bloomberg on how Ford Motors was turned around from near bankruptcy to its former glory. Always looking for stories to inspire business owners to grow, Verne shared this article on his website www.scalingup.com. The article is called The Happiest Man in Detroit.
3 Things I Learnt from this Article
Purpose gives strength through hard times
Alan Mullaly, the CEO who turned Ford from the brink of bankruptcy to the most profitable auto-maker in US said he derived strength from the Core Purpose of Ford Motors, as envisioned by the founder Henry Ford. Every day, when he walks into the company building, he reads the Ford advertisement published in 1925:
“Opening the Highways to All Mankind”
In his own words, Mullaly said,
“I walk in here every morning [at 5:15 a.m.], and the light comes on, and I stop and read it—to serve all mankind. It makes me cry.”
(Source: Bloomberg Business, Feb 03, 2011, The Happiest Man in Detroit by Keith Naughton)
He believes that his job in Ford is to bring safe and efficient transport to EVERYONE.
Mullaly talks about it frequently. He memorizes it. He begins auto shows with the declaration of the core purpose of Ford. And this belief in the noble purpose of Ford gave him strength to turn Ford around despite the hard times. When we only look at financials and forget why we do what we do, it is easy to forget. Worst, if finances are the only reason we do what we do, we will never have the fortitude to survive a crisis. If we hire people who do not believe in our Core Purpose, they will leave when the company goes through a crisis. Only people who share your Core Purpose will stay and turn the ship around.
Purpose Gives Focus
Mullaly had to make some critical decisions – what should Ford focus on to turn the ship around? They had limited resources; at one time even surviving on a loan while burning $2 Billion a month. Again, the CEO went back to Ford’s purpose – what does it mean to bring safe and efficient transport to EVERYONE?
He returned to Ford’s roots to provide affordable and top-quality cars for the common man. Thus, he sold off the European luxury lines like Jaguar, Land Rover, Aston Martin and Volvo, and focused on beating Toyota and Volkswagen, two similar brands that targets the man-on-the-street by becoming more fuel-efficient, safer and more beautiful than these two competitors. When the Lehman Brothers crisis was over, Ford showrooms had cars that were nicer, better and more efficient than what car buyers remembered Ford had. By focusing on their Core Purpose, they went back to what they did best.
Purpose gives Clarity
The last thing I learnt from this article if the importance of clarity. In line with Ford’s purpose to bring transportation to EVERYONE, Mullaly asked himself where is the world’s largest population, and what do they need?
The answer – Asia and small cars.
Asians neither need nor idolize gas guzzlers. And Asia’s big population would generate enough demand to lift Ford’s profits. This belief drove him to get his designers to design cars that are good for all markets rather than just regional ones. This led to billions in savings as Ford plants got great economies of scale. He hired the right people to lead the Asia team, invested in plants in China, and set a target that 70% of Ford’s growth must come from Asia. Core Purpose helped him to see clearly where to put his resources to achieve the company’s financial as well as highest goals. Although late to the China market, he believes Ford can make an impact by having cars that are beautiful, high-quality and at the same time affordable – cars that have universal appeal to the man-on-the-street.
Last week, as we celebrated Chinese New Year in Singapore, our company, the Adam Khoo Group held our annual AGM. During our AGM, we reiterated our Core Purpose, which is to Inspire a Better World through Training.
What does it really mean?
For us this year, it means adopting a CSR project that will allow us to use our expertise as a training and education company to create a better world. We decided to work with a school in a slum in Batam, where students can’t even afford to pay $4 a month for school fees.
Why did the management team do this? For publicity, as most cynical people would label CSR? It is because Core Purpose, if not DELIBERATELY lived out, made alive and acted upon, will die crucified upon some poster hung on a wall, unremembered. When purpose is alive and well, it will be like a lighthouse pointing us in the right direction. At times of haze and fog, it will direct us safely through the storm. It reminds us who we are, and where we can be at our best.
Is your company clear about its core purpose? This is how to find out:
Does the Core Purpose give you clarity, focus and strength? Ask yourself, if your company stops its operations tomorrow, will your customers feel a sense of loss? Or will they shrug and go next door to your competitor and life goes on?
Does your company have a clearly defined and articulated Core Purpose?
Are you keeping your Core Purpose alive?
If you need help on how to craft a meaningful Core Purpose statement that will drive your company forward and inspire everyone through difficult times, grab the book Scaling Up or just join us at the upcoming Scaling Up MasterClass with Verne Harnish “The Growth Guru” Live! in Singapore on 27th April.