How clear is your strategy? Assessing the soundness of your business purpose

In today's rapidly changing market, having a clear business strategy is crucial. This is especially true in turbulent times, as many businesses have found out during recent disruptions and global challenges.

Reflect on your current strategy

Consider the following:

1. Burn rate control: Is your spending within the limits you planned?
2. Investment goals: Have you reached the investment milestones set for this phase of your business?
3. Growth achievement: Are you attracting customers and generating revenue as per your growth plans?
4. Product/Service success: Does your product or service meet market needs effectively? Are your new products succeeding?
5. Talent recruitment: Are you able to attract the talent needed to achieve your business goals?

If you hesitated on any of these points, it may indicate that components of your strategy are not aligned. This misalignment can cause inefficient operations, undermine growth initiatives, and make your business less attractive to investors – ultimately affecting its scalability and longevity.

Purpose: The hidden performance factor

You might be surprised to find out that your business purpose– it’s core objective - connects all these areas, and a well-defined purpose makes it easy to align the components of your strategy. A well-defined purpose also inspires a strong culture, acting as a consistent lens for all decisions. Not surprisingly, businesses with a well-defined purpose tend to significantly outperform their peers: they are more productive, more successful in innovation and transformation, able to navigate challenges more nimbly whilst maintaining focus – all which helps them grow up to three times faster¹.

On the other hand, a vague or unclear business purpose can lead to wasted resources as initiatives may not align with an explicit core objective. It can turn away investors looking for businesses with long-term potential, result in products that don't meet market needs, and make it hard to attract and keep top talent who seek clear, purpose-driven companies.

How to evaluate your business purpose

To evaluate your business purpose, ask yourself:

1. Fundamental human challenge: Does your purpose address a major human need or challenge?
2. Unique strengths: Does your purpose leverage the unique strengths of your business, crucial for competitive edge and resilience?
3. Commercial application: Does your purpose clearly explain how your business earns money?
4. Stakeholder consistency: Do all your key stakeholders understand and commit to your purpose?
5. Strategic integration: Is your purpose integrated into your business strategy and everyday decision-making?

If you answered 'no' to any of these, it might be time to revisit your business purpose and ensure it is fully embedded in your organisation.

Final takeaway – Sound strategy starts with a clear purpose

Understanding your business purpose is crucial for effective strategy and operation. If reflecting on your financial management, investment achievements, customer growth, product success, or talent strategies raises doubts, it's time to reevaluate your business purpose. A well-defined and integrated purpose aligns your strategic goals and operations with a valuable long-term opportunity, driving sustainable growth and resilience.

About the author

Purposecraft is dedicated to enabling companies to achieve sustained growth and resilience by developing and integrating a clear strategic purpose. Our team has unique experience in helping organisations of all sizes improve their performance and strategic clarity through our proven framework. We also offer a complimentary purpose audit to help businesses identify opportunities for alignment and growth.

Ready to craft your purpose? Reach out directly to the authors.