Why your business strategy needs purpose – and why you need a solid strategy in the first place

I first got in touch with strategy as a discipline in business school and found the subject incredibly boring. It was taught with little corporate context and had no visible connection to my own life. To me, at that point in time, strategy was all about theoretical frameworks without connection to the outside world. However, early in my post-university career this perception changed rapidly – and I realized how conscious leadership and strategy are intertwined, and how both are essential ingredients to business success.

Past success is the enemy of your strategy 

I started my career in an industry that was, and still is, under pressure: high-volume printing. Mail-order catalogues, magazines, direct mail. I soon realized that strategy was indeed an exciting field; all it needed was a strong connection to reality to bring the subject to life, i.e. a specific industry, corporate context, people, and culture.

The company had a history of great financial success – and this success had become their own worst enemy. For years, leadership and personnel alike had been clinging to the glorious past where everyone had their share of the golden times. The issue was that these times were over and that the corporate culture was incredibly change-averse; staying the course and hoping for better times to return seemed to be the “strategy” for many. With new media opening exciting opportunities for e-commerce and publishers in the ’00 years, market demand for mail order catalogues and magazines had been shrinking rapidly. None of the leaders had experienced anything like this before in their careers. Until this point, change had occurred in small dosages, within the subject of expertise of those in charge; change used to be incremental. The printing industry, like many others, now needed to cope with rapid transformational change. But with one eye on the past and without a business strategy in place the entire leadership population seemed paralyzed.

Having reaped the fruits for decades without a real need for strategy, shareholders now demanded fast and bold moves to turn the company around and stop the financial bleeding. This opened up a massive playing field for a new CEO and his leadership team. Supported by a global management consultancy, the company developed a solid strategy – but in the end it was too little too late. The company had missed the right point in time to design a future-proof strategy. The inevitable happened: shareholders lost their patience; the company was restructured.

Your strategy needs purpose

The good news is that there are many great examples of companies out there that aren’t complacent. If you’ve reached this point in the article, chances are you are either interested in the subject of strategy or – more broadly, you care about the future. This might entail your family, your career, the people you lead, the customers you serve, the sports club, environmental campaign, or church you dedicate your spare time to. And strategy is exactly that. Caring about the future. If you care about the future of your family, you will figure out the best way to provide for them. If you care about the future of the environment, you will find ways to reduce your personal carbon footprint. And if you care about the future of the community you live in, you will invest your spare time to work towards a great place to live.

Unfortunately, care is not always a driver in the world of business, and I am not suggesting that every business strategy out there has a noble element or altruistic character. Just take a look around and you will quickly identify organizations with doubtful strategies in shady industries. And then you will also find the gems; companies with a purpose so powerful that it provides meaning and direction to leaders, employees, and shareholders alike. To avoid falling into the marketing trap of fancy purpose statements without anchoring, purpose needs strategy. And vice versa.

This is where strategy and purpose meet. One cannot sustainably exist without the other. Strategy is a plan of how you reach a desired future state. And purpose is the reason why you exist as an organization; it is your social legitimation and goes way beyond making money for you and your employees. To borrow from Steve Jobs, it is the ‘ding’ you leave which hopefully makes the world a better place. Without purpose, strategy can quickly derail and become mainly about profit maximization. Famous examples of derailed strategies of the past years include car manufacturers, banks, and organizations in the world of sports. And purpose without strategy? Well, at least it is good intention – and you might even life up to it to a certain degree, but that would be little more than sheer luck.

Conscious leaders create stronger strategies

Creating and implementing a purposeful strategy is taking charge and shaping the future; it is about conscious decisions, about direction. Without direction, we can quickly lose focus, and start being all over the place. Like jumping on a random train leaving main station and hoping for the best when you reach the final destination. Looking back, this was basically how shareholders and leadership of the company I was working for seemed to have led the organization for many years. And after too little too late, their final destination was shutting down facilities, sending thousands of people and their families into unemployment and angst. Having no strategy in place is irresponsible and unethical. It’s like gambling with borrowed money and the jobs of those working for you. In the end, the casino wins.

Now for a moment, imagine the leadership had put in place a strategy when the time was right, while the company was enjoying the good times. Now imagine that they had backed up that strategy with a meaningful purpose that connected emotionally with the workforce. It seems likely that instead of just maximizing profits the company could have established real value beyond money for their employees and the communities around them. Purpose is an essential element of culture and identity and can help you and your employees through tough times of change. If leaders truly embrace their responsibility, they create the space where their organizations design strategies beyond money, beyond managing the status quo. Future-proof strategies provide answers to the most burning questions of the industry you are in, the company you represent, and the people you lead. Only then will you unite your people and unleash creativity and ownership essential to tackling the challenges ahead. That is what ethical, purposeful, and conscious leaders do to secure the future for those they lead and serve. And this is true wherever you sit in your organization. Take the lead and start exploring!

Main Photo by Clark Tibbs on Unsplash