Strategy · Organising to Scaling
Why you exist
You write down in one sentence why your company exists, found by asking why five times, and you use that sentence for your next big decision.
Does this sound familiar?
- A candidate asks why they should work for you, and your answer is about salary and a nice team.
- Your website has a mission that would fit any of your competitors just as well.
- A big job comes along that doesn't suit you, and you can't quite say why you're hesitating.
- You ask three colleagues what the company is for and get three different answers.
Who it's for, and when
For founders filling in the Purpose box on their canvas, or who have a sentence there that nobody reads any more. In Searching and Proving, the why is often still the problem of your first customers, and that can shift. You pin it down from Organising onwards, when people join who don't see you at work every day and have to make their own choices.
The model
“People don't buy what you do; they buy why you do it.”
Collins and Porras saw that companies that stayed at the top for decades had a fixed core: core values, and a reason for being. They called the second one core purpose. It says why you exist, apart from money: what's different for your customer because you're there. 'We fit dormer windows' is what you do. 'Giving families more room without having to move' is why.
A purpose is never finished, and that's what sets it apart from the BHAG. The BHAG is a goal for ten to twenty-five years with a finish line; you hit it or you don't, and there's a separate lesson for it, The BHAG: one big goal with a finish line. The DNA is something else again: that's the bar you brought with you as the founder, and it's about life inside the company. The purpose says what the world outside gets from it.
You find it by asking. Write down what you do and ask: why does that matter? Ask again with every answer. Collins and Porras did it five times; around the fourth or fifth time you get to something that will still hold in twenty years, even if you're making something else by then. Sinek saw the same thing from the outside: customers and staff choose you for the why first, and only then for what you make.
Jim Collins and Jerry Porras, Built to Last (1994): core purpose, the reason for being, with the five whys from their article 'Building Your Company's Vision' (Harvard Business Review, 1996). Simon Sinek, Start with Why (2009): the golden circle.
Impact rather than activity
What changes for the customer because you're there? A sentence about what you make or deliver is still an answer to the first question.
Never finished
You don't achieve it the way you hit a goal. It stays put while products, markets and people change.
Yours
Put a competitor's name above it. If the sentence still holds, it says nothing about you.
Pitfalls
It's tied to your product
If the sentence names your product or your technology, it stops being true as soon as you add something alongside it. Ask again why customers come to you.
It does nothing when you decide
If it only sits on the canvas, it steers nothing. It only works once you hold it up against a job, a hire or something you decide to pass on.
Watch and read
The man behind the golden circle explains it himself: if you start your story with why, you attract people who believe what you believe.
Watch on YouTubeA Dutch company where every choice, from the bar to the suppliers, follows from why it exists: all chocolate slave-free, not just its own. In Dutch.
Watch on YouTubeRead
Built to Last
Jim Collins en Jerry I. Porras · 1994 · ISBN 9780887306716
Where this lesson's model comes from: the fixed core of companies that last, with core values and a reason for being. A thick research book. In Dutch: Gebouwd voor de toekomst (ISBN 9789058712134).
View the bookStart with Why
Simon Sinek · 2009 · ISBN 9781591842804
The golden circle: why, how, what. An easier read than Collins and Porras, and the book behind the TED talk. In Dutch: Begin met het waarom (ISBN 9789047004943).
View the bookApply it
- 1
What do you do?
One sentence, the way you'd say it to someone at a party. 'We maintain the building services in care homes and hospitals.' That's where you start.
- 2
Why does that matter?
Write the answer down and ask again, five times. Only stop when the answer will still hold in twenty years, even if you're making something else by then.
- 3
What do the others say?
Have two or three people who know the work well go through the questions themselves. Put the answers side by side and look for what all three recognise.
- 4
Does the sentence pass the test?
Does it describe impact rather than activity? Would it be wrong for a competitor? Is it never finished? Would a good colleague be proud of it?
- 5
Which decision will you hold it up against?
Name the next big decision: a job, a hire, something you'll pass on. Ask at that point whether it fits why you exist, before you look at the price.
Examples
Purposes side by side
Building services firm for healthcare. What: maintaining climate systems in hospitals and nursing homes. Why: making sure people in healthcare only have to think about care. Accountancy firm. What: annual accounts and tax returns for business owners. Why: letting business owners sleep without worrying about their money. Dormer builder. What: fitting dormer windows. Why: giving families more room without having to move. Tony's Chocolonely. What: chocolate bars. Why: making slave-free chocolate the norm across the whole industry, not only in their own bars.
Five whys, written out
What: we maintain climate systems in hospitals. Why? So they don't break down. Why? So care can carry on. Why? So patients and staff never have to think about it. Purpose: making sure people in healthcare only have to think about care.
An accountancy firm that said no
The first version was 'reliable advice for SMEs'. Any firm could say that. After five whys it became: letting business owners sleep without worrying about their money. After that they turned down a large client who only wanted the cheapest tax return.
Do this in your own business
Everything up to here is free. What you fill in for your own business, you keep in Boldcaster.
- You write the Purpose section of your strategy, and it stays on your strategy page.
- You assign the lesson to your team and see who has done it.
- The quiz counts towards your progress, and you see which lesson comes next.
Four weeks free. You'll land straight in this lesson.
Quiz
6 situations. You need 5 of 6 right. You can try again at any time.
1.A printing company writes as its purpose: 'We deliver high-quality print, on time.' What's wrong with it?
2.You ask three colleagues why you exist. You get 'doing good work', 'taking the hassle off the customer's hands' and 'making money'. What do you do?
3.A leadership team writes as its purpose: 'The largest installation firm in the Netherlands by 2035.' What do you say?
4.Your purpose is 'Making customers happy with smart solutions.' How do you quickly test whether it says anything?
5.A cleaning company's purpose is 'making sure people work in a healthy building'. An estate agent asks them to give empty properties a quick one-off clean before they're sold, at a good price. What does the purpose do here?
6.A web agency's purpose is 'Building the most beautiful WordPress sites in the Netherlands'. They want to move to a platform of their own. What does that say about their purpose?
Nothing is saved here. In the app, the quiz counts towards your progress.
Read next
- The BHAG: one big goal with a finish line · You'll know whether it's time for a BHAG, and if it is, you'll write down one goal for 10 to 25 years with a finish line your team can repeat back to you.
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