Core purpose

Excerpts from Built to Last, Chapter 11, pages 224–228
Jim Collins, Jerry Porras

• Core purpose, the second component of core ideology, is the organization’s fundamental reason for being. An effective purpose reflects the importance people attach to the company’s work — it taps their idealistic motivations — rather than just describing the organization’s output or target customers.
• It captures the soul of the organization. Purpose gets at the deeper reasons for an organization's existence beyond just making money, as illustrated by a speech David Packard gave to HP people in 1960: “I want to discuss why a company exists in the first place. In other words, why are we here? I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper and find the real reasons for our being. As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so they are able to accomplish something collectively that they could not accomplish separately — they make a contribution to society, a phrase that sounds trite but is fundamental … You can look around and still see people who are interested in money and nothing else, but the underlying drives come largely from a desire to do something else — to make a product, to give a service — generally to do something that is of value.”
• Purpose (which should last at least 100 years) should not be confused with specific goals or business strategies (which should change many times in 100 years). Whereas you might achieve a goal or complete a strategy, you cannot fulfill a purpose; it is like a guiding star on the horizon—forever pursued, but never reached. Yet while purpose itself does not change, it does inspire change. The very fact that purpose can never be fully realized means that an organization can never stop stimulating change and progress in order to live more fully to its purpose.

Examples of Core Purpose

• 3M: To solve unsolved problems innovatively
• Fannie Mae: To strengthen the social fabric by democratizing home ownership
• Mary Kay: To give unlimited opportunity to women
• Merck: To preserve and improve human life
• Nike: To experience the emotion of competition, winning, and crushing competitors
• Walt Disney: To make people happy