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Built to Last, by Jim Collins
and Jerry I. Porras
Core Purpose
Chapter 11, pages 224–228
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 [emphasis his] 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 [in the general business world] 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.” 3
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
. . .
One powerful method for getting at purpose is the “Five
Whys.” Start with the descriptive statement, “We make
X products” or “we deliver X services,” and then
ask “why is that important?” five times. After a few
whys, you'll find that you're getting down to the fundamental
purpose of the organization. We used this method to deepen and
enrich a purpose discussion in some work we did with a market
research company. The executive team first met for several hours
and generated the following statement of purpose for their organization:
“To provide the best market research data available.”
We then asked the following question, “Why is it important
to provide the best market research data available?” After
some discussion their answer reflected a deeper sense of this
organization's purpose: “To provide the best market-research
data available so that our customers will understand their markets
better than they could otherwise.” A further discussion led
the team to realize that their sense of self-worth comes not just
from selling market-research data but in actually making a contribution
to their customers’ success. This line of self-questioning
eventually led the company to identify its purpose as: “To
contribute to our customers’ success by helping them understand
their markets.” With this purpose in mind, this company now
frames its product decisions not with the question “Will
it sell?” but with the question “Will it make a contribution
to our customers’ success?”
The “five whys” can help companies in “mundane”
industries frame their work in a more meaningful way. For example,
an asphalt and gravel company might begin with “We make gravel
and asphalt products.” After a few whys it could conclude
that asphalt and gravel is important because the quality of the
underlying infrastructure plays a vital role in people's safety
and experience; driving on a pitted road is annoying and dangerous;
747s cannot land safely on runways built with poor workmanship
or inferior concrete; buildings with substandard materials weaken
with time and crumble in earthquakes. From this introspection
may emerge the purpose: “To make people's lives better by
improving the quality of man-made structures.” With a sense
of purpose very much along these lines, Granite Rock Company of
Watsonville, California, won the Malcolm Baldrige Quality Award—not
an easy feat for a small rock quarry and asphalt company.
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