Purpose: Beyond Strategy and Business Models

When BSC was conceived it was clear the need to translate strategy into actions by measuring execution. Strategy alignment was firmly supported by this methodology and financial results were the main drivers of strategy. For many years, the purpose concept was formulated as a guiding principle but was far away from day-to-day execution.

It was in 1991 when I was in the MBA Program at HEC Montreal that I had the opportunity to read Managing Across Borders by Bartlett and Ghosal. Then in 1994, these two authors published an article about purpose: Beyond Strategy to Purpose. This article was one of the pioneers of the practical integration of the concept of purpose to strategy and is very useful in helping companies evolve from 3S (strategy, structure, and systems) to 3P (purpose, processes, and people) organizations.

Years before, Andrews in his book The Concept of Corporate Strategy talked about the role of the Chief Executive as the architect of the Purpose. C-Suite tasks were attached to purpose but sometimes executives did not give either the time or the importance to that matter. In the last thirty years, the purpose concept has become more and more used in strategy design to guide people´s actions inside and outside the firm. Purpose-driven organizations have become the answer to the stakeholders in such a way that external needs and internal values are better aligned.

Recognized consulting firms have written valuables articles about purpose. Business schools, important researchers, investment firms, and important multinational organizations incorporate the purpose concept into their day-to-day activities which is driving the strategy formulation and execution toward a sustainable prosperity for all stakeholders. Nowadays, authors like Rey (Purpose-Driven Organizations: Management Ideas to a Better World) propose a new management logic of purpose with a more humanistic approach to management.

Purpose has become the guiding point to strategy formulation and execution. It articulates all other perspectives (finance, marketing, processes, innovation) into a well-defined concept of corporate sustainability and individual well-being. It gives life to strategy by integrating values from the inside to social needs outside the organization. It gives meaning to our daily activities and is crucial to rethink the value-added offered and provided to stakeholders.