One of the most basic questions all companies and organisations need to ask themselves is why do we exist? We all need to know if what we are doing is worth it or if others are doing it better. If your shop, product or service is no longer fulfilling a purpose, your organisation will fail. Defining the primary task of the organisation is to clarify what task it must perform if it is to survive.
This is not to prompt mass organisational kamikaze, but simply to focus on purpose.
Sometimes a technical problem can overwhelm a company - for example, cash flow or increasing raw material costs, or production failure. But if a company is generally well run why would it fail?
It could be that:
- No one wants the product any more (e.g. black and white TV) - better products are invented
- Margins are too low to justify producing it - the product cannot be produced cheaply enough compared to the competition
So clarity about what exactly you are doing, who it is for, why anyone would want to buy it and how it meets needs is absolutely mission critical.
However, confusion about purpose can affect anyone and I would suggest that if you can’t agree what you are here for then your enterprise will probably fail. At the very least the work of the organisation will be disorganised and lots of time will be wasted.
Can you tell me in one sentence what your organisation is for? What is its purpose?
If you run a private company this is often a description of your product: we build luxury yachts and sell them all over the world; we sell hand cooked crisps in a variety of unusual flavours. But it is not always that easy. If you run a university, is your primary task to educate students or produce research papers? If you are a large company in a small town is your role to produce nuclear energy or to provide jobs for the people of the town?
At Notting Hill Housing we took quite a long time to come up with a clear statement of purpose. The senior team sat in a badly lit hotel room in Twickenham and hammered it out over a couple of afternoons. The stunning outcome was:
We provide homes for low income Londoners.
This is one of those things that looks simple once it has been achieved. But we really needed to think quite hard about our primary function. Ask yourself: if you stopped doing it, would you have any reason to exist?
It’s the fundamental job of our organisation to provide affordable housing in London – we have 30,000 homes under management. But these homes are in huge demand and people move on very rarely so our key objective is to build more. Our strategic priority is to build as many new homes as we can each year in an attempt to offer more options for families and individuals who cannot afford to buy or rent in the market place.
Of course we do other things too and there is always a temptation to add to a mission statement, to include those staff who are doing other important things: Care and Support, Community Development, Regeneration, Student Housing, and so on. But we didn’t want a list of what we do – we wanted an expression of what our purpose is.
There is huge value in such a succinct and doggedly worked-through statement of purpose:
- Everyone in the organisation knows what we are here for and could tell you in their own words, if asked.
- The simple purpose affects how we all do our jobs. Everyone knows what it means for them, even if their actual job is not about providing homes.
- When we are recruiting staff or board members they know what we here for. This can help them decide if they want to work with us or not, helping to ensure our team is "on the same page". We don’t tend to attract people who think that we should be doing more about unemployment.
- Internally we avoid long standing conflicts inside the organisation - e.g. "We make all the money – they just waste it". Generally a colleague providing a commercial, revenue generating activity will now say, for example “We make significant surpluses to invest in low priced housing for people who need a home”. This obvious tension between commercial and charitable activity is smoothed by us all having the same objective.
- The statement helps us prioritise activities. For example we could use our surpluses for tenant training, job creation, crèches, environmental improvements, public art – but we do not. All of these activities are worthwhile and a number of housing associations spend considerable money on these (to our mind) “non-core” activities. We generally use our surpluses to support the creation of additional homes.
But the other reason to be absolutely crystal clear and precise about purpose is that it is the first step in creating your strategy. I will deal with this next week.
Image: Gold Lane, Burnt Oak, Barnet. An award winning development of 8 Eco houses with sedum roofs by Audley English Architects for Notting Hill Housing.