Purpose statement

A purpose statement is one sentence saying why an organisation exists at all, beyond making money. It names who is better off because the organisation is in the world, and it should hold steady while strategy and products change around it.

It is not a mission and not a vision. Mission statement development covers what the organisation does and for whom, while purpose sits a layer above and answers why anybody should care.

The test is quick. If the sentence would still be true after you sold the product line, it is a purpose — if it describes the product line, it is a mission wearing a better suit.

Key takeaways

• A purpose statement answers why the organisation exists, in one sentence.
• Mission says what you do, vision says where you are going, purpose says why.
• Purpose only counts when it changes a decision somebody would otherwise make differently.
• A written purpose shows up in hiring, in pricing and in the work you turn down.

How it works

A purpose statement works by giving every other statement a parent. Strategy, brand and hiring all answer to it, so the sentence has to be short enough to repeat from memory and specific enough to rule something out.

A purpose statement earns its keep in arguments. When two options both look profitable, the sentence is what breaks the tie, and one that has never broken a tie is decoration with a frame around it.

Keep money out of the wording. Profit is how an organisation stays alive rather than why it exists — a purpose statement mentioning shareholder return is a financial objective in better typography.

Corporate level strategy decides which businesses you are in, and the purpose statement is the test that choice has to pass before anybody funds it.

A brand playbook carries the sentence into everyday language, and a brand positioning framework turns it into a claim the market can check against what you actually do.

Funders expect the thinking written down somewhere. The Small Business Administration tells founders that a business plan should describe the problems the business solves, and carry the mission statement up in the executive summary.

Employer brand strategy is where the sentence gets its hardest test, because candidates compare what you publish with what current staff tell them in private.

Write it in the present tense, name a beneficiary, and cut every word that would survive deletion. Most drafts fail on the second point: they describe an activity and never say who ends up better off.

Naming somebody is the whole trick. “To make life easier for independent pharmacists” points at real people, while “to deliver excellence” points at nobody and could belong to any organisation on earth.

Three drafting traps catch most teams — writing a sentence any competitor could sign, writing one the organisation cannot afford to honour, and writing one nobody below board level has ever said out loud.

Review it rarely. Strategy can change every year and positioning every campaign, but a purpose rewritten at each offsite was never doing the job it was written for.

The sentence also travels further than the document that holds it. Most people meet it in a job advert, a sales call or a supplier briefing rather than on the page where it was published.

Examples

The clearest versions come from organisations that have to explain themselves in public and cannot hide behind a brochure. Government bodies, hospital groups and outsourcing providers all publish a sentence their own staff can be asked about.

The United States Department of Labor (DOL) publishes exactly one sentence of this kind. It exists to foster the welfare of wage earners, job seekers and retirees, improve working conditions and secure work related rights.

Note where it sits. The DOL files that sentence under the heading “Our Mission”, which is how most organisations label the line even when it reads as a purpose.

Hospital groups state purpose in terms of the population they serve rather than the procedures they bill for. The sentence then has to survive the week they close a clinic that was losing money.

Outsourcing providers in the Philippines and India often build purpose around careers rather than cost. A provider whose stated reason for existing is creating professional work in Cebu or Davao then has to answer for attrition in a way a cost claim never would.

Member owned organisations have the easiest time of it. A credit union exists to serve the people who own it — a purpose statement already written before anybody sits down to draft one.

Buyers of outsourced services meet purpose statements in every pitch deck they open. The test that works is whether a provider’s own staff describe the company the same way, which one site visit will settle.

Related terms

• business level strategy: how a single unit competes, once purpose has settled why it exists.
• strategy implementation: turning written statements into funded work with owners and dates.
• mission statement development: writing the sentence that says what you do and for whom.
• corporate level strategy: the choice of which businesses to be in at all.
• employer brand strategy: how the organisation presents itself to people deciding whether to join.

FAQ

How long should a purpose statement be?

One sentence. If it needs a second, the extra material is usually mission or values, and it belongs in those statements instead.

What is the difference between purpose, mission and vision?

Purpose says why you exist, mission says what you do and for whom, and vision says what success looks like later. Purpose should outlast the other two.

Who should write the purpose statement?

The people accountable for the organisation, with the words tested on staff who never sat in the room. A sentence that only the board recognises has already failed.

How do you tell a purpose statement from a slogan?

Ask what it rules out. A purpose statement makes some otherwise attractive option clearly wrong, while a slogan would survive any decision you might take.

Does a purpose statement change outsourcing decisions?

It should. A purpose built on careers pushes you towards providers with low attrition and real progression, which is a different shortlist from the cheapest hourly rate.

Read how organisations compare providers across markets and functions at Outsource Accelerator.