Shaping Organizational Identity: Purpose, Vision, Mission & Values Part 1.

As a leader, HR professional or consultant, are you interested in building a sustainable organizational future, perhaps after a merger, a restructuring or the entry of a new leadership team? Then this article is for you.

Go to any organisational website and, chances are, you will see a combination of statements that may include Purpose, Vision, Mission and Values (PVMV).

But what are they there for (really)?

Many leadership teams return from a retreat clutching statements that seem to have integrated all the latest corporate buzzwords with the help of a ‘Comfy Chair PVMV Statement Generator (AI?):

“Acme Synergistic Solutions: We're on a mission to disrupt the paradigm of widget optimization through next-generation, cloud-based empathy engines. By leveraging cutting-edge blockchain technology and fostering a culture of agile innovation, we empower our stakeholders to synergistically think outside the box and deliver impactful results.”

But I exaggerate for effect (...well, slightly). PVMVs can play a key role in shaping organizational identity. But it is more in how it is done and subsequently implemented than in the building of a Legoland of words.

Here are a couple of questions that I’ll be trying to answer in this first of a two-part article series:

1. Are Purpose, Vision, Mission & Values (PVMV) statements a waste of time?

2. If they are not, how can we define Purpose, Vision, Mission & Values?

Do PVMVs Drive Performance?

Bain & Company reports a decline in PVMV usage (80% to 30%). However, my own experience shows a rise in PVMV development projects with the general aim of uniting a diverse organization. While research is inconclusive on a direct link between well-written PVMVs and performance (see Hirota[1], 2010 and Jung, 2013, et al. for "pro" arguments; Forest[2], 2019, for the "no correlation" viewpoint), the real value lies in the crafting and implementation process.

What are the Benefits of Defining Your Organizational Identity?

• Clarity During Change: PVMVs become crucial during mergers, restructurings, leadership shifts, or market disruptions. They can provide a guiding light for a unified approach within a context that requires a reboot.

• Reduced Ambiguity: Clear PVMVs minimise misinterpretations, especially in diverse workplaces. This fosters a shared understanding of "why we're here," “where we are going,” “what we do and who we serve," and "what behaviour we priortise."

• Strategic Alignment: PVMVs act as a focal point for plans, structures, resource allocation, and performance evaluation, ensuring everyone works towards the same goals.

• Balancing Diversity & Unity: They counterbalance all the acceptance of diversity that an organization should rightly have, with what people share that unites them. This can facilitate convergence across divergent perspectives and generate creative solutions between different organizational tribes.

• Daily Reconnection: PVMVs remind team members of the organization's overarching long-term goal, a purpose beyond profit, core business and principles behind our behavioural DNA, answering the question "Why am I doing this?" during their daily tasks.

The Power of Implementation

Apart from making attractive posters on the wall, the true value of PVMVs depends on how they're crafted and used.

In the next section, I will explore how to clearly define these core concepts – Purpose, Vision, Mission, and Values.

Why? There is a great muddle out there, even between people in the same organization, as to what we mean by each element of PVMV.  Without shared meaning, it’s hard to agree on a ‘well-formed’ statement.

I don’t claim to have a definitive answer, but my colleague Bastian Küntzel and I have thought long and hard about this question and will share with you our own definitions.

[1] Corporate mission, corporate policies and business outcomes: Evidence from Japan, Hirota, S. et al (August 2010), Management Decision 48(7):1134-1153

[2] Analysis of Vision and Mission Statements Characteristics and their Association with Organizational Performance: A Guide to Writing Effective Vision and Mission Statements, Forest R. David (June 2020), Applied Studies in Agribusiness and Commerce 14(1-2):87-95

How can we define Purpose, Vision, Mission & Values?

In my consulting work, I must have seen over 200 sets of purpose, vision, mission, and values statements developed by our client organizations. I go to them as soon as I know we have our first meeting with a new client. They can indicate a lot, for example:

• CARE FOR IDENTITY: How much thinking has gone into them or are they just paying lip service

• RISK TOLERANCE: Do they show a willingness to be bold or a preference for playing it safe in the herd?

• FOCUS & PRIORITIES: How much clarity of direction and core activity is there; out of all the important things we could focus on what is key: products/services, customers, quality of life, everything (and nothing)?

• CUSTOMERS: Is it clear who they serve?

• ORGANISATIONAL PERSONALITY: Formal, quirky? Traditional, trendy?

• UNIQUE VALUE PROPOSITION (UVP): What makes them stand out?

• CONFIDENCE & ASPIRATION: Are their goals compelling and ambitious while being realistic?

• BEHAVIOURAL EXPECTATIONS: What a newly hired employee would get as an answer to the question: ‘How should I behave around here?”

• INCLUSIVITY: What kind of people would thrive there and who might find it uncomfortable?

Of course, it could all be a smoke screen created by a brilliant copywriter, but then everyone who actually worked in the organization would recognise the statements as BS, keep their heads down and prioritise what they thought was best to survive and thrive by reading the implicit organizational culture (namely, what most influential people actually seem to do).

So, in the first call, I’d often enquire what their organizational Purpose, Vision, Mission and Values are. If they say they’ll send them through by email afterwards, it may mean they don’t have them in the forefront of their mind. When I ask about Values people may say “I remember the first 3 - Integrity, Passion and Simplicity...and there’s another couple that I always forget, (looking down to check), Ah yes!...the last two are Transparency and Collaboration!”. This is an indicator that they may not be acting as identity shapers.

Some organizations suffer from “conflation-istis”, where the Vision is also the Purpose, the Mission is also the Vision, and Values are also the Behaviours. This muddled misalignment can lead to strategic dissonance, where the fundamental aspects that should help everyone in the company converge as they move forward are instead causing internal confusion - often leading co-workers to quickly discard them as a guide to day-to-day activity. We are then back to rampant individualism, tribalism and the dreaded complaint about ‘siloism’.

Here are some potential outcomes from these misalignments:

1. Purpose and Vision Confusion: Many organizations mistake their vision for their purpose. While the vision is an aspirational destination, the purpose should articulate why the organization exists in the first place. When these get swapped, companies might aim for lofty goals without understanding why these goals matter or what societal need they address.

2. Vision and Mission Overlap: Vision outlines 'where we want to go'; however, it is often confused with the mission, which details 'core activity’. This leads to strategic plans that are either too broad, lacking specific actionable steps, or too narrow, missing the broader aspirational goals.

3. Values and Behaviours Conflation: Values define what is important in the way people choose to behave, but they are frequently confused with behaviours themselves. This results in values being stated in ways that are too vague to be actionable, or in a list of behaviours that lack underlying principles.

To avoid these pitfalls, here are our definitions and the roles each should play within an organization:

1. Purpose: Purpose should answer the fundamental questions: What contribution are we making to the world that is worthwhile? Why should we get to play because we are making a positive impact? How does the world benefit from us being here? How is the world getting better because of what we are doing? What do we give back that is more than we take? It’s about the broader impact of the organisation’s existence, beyond profit and ‘shareholder value’.

2. Vision: So, you get to be here. To play. But what’s on the horizon as an ambitious but doable long-term goal? It answers, "Where does our ambition take us in going somewhere with our overall purpose in mind?” It’s the picture of where you’d like to go, painting a clear image of the kind of future you would be proud to aim for.

3. Mission: The Mission focuses more on the immediate future, detailing the choices we have been made about core areas of operation. It answers, "There are many ways to get there, what choices have we made about the core areas of operation we will focus on?" It defines the primary activities that the organisation will engage in to move towards the Vision. It clarifies who we serve and, broadly, how we serve them.

4. Values: As we are following our Purpose, working towards our Vision and carrying out our Mission, what are the most important and enduring principles that guide our behaviour in the organization, shaping the way we make decisions and engage in daily interactions?

5. Behaviours: Behaviours are observable actions that demonstrate values in practice. They answer, "How do we describe the values in action? If you walked into a room and noticed this Value, what would people be doing or saying that you’d notice". They provide a clear framework for specific behaviours we encourage and discourage.

Any statements you develop should be as free from management speak or nebulous language as possible.

By agreeing on what the terms mean before the process of developing them, we ensure that we are all working with the same end in mind. Then the iterative process of crafting them can begin.

Below you will find a summary of our definitions and the relationship between them.

My conclusion in this part is that we need to know the intended purpose of our PVMV statements, beyond ‘everyone else is doing it’ and how the components interrelate.  They must be coherent.

Alone they won’t drive performance (too many other factors in play), but if well-crafted they will provide an anchor point to reflect on around key questions people in organizations ask themselves: Where are we going? Why are we doing this? What do we actually do and for whom? How should we behave because we have chosen to emphasise some things more than others in how we relate to others?

What's Your Take?

Do PVMVs hold value, or are they just empty corporate jargon? How do you define these elements as part of the process of shaping organisational identity?