VISION
ness 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 pur- sued but never reached. Yet although 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 identifying purpose, some companies make the mistake of simply describing their current prod-
velop new systems for reducing mortgage under- writing costs by 40% in five years; programs to eliminate discrimination in the lending process (backed by $5 billion in underwriting experiments); and an audacious goal to provide, by the year 2000, $1 trillion targeted at 10 million families that had traditionally been shut out of home ownership – minorities, immigrants, and low-income groups. Similarly, 3M defines its purpose not in terms of adhesives and abrasives but as the perpetual quest to solve unsolved problems innovatively–a purpose Core ideology consists of core values and core purpose. Core purpose is a raison d’être, not a goal or business strategy.
uct lines or customer segments. We do not consider the following state- ment to reflect an effective purpose: “We exist to fulfill our government charter and participate in the sec- ondary mortgage market by pack- aging mortgages into investment securities.” The statement is merely descriptive. A far more effective statement of purpose would be that expressed by the executives of the
Federal National Mortgage Association, Fannie Mae: “To strengthen the social fabric by continual- ly democratizing home ownership.” The secondary mortgage market as we know it might not even ex- ist in 100 years, but strengthening the social fabric by continually democratizing home ownership can be an enduring purpose, no matter how much the world changes. Guided and inspired by this pur- pose, Fannie Mae launched in the early 1990s a se- ries of bold initiatives, including a program to de-
that is always leading 3M into new fields. McKin- sey & Company’s purpose is not to do management consulting but to help corporations and govern- ments be more successful: in 100 years, it might involve methods other than consulting. Hewlett- Packard doesn’t exist to make electronic test and measurement equipment but to make technical contributions that improve people’s lives – a pur- pose that has led the company far afield from its origins in electronic instruments. Imagine if Walt
Core Purpose Is a Company’s Reason for Being
McKinsey & Company: To help leading corporations and governments be more successful
3M: To solve unsolved problems innovatively
Cargill: To improve the standard of living around the world Fannie Mae: To strengthen the social fabric by continually democratizing home ownership Hewlett-Packard: To make technical contributions for the advancement and welfare of humanity Lost Arrow Corporation: To be a role model and a tool for social change Pacific Theatres: To provide a place for people to flourish and to enhance the community Mary Kay Cosmetics: To give unlimited opportunity to women
Merck: To preserve and improve human life
Nike: To experience the emotion of competition, winning, and crushing competitors Sony: To experience the joy of advancing and applying technology for the benefit of the public Telecare Corporation: To help people with mental impairments realize their full potential Wal-Mart: To give ordinary folk the chance to buy the same things as rich people
Walt Disney: To make people happy
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HARVARD BUSINESS REVIEW September-October 1996
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