Purpose before Strategy

The French call it the “raison d’être”; others call it your “purpose” or your “why”. Herbert Joly, the CEO of Best Buy, penned an article in HBR describing how he needed to find the company’s “Why” before he could turn around the then failing business.

When Joly first became CEO of Best Buy, the large US based electronics outlet was in trouble and they weren’t alone. Their main rival, Circuit City, had already been liquidated and Amazon was continuing to devour everything ‘bricks and mortar’ like kids consuming Halloween candy. In his article, Joly wrote that before he and his team could craft a turnaround strategy they first needed to find (or re-find) their corporate purpose. He quoted Simon Sinek who stated, “people don’t buy “what” you make, they buy “why” you make it”.

Purpose is the start of all enterprise and it’s that raison d’être which attracts employees to work there and customers to buy their products. We’ve previously written about how Adidas re-discovered their purpose as a performance athletic shoe company after drifting too far into the fashion world. The Body Shop lost touch with its purpose (and customers) after Anita Roddick sold the business. Joly’s article is remarkable in that he goes into detail about how he and his team discovered their purpose and takes us through the measures taken together with his team. Here’s the method Joly used to find Best Buy’s “Purpose” which he says can be found at the intersection of four quadrants. Ask yourself:

“What does the world need?” These are big items that are impacting our society. Capture all the big items, not just those you believe in. Ask how critical are these issues and what difference would it make if they were addressed? What stands out? One stand-out for Best Buy was that people and businesses wanted to be more efficient and productive with their time.

“What are people at our company passionate about?” Inside the heart of every company, you’ll find what drives the people who work there. Ensure you look at all levels of employees – not just senior management and dig deep. Joly’s team discovered they were all tech geeks who had a passion for helping people discover how tech could enrich their lives.

“What is our company uniquely good at?” What sets your enterprise apart and allows your team to solve problems that others can’t. Identify unique competitive advantages. Avoid generics like “our dedicated sales team”. Tech is an expensive and sometimes complicated investment. Best Buy felt an in-person, hands-on experience was important to help people identify tech devices that could help them be more productive and more fulfilled from their business or personal purchase.

“How can our business create economic value?” Looking forward, examine opportunities that could come from the above assessment. Are there potentially profitable opportunities? If so, ensure you rank their attractiveness. Best Buy identified that although tech devices could bring high productivity gains, they were sometimes difficult to use or confusing to set up. Best Buy could create economic value by helping businesses and individuals set up their devices properly so they could realize the productivity gains and enjoy the full potential of their tech purchase.

In Joly’s case the team realized early on that the world didn’t need more TV’s, computers and phones etc. but, rather, people needed tools to help them be more productive. They also needed assistance setting them up and understanding how to use them so they could realize the productivity gains or full entertainment value of their tech purchase. This realization led to more instructions and tutorials within Best Buy stores, better staff training and to the creation of the Geek Squad service team that sets up and services the electronic equipment at the client’s site. By focusing on the underlying human needs that motivate people to seek out tech products and services, Joly and his team tapped into a desire in his employee base to help others succeed by leveraging technology to be more productive. Only when Best Buy discovered their “Purpose” could they develop a strategy that connected them with their customer base. It also helped them attract employees who shared their same values. Can you identify your “Purpose”? Before developing your next strategic plan, make sure you do!