'That business purpose and business mission are so rarely given adequate thought is perhaps the most important cause of business frustration and failure.' Peter F. Drucker
It made me laugh when I read in Christensen's How Will You Measure Your Life that Enron had a 'Vision and Values' statement centred around four key values: Respect, Integrity, Communication, and Excellence (note the capital letters). It's an extreme example of the emptiness of many corporate values statements.
Plenty has been written about the importance of organisational purpose and yet it still is often characterised by a lack of clarity and confusion. Christensen says that a company's purpose is comprised of three parts:- likeness (the vision of the company they want to become), commitment (the focus to get there) and metrics (the measures of success). It must be deliberately conceived, chosen and pursued but when that is in place how the company gets there is likely to be emergent (responding to challenges and opportunities that emerge).
If, as can happen, the purpose has come through an 'emergent strategy entrance' in which certain powerful managers and employees believe that the company is there to be used to help them achieve their personal ends (whatever those might be), it's a de facto purpose that ultimately damages the organisation. But a powerful purpose guides process and aids autonomy.
Incidentally, Ben Horowitz and Marc Andreessen (of VC firm Andreesen Horowitz) have marked the 5th anniversary of their company with a short podcast discussion of Christensen’s theories around disruption, which I've embedded above. They talk about why his theories are still relevant, how they help guide decision making at the company, and how disruption has come to be seen in such negative ways and yet it is how progress happens (‘If you don’t like disruption you’re basically saying you don’t like new things’). There's an interesting point made about the advantage that comes from having the founder of the company still as CEO (like Google, Amazon, Facebook). Whereas an older company with a third or fourth generation CEO gets very good at focusing on optimisation of the business they are in and find it harder to innovate in disruptive ways, founders can still re-imagine the business and see it through a very different lens. Well worth a listen.
Thanks to Antony Mayfield for the podcast link. Part One of the series, on software eating the world is here.
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