Purpose before Strategy

This is so un-Canadian but here goes.?? Someone pointed out this week that Wharton is ranked the #1 Exec MBA in the world by US News and our SABRE Simulation Strategy Course is the #1 ranked course in that MBA program.? Also, the #1 ranked part-time MBA is Chicago Booth where SABRE also runs. What a testament to the hard work of Ian Williamson and our SABRE development team.? Congratulations!?

This month’s newsletter (video here) is on finding your “purpose”, your “why”, your “raison d’être” and how one company needed to find it to turn around their fortunes.?

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. ?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 discover (or re-discover) 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 written about how Adidas needed to 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. ?What makes Joly’s article remarkable is that he goes into detail about how he and his team discovered their purpose.? Let’s follow the steps he used to find Best Buy’s “Purpose” which he says can be found at the intersection of the following four quadrants. ?

For each quadrant ask:

“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. Then 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 and dig deep. ?Joly’s team discovered they were all tech geeks with 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 your unique competitive advantage and avoid generics like “our dedicated sales team”.?? Best Buy felt tech devices are expensive and sometimes complicated to use and a hands-on experience was important to help people identify devices and services that could help them be more productive and more fulfilled from their purchase. ?

“How can our business create economic value”??? Looking forward, examine opportunities that could come from the above assessment.? Are there potentially profitable opportunities? Best Buy identified some tech devices were difficult to use or set up and that they could generate economic value by helping businesses and individuals install 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 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 and full entertainment value of their tech purchase. ??Best Buy’s purpose to?enrich its customers’ lives through technology led to more tutorials within Best Buy stores, better staff training and to the creation of a new business - the Geek Squad 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.? ??Have you identified your business’s “Purpose”? ??

Creating a Meaningful Corporate Purpose, Hubert Joly, HBR October, 2021