Wake up - Your Product is NOT Your Purpose

Apple doesn’t just make iPhones; IBM doesn’t just make computers; Tesla doesn’t just make cars; BP doesn’t just make oils; Williams doesn’t just make F1 cars; GlaxoSmithKline doesn’t just make medicines. Their products (output) are driven by each company’s distinct ‘Purpose’;

• Apple: to empower creative exploration and self-expression
  
• IBM: Essential…to the world
  
• Tesla: acceleration of sustainable energy and autonomy
  
• BP: We deliver heat, light and mobility products and services to people all around the world in ways that will help to drive the transition to a lower carbon future
  
• Williams: Inspired engineering that enables a sustainable future.
  
• GSK: to help people do more, feel better, live longer.
  

In every walk of life, on every day of the year, across all genders and age groups, individuals come up with new ideas for products that will challenge any known or perceived issue.

Technologists and product entrepreneurs are wizards at convincing themselves that the next product they develop will change the world, show the world how competent they are, and create the most wanted product since the innovation of the iPod or The Cloud. 

Unfortunately, things don’t always go to plan

Here’s a brief list of products where enthusiasm and belief were not enough to convince their audience that the developers dreams, were in fact just that, well intentioned dreams; Google Glass, Segway, Facebook Phone, Twitter Peek, LaserDisc, Disc4000 (Kodak), Smokeless Cigarettes, New Coke, Google+, Microsoft Vista, Astrocolor, and the list goes on and on…

Why didn’t these products become successful? Because emotion, the need to compete and self-belief to create the next great thing, overlooked the reason [if there was one] why they were put on the drawing board in the first place. The Purpose.

A Purpose - is ‘the reason for which something is done or created or for which something exists'.

Relate this definition to some widely used actions/products/functions and their purpose

Action/Product/Function                       Reason (Purpose)

• Breathing                                              Oxygenate our bodies
  
• Television                                              Watch media content that we like
• Fire Extinguisher                                Stop a fire
• Personal Trainer                                  Stay healthy

The intention of innovation stems from entrepreneurs and developers who have the belief that they are able to challenge the list above and readdress the reason (purpose), enabling a more valued resolution. 

Purpose                                                         Action/Product/Function

• Oxygenate our bodies                         Ventilator Machine
• Watch Media Content                         Streaming service to any device
• Stop a Fire                                              Alarm linked to Fire Station
• Stay Healthy                                          Fitness Application on mobile device  

An Organisations Reason for Existing

Most businesses exist to sell a product or service to a target audience, why else exist? Once they are up and running, they instinctively move away from focusing on the company purpose and onto more of their internal drivers; Vision, Mission and Objectives. 

Internal drivers are mandated by the leader, it’s what keeps the lights on, increases shareholder value, pays salaries, provides confidence that the product/service has value (because someone else has bought it) and allows the organisation to develop the company further, either through organic or acquisition growth.

But…..

When you take your eyes away from the company purpose and focus only on your internal measurements, you enter a dangerous area of losing visibility of your markets, being ignored, commoditised or worst of all complete failure.

Products are important. When established organisations mature, they create a back catalogue of products that have cost millions in sunk costs but return differing levels of revenue streams:

• Products with stable or increasing revenues tell you that you are either meeting the customer need (purpose) and/or have healthy multi-year contracts (subscriptions).
  
• Products that have static or declining revenues tell you that are becoming detached and not actively addressing the customer need (purpose).

Organisations that take their focus away from aligning their business strategy with their organisational purpose, create a desperation to continue extracting the maximum possible revenues from existing products /services to obtain returns for the time spent in research & development and cover the costs to sell and support the product/service. 

Recognising that your organisation may have the opportunity to address a ‘purpose’ does not mean that you should. 

Think about how investors decide to invest in a business, the product is not the deciding factor. Investors look for the reality  of the 'Purpose' you are addressing with your product as this will determine the longevity and viability of your proposition . So whether you are an investor or the leader of a company, you will (should) be making the critical decision about the 'found' purpose and if it aligns to your business strategy and focus.

Every market has different revenue opportunities. You may choose to operate in a niche (smaller revenue and competitor) market or conversely to challenge a larger revenue market. Initially, this has nothing to do with the product/service you develop, this is about the desire of your market to purchase something in order to address the purpose, acknowledging that some ‘Purpose’s’ are restricted to certain market segments; countries, industries, genders, animals, sports etc.

Why ‘Purpose’ matters

Ensuring that you continually align your organisation to its purpose and not its products was clearly articulated by IBM’s Chairman, President & CEO Ginni Rometty during a recent Bloomberg interview in September*, where she clearly defined IBM’s purpose as being “Essential….to the world”. Think about the enormity of ‘Big Blue**’ when you try to rationalise to yourself Ginni's next statement, “Don’t protect your past”. Here is one of the largest companies in the world ($79 billion #38 Fortune 500) that have shareholders and investors to appease, but the CEO is focused on what is in front of her (secular growth) not what has gone before (cyclical growth). 

In an adjacent technology category resides Apple, who have moved from 17th in 2012 ($108 billion) to 3rd in 2019 ($265 billion) in the Fortune 500 listings. Why? Because their purpose aligns to the consumer (buyer) “to empower creative exploration and self-expression”. They are not consciously trying to be the leader in a market or become the largest revenue company. It all happens because they focus on their purpose, meet the need of their target market(s), continually challenge the [changing] norm and not rely on a single or group of products from their past, even though the products are well architected to stand the test of time.

Synopsis

Being innovative and disrupting the norm is what has accelerated the development and adoption of technology that enriches all our lives. But with speed of innovation and ever-increasing consumer-led need comes commoditisation. When you were first to market, you had an advantage, but that period of leadership is declining and shorter.

Whatever your product or service offering there are more challengers entering the market either as start-ups, up-starts or corporates diversifying through acquisitions or collaboration, all looking to take your place and retire you as an onlooker. 

Understanding your value to your market (now and in the future), needs a 360-degree appreciation of what is happening. Tradition would have you look backwards when planning forwards, using past achievements and challenges to prepare for the next fiscal.

Why not just stand still and see what is in front of you, rather than dismiss what is looking right in your face or being conveyed to you by your employees, advisors and partners. Take a leaf from Ginni Rometty, “Don’t protect your past”. At least, not until you have considered the future and seen if your past still aligns to your [organisation’s] Purpose (the future of your consumer).

At SynergySix our work focuses on the alignment of your organisations Go-To-Market strategy with your company purpose. Click her and take some time to read through our approach using the SynergySix Flow Chains™ framework.

  *- https://www.bloomberg.com/news/videos/2019-09-20/ginni-rometty-on-ibm-s-purpose-video

  ** - During the mid-20th Century, IBM was known for its mainframe computers. They were pervasive. They were the standard of coolness in the business and scientific world. They were also big, like soda machines big, and they were blue. So, people started to tongue-in-cheek call them the big blue. To live up to the name IBM had a huge blue sign on its Manhattan building.