As an investor I see many business plans and there are various reasons that they do not get the full attention that they may deserve. How can an entrepreneur avoid these many pitfalls and be more certain of a successful presentation?
Company Purpose, Mission, Vision, Values, Principles, etc. it’s all jargon… or is it? What’s the point? Why have it on the first slide of your pitch to an investor?
In the 1990s and 2000s Management consultants got excited and created lots of ways to describe the essence of a company and all of them have slightly different meanings and reasons for existence. Let’s unpick the differences between the main ones; choose one and then look at some examples. So first to the differences:
- Vision – This describes what the company wants to be in the future – something to be pursued by employees and management. Typically this is a road map which guides transformational initiatives towards the growth of the company. It may be a page written by senior management in attempt to get company thinking beyond the day-to-day activities in a memorable and clear way.
- Mission – This statement describes the business that the organisation is in today and in the future. It helps staff and management have focus when going about their usual daily activities – it defines what needs to be accomplished and in which market segment. Typical visions will describe three things: the key market; the contribution to clients in that market; and what makes the company’s contribution unique.
- Values – Values describe the culture of the company and how the company should act in the real world – a bit like a moral compass. Words that describe values include: Integrity, Collaboration, Passion, Diversity, etc. What company wouldn’t have these values?
- Principles – These are a set of directions for employees and management rather than a compass. These prescribe how the values are implemented by employees and management on a day to day basis. For example, one aspect of implementing Integrity (a value) is to Obey the Law (a principle).
- Purpose – This takes things to a new level: looking in from the outside. It defines the company from the shoes of the customers rather than the impact the company will have on the customers. It says “this is what we are doing for someone else”. It is designed to inspire your staff to do good work by impacting the lives of all those the company touches in a positive way. The Purpose is a short, focused statement that will guide and inspire employees and management to work with customers in the appropriate way.
By defining the Company Purpose in the first slide of your pitch to Business Angels and investors (of time or money) you are telling them how people will feel when they interact with your company. It helps to explain why customers will approach your company rather than why you will need to chase them. Anyone making a commitment to your company will understand how you will respond to them and how you will interact. It is powerful way of demonstrating that customers will refer you to their friends…
How about some examples? And here is a challenge too: can you guess the companies that made these Purpose Statements. Write your answers below!
- “A was founded to make it easier to find high-quality information on the web.”
- “B is a collaborative project to produce a free and complete encyclopaedia in every language.”
- “To bring about radical breakthroughs for the benefit of humanity.”
- “Nourishing families so they can flourish and thrive.”
- “To help people manage risk and recover from the hardship of unexpected loss.”
- “To help people reach their dreams by listening, challenging and inspiring greatness.”
- “Keeping alive the magic of childhood.”
Interestingly I couldn’t find a “Purpose Statement” for Apple or Microsoft… Can you?