'Purpose' refers to the the overarching purpose of a company. It explains why the company exists and what contribution it aims to make beyond its economic objectives.
A clear purpose provides direction and helps companies align their decisions, objectives and actions with a shared understanding.
Above all, the purpose answers questions such as:
- Why does the company exist?
- What problem needs to be solved in the long term?
- What contribution does the company wish to make to its customers, society or the environment?
- What impact do you hope your work will have?
- What values guide our actions?
The terms ‘purpose’, ‘mission’ and ‘vision’ are often used interchangeably, but they have different meanings:
| Term | Meaning |
| Purpose | Why does the company exist? |
| Mission | What, specifically, is the company doing to fulfil its purpose? |
| Vision | What future state does the company wish to achieve? |
| Values | What principles do staff and managers follow? |
A clearly defined purpose can help start-ups to:
- to make strategic decisions in a consistent manner
- to establish a distinct corporate culture
- Motivating and retaining staff
- Connecting with customers and partners on an emotional level
- to set itself apart from its competitors
- to maintain long-term objectives despite changes to the business model
A purpose should be specific, credible and linked to the company’s actual actions. General statements such as „making the world a better place“ are usually insufficient if it remains unclear what specific contribution the company intends to make.
One possible structure is as follows:
We exist to [Target audience] to help them, [relevant change or effect] to achieve.
A common mistake is to use the purpose solely as a marketing message. If communication, the business model and actions are not aligned, this can undermine the trust of customers, employees and partners.
A company’s purpose can evolve alongside the organisation. However, its fundamental essence should provide long-term guidance and remain relevant even in the face of growth or strategic changes.
innoWerft helps founders to identify the core purpose of their business idea, link this to their business model and positioning, and communicate it clearly to customers, employees, partners and investors.