I started my career at Mars Inc, the confectionery and petcare company, in the early 90s.
It was a tough gig as a graduate trainee.... there was an Alan-Sugary 'you're fired' threat around every corner if you didn't perform.
But corporate life was in many ways very simple - in retrospect. I went into marketing. The only thing that really mattered was growth, profits and market share, and we had a fairly simple set of analogue tools at our disposal. Call the agency. Make an ad. Do some point-of-sale display. Come up with a 'line extension'.
Since then corporate life has become a whole lot more complicated, and things are changing at lightening speed. Environmental sustainability, diversity and inclusion, digital and (in particular) AI, threats to global supply chains, remote working, social and political divisions... it all seems to be happening.
In this context, how do we make good decisions, ideally more often than bad ones? At exec level, and throughout the company?
You need a Compass.
Over the last decade I've helped companies across multiple sectors develop their own Compass: software, food & drink, telecoms, professional services, financial services and more.
It starts with the company's Worldview. What's the market sector and wider system we're in? What's our point of view on that sector and system? What problem are we addressing?
That leads into our Organisational Purpose, our 'Why'. What's our company's role in the system? What's our optimal strategic contribution, aligning to what the world needs and what we're good at?
The Purpose links to our Vision, our 'Where To'. What will success look like in eg 2030, for us and key our stakeholders?
Our Purpose is driven and activated by our Model. That's one aspect of our 'How'. It describes how we create value, for our customers, our employees, our investors and for the world at large. For IKEA, for example, affordability and designing with a pricepoint in mind is a key part of their Model. For many companies, it takes some work to define their Purpose-aligned Model and the key capabilities that underpin it.
Finally there's our Values, the other 'How'. Here's we're describing our desired Culture, usually defined by a set of Values that we aspire to. The critical thing is that the Values are aligned to our Purpose and Model. One of IKEA's Values is Cost Consciousness, which is clearly even more important than usual in a company that prioritises Affordability for its customers.
All together the elements above are a powerful decision-making and behavioural framework. The idea of the Compass is to be super tight on the things that need consistency, and super loose in areas where you want people to take the initiative.
The Compass captures choices and consequences; helps resolve tensions
Because the Compass is designed to inform and guide decisions, the design of the Compass requires executive teams to wrestle with business tensions and use the Compass to capture their high level strategic choices and priorities.
For example, how do we balance short term commercial goals with the need to invest in environmental sustainability? In behavioural terms, how do we celebrate individual achievement whilst acting as one team?
Defining the Compass is also a perfect opportunity to bring silo-ed areas of business in from the cold, and make them core to the company's model and ways of working. I have helped many businesses use the co-creation of a Compass as their way to make sustainability core to their business's model and culture.
It's a catalyst for change
The Compass has one foot in the company's current reality, and the other foot in the company's desired future. It's the most powerful catalyst for organisational change. It drives strategy. It will evolve as it needs to... for many companies the Purpose may endure for many years, as (for example) the Model evolves in line with learnings, with growth and with changes in the business ecosystem.
Logic and Magic
You need both, as my ex-Unilever colleague Marc Mathieu would say. The Compass is both strategic (it's full of choices) and it's an inspirational narrative. The different parts of it join up into a strategic story that employees can make sense of. 'Ahhhh... that's what the company's trying to do... that's how we're doing it... now I understand the story I'm playing a part in'.
For everyone, by everyone
The Compass is a 1-pager. It forces choices (what to put on the page and what leave out). Because it's for everyone in the company, it requires concise, simple and engaging use of language. Take on the challenge of making it resonate with everyone, whatever their job, however much he or she is paid. If he or she is not interested, accept responsibility and take on the challenge of making your company's direction and journey more resonant.
Not only is it for everyone, it's also informed by everyone. I don't mean that a hundred thousand people in a global company hold the pen.... but use it as an opportunity to seek the widest and deepest input, before a small empowered team does the hard work. Seek external input too, and work closely with the Board. Because they'll be carrying your Compass too.
If you enjoyed this article, do read more about purpose statements and narratives...https://www.willgardner.co/post/the-purpose-statement-necessary-but-insufficient
About the Author
Will Gardner helps leaders to achieve positive change in their organisations and in the world, by unlocking the full potential of their people through Strategy, Team Coaching and Change Leadership.
Will is based near London, but supports organisations worldwide.