How Clarifying Purpose Drives Alignment
By Andrew Toyer
Do you know where the word kangaroo comes from?
According to one story, two Australian explorers came across the iconic biped for the first time and asked a local Aboriginal man “What on earth is that creature?”. Their answer - “Kangaroo”. “Too easy!” the explorers thought and proceeded on their journey with a little more knowledge under their belt.
The only problem is that “kangaroo” means “I don’t understand you” in the local Aboriginal tongue!
It turns out this anecdote is more fiction than fact, but we find truth in the idea that miscommunication can emerge in almost any setting. This thought resonates deeply with us, as we are often seeing organisations with the best intentions missing the mark with their customers and stakeholders. Just like the kangaroo fable, we believe one culprit for this miscommunication is often the absence of clarity, specifically when organizations are grappling with their purpose.
Connecting the Dots Between Message and Purpose
I want you to take a moment to reflect on how your company talks about purpose.
- How does your company talk around purpose internally?
- How does your company express their purpose to the market?
- Would you describe this messaging as clear and consistent?
Now take another moment and think about what your company is doing.
- Where is your company investing money? What products are they developing?
- What activities would you say best embody your company’s purpose?
Can you see a clear line of sight between what your company is doing, and how they are talking about purpose?
If drawing this connection was difficult for you, you probably aren’t the only one struggling to connect the dots. Without a clear, compelling expression of purpose (though both words and action) stakeholders inside and outside are forced to make assumptions when it comes to purpose, diluting the strength and persuasiveness of a clearly expressed purpose. If people don’t know what you stand for, how can they stand with you?
LEGO’s Rediscovery of Purpose
One company who has achieved true alignment between their purpose and their brand promise is LEGO. LEGO’s purpose is clear and compelling – "to inspire and develop the builders of tomorrow".
Purpose is central to every business decision that LEGO makes; Vice President Peter Kim calls purpose their “north star”, the light which guides both their messaging and their activities in the market. By letting their purpose guide both their messaging and business activities, LEGO expresses their purpose with clarity, helping them connect with stakeholders to deliver on this purpose in the real world through their brand experience.
At this point you might be asking “Why does LEGO care so much about letting their purpose guide them?”
Because not following their purpose almost bankrupted the company.
Despite being Denmark’s most iconic brand, LEGO was on the brink of going bust at the turn of the century - in the early 2000’s, LEGO was losing $1 million a day. Former CEO Jorgen Vig Knudstorp (now Chairman of the Board of the LEGO Brand Group) was given a monumental task – bring the company back from the brink of bankruptcy.
As Knudstorp took up the mantle of leadership, he went on a personal journey to discover what made LEGO unique in the eyes of their customers and stakeholders. The answer? It boiled down to LEGO’s ability to create empowering building experiences through their products. As Knudstorp said during the times of LEGO’s financial struggles:
“We had a huge number of people writing to us saying how much the brand meant to them. That convinced me we could survive, and the brand would survive. We were just poor managers of the brand”
What did he mean by being poor brand managers? He meant that LEGO had moved away from producing products that empower people to create. In other words, they were no longer aligned to their purpose.
What did this misalignment look like for LEGO? There were typical examples of overdiversification away from the classic brick; producing clothing lines, opening theme parks, and producing several video game series.
The one example of misalignment that really stood out to us though; LEGO started producing and selling pre-assembled toys. How can you inspire children to build by selling them something preconstructed?
Knudstorp had the same question, and came to quite a radical conclusion, LEGO had lost the clarity of purpose that had captured the imagination of multiple generations of past builders.
Solving Identity Crisis Through Clarity of Purpose
Expressing oneself clearly is a problem we all struggle with, and organisations are no different. How does a company overcome this then? In LEGO’s case, their path was taking a scattered unfocused portfolio of services and products, and trimming until there was a clear line of sight between every product, purpose and message to their stakeholders.
This process wasn’t an easy one; Knudstorp had to make tough, deliberate choices about what LEGO retained and what they discarded. Hundreds of products, services and jobs were cut, to increase cash flow and reduce company bloat. Brick design policies were reimagined; every brick now needed to be modular and multipurpose (those ninja blades? They were windscreen wipers in another set). Longstanding partnerships with companies like Shell were cut, and even LEGOLAND, their iconic series of theme parks was sold off in pursuit of purpose alignment.
Finding clarity in their purpose wasn’t only cutting the old, it was also finding the new. LEGO developed new partnerships with the WWF in a mission towards sustainability, to ensure that children “can dream of and build exotic and natural worlds both old and new” now and into the future. They opened “Lego House” in Denmark, an immersive playground that helps children to develop core social competencies during their youth. Most recently, LEGO released LEGO Life – a youth social networking platform where children can share and celebrate their unique LEGO creations, which helps inspire the builders of tomorrow through digital mediums. These new activities all have a clear line of sight to the company’s purpose of inspiring children to build and imagine.
This process of reclarifying their purpose was bold, difficult and painful. But guess what? It paid off.
Despite some recent financial difficulties, LEGO has experienced unrivalled growth in the toy sector since facing bankruptcy 14 years ago. LEGO is now the world’s most valuable toy brand, over 7 times more valuable than the next largest toy company, experienced 13 straight years of growth since their realignment to purpose and was declared the Most Powerful Brand in the World in 2014.
Customers also connect with LEGO’s clearly expressed purpose – consumers consider LEGO the 2nd most reputable company in the world. Reputation Institute (founders of RepTrak Global 100) attribute LEGO’s stellar reputation to their alignment to purpose, being a company “whose products are in complete alignment with its values on societal contribution and business transparency.”
LEGO’s journey is a great example of purpose alignment driving business success. By reconnecting with their reason for being, LEGO were able to rebuild the clear line of sight between their purpose, their brand and their products. Through clarifying their messaging and aligning to purpose, they have recaptured the imagination of a new generation of builders.
If your company is struggling with articulating their purpose, here are some thought starters that you can bring to your next discussion.
- Could you tell somehow who had never heard of your company how each of your products align to your company’s purpose?
- Could you explain your company’s purpose exclusively through what activities they are currently investing in?
- In the pursuit of purpose alignment, would your company be courageous enough to sell off a product as iconic as LEGOLAND?
This is part of our Karrikins Brief series on Purpose-Alingment. Tap into the power of aligning operations, strategy, and culture to a compelling and directive purpose.