Developing Purpose, Vision, and Values

Jim Collins points out that when Merck & Company reached its hundredth birthday, it published a book entitled Values and Visions: A Merck Century. Note that the title doesn’t even mention what Merck does. Collins reasons that it could have titled the book From Chemicals to Pharmaceuticals: A Merck Century or A Hundred Years of Financial Success at Merck. But it didn’t. It chose instead to emphasize that it has been throughout its history a company guided and inspired by a set of ideals. He goes on to say that in 1935 George Merck II articulated those ideals when he said, “[We] are workers in industry who are genuinely inspired by the ideals of advancement of medical science, and of service to humanity.” In 1991 – fifty six years and three full generations of leadership later – Merek’s chief executive P. Roy Vagelos sang the same idealistic tune: “Above all, let’s remember that our business success means victory against disease and help to humankind.” (Recently Merck has been accused of putting profits before safety in the Vioxx trials. Has Merck strayed from its ideals? On the other hand, note that on May 22, 2006, at its 2006 Awards for Business Excellence Gala, the Global Business Coalition on HIV/AIDS paid tribute to the role of business in the global fight against AIDS and honored Merck & Co., Inc. for its ongoing commitment to fighting the HIV/AIDS pandemic on a national level in Botswana.My point here is not to praise (or condemn) Merck. The point is to illustrate how

Purpose, Vision, and Values (in tandem known as “Core Ideology”) can guide a company for years…keeping it on track through generations of management teams.Purpose, Vision and Values are three of the seven elements included in a strategic plan. They are the “soft” issues…but very critical to the success of the plan. The essence of this article is to explain in detail what they are, why they are important, and provide a few examples.

 First things first

However, before you begin developing your Strategic Plan (and clarifying your Purpose, Vision, and Values), it is important to understand what exactly you need from your business. As Bruce Wright (The Wright Exit Strategy) observes, “The whole purpose of starting a business is to create a means of income for yourself sufficient to support your immediate lifestyle needs and set aside enough money for the future, or to build the equity or value in the business to a point that you can sell it and become financially independent.” How much do you need? What is your magic number? In other words, first you need a financial plan.

Secondly, you can become, in the true sense, an entrepreneur and create a business that serves your life if you accept an adventure of personal exploration. You embark on the adventure at the beginning, and the beginning is you. If you want a better life, then make a serious commitment to get it.

Creating a better life for yourself has nothing to do with your business, until you complete an exploration of your essential character:

  • What are your core beliefs?
  • What kind of life do you want?
  • What do you value?
  • What is your essence?

These are the questions you must answer.

E-Myth calls it Your Primary Aim.

By definition: Your Primary Aim is about your life, not your business. Your business is simply one of the many aspects of your life. Your Primary Aim is the essence of your purpose in life. It is a brief statement summarizing whatever it is in you that is the source of your vitality, your commitment, your passion. Your Primary Aim isn’t about material things. It’s about life.

Now let’s begin to look at the pieces of your Strategic Plan.


Purpose is the set of fundamental reasons for a company’s existence beyond just making money. Purpose need not be wholly unique…rather its role is to guide and inspire…not necessarily differentiate. There have been numerous studies and surveys of employees that have concluded that involvement in meaningful work is actually a more important factor than pay. Meaningful work is what gets business owners, and employees, out of bed in the morning.

One of life’s central challenges is to keep closing the gap between where we are and where we want to be. This includes the connection between the work we do and knowing in our hearts the actual difference our efforts are making in the world. We need to understand what our contribution does to help people in their own work or their own lives. These meaningful activities are the single-most vital catalyst for prompting us to keep giving more of our untapped capacity to our daily efforts.

Purpose is broad, fundamental and enduring. A good purpose should serve to guide and inspire for 100+ years. A visionary company continually pursues, but never fully achieves or completes its purpose. It is a perpetual star on the horizon. It builds on our past, lives in our present, and holds hope for our future. Purpose is our spiritual DNA from which our vision, strategies, and goals sprout.

 Examples of Purpose from visionary companies:

  1. Merck – “We are in the business of preserving and improving human life. All of our actions must be measured by our success in achieving this goal.”
  2. General Electric – “Improving the quality of life through technology and innovation.”
  3. Hewlett-Packard – “Technical contribution to fields in which we participate (We exist as a corporation to make a contribution.)”
  4. Johnson & Johnson – “The company exists to alleviate pain and disease.”
  5. Marriott – “Make people away from home feel that they are among friends and really wanted.”
  6. Sony – “To experience the sheer joy that come from the advancement, application, and innovation of technology that benefits the general public.”
  7. Walt Disney – “To bring happiness to millions and to celebrate, nurture, and promulgate wholesome American values.”


Vision should be presented as a pen picture of the business in five to seven years time in terms of its likely physical appearance, size, activities etc. Vision answers the question, “Where are we going?” It is the picture of the end result…something you can actually see…not vague. Vision is knowing who you are, where you are going, and what will guide your journey.

Vision and direction are essential for greatness. In world-class organizations, every-one has a clear sense of where the enterprise is going. Only when the leaders of an organization know that their people understand the agreed-upon vision and direction can they attend to strengthening the organization’s ability to deliver on this vision.

Vision helps people make smart choices because their decisions are being made with the end result in mind. As goals are accomplished, the answer to “What next?” becomes clear. Vision takes into account a larger picture than the immediate goal. Martin Luther King Jr. described his vision of a world where people live together in mutual respect. In his “I Have a Dream” speech, he described a world where his children “will not be judged by the color of their skin, but by the content of their character.” He created powerful and specific images from the values of brotherhood, respect, and freedom for all—values that resonate with the founding values of the United States. King’s vision has passed a crucial test – it continues to mobilize and guide people beyond his lifetime. Vision allows for a long-term proactive stance—creating what we want—rather than a short-term reactive stance—getting rid of what we don’t want.

Vision is important for leaders because leadership is about going somewhere. If you and your people don’t know where you are going, your leadership doesn’t matter. Without a clear vision, an organization becomes a self-serving bureaucracy.  The top managers begin to think “the sheep are there for the benefit of the shepherd.” All the money, recognition, power, and status move up the hierarchy, away from the people closest to the customers, and leadership begins to serve the leaders and not the organization’s larger purpose and goals. The results of this type of behavior have been all too evident recently at Enron, World-com, and other companies. Once the vision is clarified and shared, the leader can focus on serving and being responsive to the needs of the people. The greatest leaders have mobilized others by coalescing people around a shared vision. Sometimes leaders don’t get it at first, but the great ones eventually do.

Tests of a compelling vision are:

  1. Helps you understand what business you’re really in.
  2. Provides guidelines that help you make daily decisions.
  3. Provides a picture of the desired future that you can actually see.
  4. Is enduring
  5. Is about being great – not solely about beating the competition.
  6. Is inspiring – not expressed solely in numbers.
  7. Touches the hearts and spirits of everyone.
  8. Helps each team member see how he/she can contribute.


Values govern the operation of the business and its conduct or relationships with society at large, customers, suppliers, employees, local community and other stakeholders. Values answer the questions “What do we want to live by?” and “How?” They need to be clearly described, so you know exactly the behaviors that demonstrate that the value is being lived. They are learned and reveled internal governors of right and wrong that we feel in our gut and throat. They help us choose what is most important.

 Core values are a small set of general guiding principles:

  1. They are not to be confused with specific cultural or operational practices.
  2. They are not to be compromised for financial gain or short-term expediency.
  3. They are the organization’s essential and enduring tenants…never to be compromised.
  4. The real difference between success and failure in a business can be traced to how well the organization brings out the great energies and talents of it’s people.
  5. It sustains this common cause and sense of direction through many changes which take place from one generation to another. (It is the stake in the ground that keeps everyone from veering too far off course.)
  6. In most cases it can be boiled down to a piercing simplicity that provides substantial guidance.
  7. Visionary companies have between 3-6 core values. (Any more than 6 and you begin drifting away from those that are core.)

 Putting it all together

It goes without saying that the purpose, vision, and values must be inter-linked and consistent with each other. Visionary companies have put purpose and values together in a Core Ideology. (Core Ideology = Core values + Purpose.)

 Sample Core Ideologies:

            Walt Disney –

  • No cynicism allowed
  • Fanatical attention to consistency and detail
  • Continuous  progress via creativity, dreams, and imagination
  • Fanatical control and preservation of Disney’s “magic” image
  • To bring happiness to millions and to celebrate, nurture, and promulgate wholesome American values. 

            Marriott –

  • Make people away from home feel that they are among friends and really wanted
  • People are number 1 – treat them well, expect a lot, and the rest will follow
  • Work hard, yet keep it fun
  • Continual self improvement
  • Overcome adversity to build character

As you develop (discover) your purpose, vision, and values…make sure they are yours…not someone else’s that just sound good. Purpose and Values come from the heart.

Parting thoughts

Jim Collins raises the question, “How can we be sure the core ideologies of highly visionary companies represent more than just a bunch of nice-sounding platitudes – words with no bite, words meant merely to pacify, manipulate, or mislead?” He then offers an answer. Social psychology research strongly indicates that when people publicly espouse a particular point of view, they become more likely to behave consistent with that point of view even if they did not previously hold that point of view. In other words, the very act of stating a core ideology influences behavior toward consistency with that ideology.

Enduring geat companies don’t exist merely to deliver returns to stakeholders. Indeed, in a truly great company, profits and cash flow become like blood and water to a healthy body: They are absolutely essential for life, but they are not the very point of life.


About Don James, CPA/PFS, CFP
Don is the Tax & Financial Planning partner with Kiplinger & Co., CPAs headquartered in sunny Cleveland, Ohio since 1982. He partners with business owners and families and specializes in goal achievement solutions, tax minimization strategies and serves in the role of gatekeeper of sound financial advice.

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