Ask five leaders in your organization a single question: "Why does this organization exist?"
You'll get five different answers. None of them wrong. None of them specific enough to guide a single decision.
One leader will describe what you do. Another will describe who you serve. A third will point to financial returns. A fourth will cite the mission statement from the lobby wall. And the fifth, if they're honest, will say something like: "I'm not sure I've ever heard anyone answer that question out loud."
This is the most common leadership problem nobody talks about. Not because it's hidden, but because everyone assumes it's already been solved. Of course we know why we exist. We're a hospital. We're a polytechnic. We're a financial services company. We're a government agency.
That's what you do. It's not why you exist. And until you can answer the second question with something specific enough to choose among competing priorities, you'll keep producing strategic plans that look brilliant on paper and change nothing in practice.
Mission Statements Are Not Purpose
Most organizations have a mission statement. Few have an authentic purpose.
A mission statement is typically a carefully wordsmithed paragraph designed to be everything to everyone. It's broad enough to be inoffensive, vague enough to be interpreted however anyone wants, and static enough to have been written years ago. It hangs on the wall, appears on the website, and has approximately zero influence on how decisions actually get made.
Authentic purpose is different. It answers a harder question: "If this organization ceased to exist tomorrow, what specific thing would the world lose?"
If the honest answer is "nothing much, someone else would fill the gap," you don't have a purpose problem. You have an identity problem. And no amount of strategic planning will solve it.
The Three-Part Stress Test
Here's a quick way to tell whether your organization has a real purpose or just a sentence on a wall. Take whatever you consider your purpose statement and run it through three tests:
1. Specificity
Could this statement apply to any of your competitors or peers? If you can swap in another organization's name and the statement still works, it's too generic. "We provide innovative, client-centred solutions" describes every consulting firm on earth. It guides nothing.
2. Decision Power
Does this statement help you choose between two competing priorities? Can you use it to say "no" to something? Purpose that can't eliminate options isn't purpose. It's decoration. The real test: when two good ideas compete for the same resources, does your purpose tell you which one wins?
3. Stakeholder Resonance
Would your most important stakeholders recognize this as the reason they engage with your organization? Not your board. Not your marketing team. The people you actually serve. If you read your purpose statement to your best customer and they shrugged, it's not landing where it matters.
If your statement fails any of these tests, it's not guiding your organization. It's sitting in a frame.
The Solution Trap
Here's why this matters strategically: without clear purpose, organizations fall into what we call the Solution Trap.
The Solution Trap works like this. Something breaks. Revenue drops. A competitor disrupts your market. A regulation changes. A pandemic hits. The leadership team gathers and does what leadership teams do: brainstorm solutions.
Within hours, you have a whiteboard full of ideas. Revenue diversification. Digital transformation. New partnerships. Cost reductions. Organizational restructures. Marketing campaigns. Each idea is someone's answer to the crisis. Each is individually defensible.
And collectively, they're useless. Because you have fifty solutions and no criteria for choosing among them.
The criteria come from purpose. When you know why you exist and who you exist to serve, you can evaluate any proposal against a simple question: does this advance our reason for being, or is it a distraction dressed up as a strategy?
Without that filter, every idea competes equally for attention. Resources get spread thin. Nothing gets the sustained commitment it needs to succeed. And six months later, you're back in the same room with the same whiteboard, wondering why nothing changed.
Value Is Defined by the Receiver
There's a second dimension to the purpose problem, and it's even more uncomfortable.
Most organizations measure what they do. Transactions processed. Services delivered. Programs funded. Reports filed. These are activity metrics. They tell you the organization is busy. They say nothing about whether anyone is better off.
The shift that matters: from measuring activity to measuring outcomes.
| What organizations measure | What stakeholders experience | |---|---| | Training sessions delivered | Employees demonstrating new skills on the job | | Applications processed per day | Applicants achieving their intended purpose | | Patients seen per quarter | Patients reporting improved health | | Students graduated | Graduates employed in relevant roles at livable wages |
The left column is what you control. The right column is what matters. And most organizations have robust data on the left and almost nothing on the right.
This isn't a measurement problem. It's a purpose problem. When you don't have a clear picture of what value you exist to create, you default to measuring what's easy to count. Dashboards turn green. KPIs are met. Activity is high. And nobody notices that the organization has quietly stopped delivering on its reason for being.
Stakeholders Are Not Just Customers
One more dimension. When organizations think about who they serve, they typically think about customers. That's an improvement over thinking only about shareholders, but it's still too narrow.
Organizations operate within ecosystems. A hospital doesn't just serve patients. It employs clinicians, depends on insurers, answers to regulators, partners with suppliers, and serves the surrounding community. A government agency doesn't just serve citizens. It operates under legislative mandates, coordinates with other agencies, manages a workforce, and navigates political expectations.
If you design only for "the customer," you'll optimize for one stakeholder while ignoring the constraints and expectations of everyone else. Strategies that look brilliant in a customer-centric slide deck collapse when they meet regulatory reality, workforce resistance, or supply chain limitations.
Purpose includes all of them. The question isn't just "Who is our customer?" It's "Who are all the stakeholders whose outcomes matter, and whose expectations constrain what we can do?"
Map that ecosystem. For each group, ask what outcomes they need to achieve, not what products they want to buy. The gap between stated wants and actual needs is one of the richest sources of strategic insight you'll find.
Where to Start
You don't need a consultant or a six-month initiative. You need one conversation.
Get your leadership team in a room. Ask: "Why does this organization exist?" Write every answer on a board. Don't edit. Don't debate. Just collect.
Then look at what you've got. If the answers converge on something specific, testable, and stakeholder-grounded, you have a foundation to build strategy on. If they diverge into generalities that could describe any organization in your sector, you've found the real reason your strategy isn't working.
Five leaders. One question. The disagreement that surfaces is the most valuable strategic insight your organization has never confronted.
This post is drawn from Closing the Strategy-Execution Gap, a self-paced course that follows one institution through the discipline of anchoring in purpose before making a single strategic choice.