I speak with many CEOs about leadership. Most feel that they’re strong leaders and enjoy sharing the war stories that have shaped their leadership approach.

When I shift the conversation to talk about their company purpose and core values, I typically hear this: Oh yes, we have all that covered. We’ve spent a lot of time on leadership development work over the past five years.

But when I ask them to articulate their company purpose, I rarely get a succinct response. The reason is that leadership development, while valuable, is not the same as the foundational work that defines the core essence of the business.

And few mid-market companies address it with the same vigor as that of Fortune 500 companies.

Mid-Market Companies Don’t Yet Embrace Company Purpose

The terminology arising from Jerry Porras’ and Jim Collins’ foundational work in the 1990s, such as company purpose, core values, company vision, core ideology, and BHAGs, is now commonplace in Fortune 500 companies. It is not commonplace, however, in mid-market companies, even 15 years after it was presented to the business community.

Why?

The most common reason is that mid-market CEOs have spent substantial mindshare on leadership development, and mistakenly believe that it includes business foundational work.

In my experience, most mid-market CEOs describe their leadership training as their years on the job—feeling that they’ve “been there and done that.” Experience doesn’t always equate to results though, and I’ve seen very few who lead by defining, describing, and measuring what they expect their people to achieve.

While most feel in their hearts and minds that they’ve already addressed “leadership issues,” they’ve failed to take that final and essential step of effectively communicating their vision throughout their company and the market.

Articulating Your Company Purpose Makes It Easier to Lead

People want to be inspired. An easy way to galvanize your people is to lead with your company purpose.

Your purpose is the single driver of all company activity. It’s the reason you, the CEO, come to work each day; it’s the reason the company exists—a reason that your leadership team should be able to clearly articulate and that the market understands.

This relatively simple concept often presents a challenge to mid-market CEOs after they start evaluating the initial drafts of their company purpose. It’s common for them to recite descriptive statements about their products/services and the markets they serve. These aren’t true company purposes.

A true company purpose can be defined as follows:

• It is not a goal or a strategy.
• It is not tied to your product/service or to your market.
• It is not tied to revenue, profit, or wealth.
• It is not bound by the constraints of time.
• It reflects your reason for being.

Your purpose is the ultimate reason the market accepts you; it’s the essence of why your market presence survives; it’s the GPS of your company. When making strategic decisions, always refer to your purpose, and ask yourself the following questions:

1. Does the decision support my purpose?
2. Does the decision strengthen my purpose?

What I’ve found is that executive teams who can clearly articulate their company purpose are more effective leaders, both internally and externally. Their people believe in it, and they believe that they’re following strong leaders.

And their companies usually perform better in the marketplace.