In this week’s episode of The Secret Sauce, Palantir Founder and CEO George DeMet dives into the importance of being in tune with your company’s purpose.
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Allison Manley [AM]: Welcome to The Secret Sauce, a short podcast by Palantir.net, that offers a quick piece of advice to help your business run a little bit better.
I’m Allison Manley, an Account Manager at Palantir, and today we’re talking with our Founder, George DeMet. He’s going to share why it’s so critical to understand your company’s purpose. It sounds like a basic concept, but it’s important to give clarity around why a company exists.
George DeMet [GD]: In a previous installment of the Special Sauce a couple of months ago, I talked a little bit about my personal history with family-run businesses and some of the values and principles that have helped guide some of the world’s most enduring companies. Values and principles are important because they help answer the question of how we as a company strive to interact with each other, with our customers, and with the world around us.
Today, I’d like to talk about the importance of understanding your company’s purpose, or why it is that we do what we do.
Being able to say what it is that gives your company direction and purpose is vital to attracting motivated employees and helping prospective customers understand why they should choose to work with you. Knowing what you do and why you do it is essential, but so is being able to communicate that vision to others.
A core purpose can be articulated in many ways. If you’re a very small company, everyone on the team probably already knows and understands your core purpose, and you may not even need to articulate it. But as your company grows and evolves, chances are that not everyone will come in with that shared understanding, and you’ll need to find a succinct and understandable way to describe to others the reason why your company exists.
Now the flip answer is “because getting a paycheck is what puts a roof over my head and food on my table”, but I think we can all agree that that’s not enough. There are a lot of different ways to make money, and we make a deliberate choice to do what we do. Fundamentally, a core purpose is an organization’s most fundamental reason for being. It does not change, but it inspires change. And most importantly, it must be authentic to the organization’s values and culture.
Many companies have a mission statement, which is a (usually) brief and aspirational statement describing what it is that the company seeks to do. The difference between a mission statement and a vision statement is that a mission statement focuses on a company’s present state while a vision statement focuses on a company’s future. Some companies tend to blend these statements, and in most cases, that’s okay. What’s important is that there’s an easy way for people to understand what the company is about and its approach. This is usually something that appears in the company handbook or field guide, and it’s often on the website as well. To be clear, a mission statement or purpose is something that should be distinct from your tagline or marketing slogan.
It’s my belief that regardless of what form it takes, a statement of purpose is not one of those things that you can just knock out in a workshop over an afternoon. It needs to come from deep inside you, and it needs to “feel” right. It’s also really important that the stated mission, vision, and values are be aligned with the actual culture of the company, or else they’re just lip service.
For example, Enron advertised Communication, Respect, Integrity, and Excellence as their core values, yet the actions of their senior leadership created a culture of greed that encouraged unethical behavior at all levels, using a variety of deceptive, bewildering, and fraudulent accounting practices to make the company appear more profitable than it actually was. The company’s traders were also actively involved in manipulating the energy market in California, illegally cutting power to the state and causing rolling blackouts in order to keep prices artificially inflated. Enron’s CEO, Ken Lay, even bragged to the Chairman of the California Power Authority that "In the final analysis, it doesn't matter what you crazy people in California do, because I got smart guys who can always figure out how to make money."
I would argue that one of the most important things that the executive leadership of a company can do is to reinforce the company’s vision and values. They need to hold other leaders in the organization accountable and accept ultimate responsibility for the company’s actions. As Harry Truman famously put it, the buck stops here.
At Palantir, our purpose is to strengthen humanity by helping others discover, create, and share knowledge. This informs the kinds of projects and clients we choose to work with, and along with our values and principles, it informs the approach our team takes to helping solve problems. It’s important to note that our purpose is not connected to any specific technology or even to the web itself; we just happen to believe that at this time and place in human history, the web is the primary conduit by which knowledge is discovered, created, and shared, and that we at Palantir have a role in helping others use the web in a way that helps strengthen humanity.
Especially during times of economic and political uncertainty, it’s especially important for companies to understand why they exist. Market conditions and technology change all the time, and if you’re going to be successful in the long term, you need to root yourself in something that is more stable. In our case, that means being able to help customers understand, articulate, and solve their problems in a holistic way. We have always defined our success by the results we help our customers achieve, not by the names of the brands we work with, or the amount of profit we make.
At the end of the day, I believe that companies are most effective when they can communicate who they are and why they are here. That’s something that we try to do at Palantir every day, and I think it’s a big part of what’s contributed to our success for the last twenty years.
AM: Thank you George! For more great tips, follow us on Twitter at @palantir, or visit our website at palantir.net. Enjoy your day.