SDG Strategy Lab

Decisions Tools Bookshelf Bulletin Board About

Purpose Pyramid

What It Is

My definition of strategy is that a strategy is a framework that makes hard decisions easier. The Purpose Pyramid is my favorite strategic framework.

A good strategy:

Is a framework with depth and dimensionality to deal with uncertainty
Provides long-term vision
Defines the goal being pursued
Sets a direction forward
Identifies critical near-term objectives
Communicates all of the above clearly and coherently, and therefore
Enables decision making

The Purpose Pyramid specifically captures a strategy in 3–5 key elements:

Purpose: A clear statement of what you are trying to achieve
Pillars: The three key accomplishments required to achieve the purpose.
Plans: The three specific activities under each pillar that you are currently pursuing to accomplish that pillar.
Principles (optional): The non-negotiable values that will not be compromised in achieving the purpose. The ends do not justify the means.
Panorama (optional): The environment within which the strategy is being pursued.

The Principles and Panorama are optional if they have already been defined elsewhere.

When To Use It

A good strategy is essential to achieving any significant objective. When you know that you need to bring about something hard, it is wise to think through the strategy that you will use to realize it, and the Purpose Pyramid is a great tool for doing so.

This can be a company strategy — where your objective is to become the kind of company to which you aspire. It can be a marketing strategy — to become known for something or to achieve a certain level of success in the market. It can be a technology strategy — to realize certain gains in your business through the use of technology. It can be an organizational strategy — to establish a certain kind of culture with a certain quality of team. I could go on, but I think you get the idea.

Whenever you want or need to move from where you are today to a better position in the future, and the way to accomplish that isn’t intuitively clear, then you will likely benefit from defining a compelling strategy, and therefore you may benefit from using the Purpose Pyramid.

How To Use It

We can think of three aspects of “using” the Purpose Pyramid:

Establishing the strategy
Making decisions within the strategy
Revisiting the strategy over time

Establishing the Strategy

Establishing a strategy using the Purpose Pyramid involves completing the 3–5 elements that comprise the framework.

The first decision to be made is whether to use a simple Purpose Pyramid (with just Purpose, Pillars, and Plans) or a comprehensive one (adding Panorama and Principles). A sound strategy will always be shaped by the external environment and the organization’s values. If a strategy is being defined within a context where a higher-level strategy has been fully defined (with Panorama and Principles), then the environment and values can be assumed to be inherited from the larger strategy. Otherwise, it is best to develop a comprehensive Purpose Pyramid.

Developing the Purpose Pyramid is not a simple exercise completed in an afternoon brainstorming session. Each element requires careful consideration and typically a fair amount of work. The elements are generally developed in the sequence of: Principles, Panorama, Purpose, Pillars, Plans.

Documenting an organization’s non-negotiable Principles is a not a trivial exercise. In Built to Last, James Collins and Jerry Porras defined Core Values as “The organization’s essential and enduring tenets — a small set of general guiding principles; not to be confused with specific cultural or operating practices; not to be compromised for financial gain or short-term expediency.” The authors emphasize that companies should have very few Core Values “for only a few values can be truly core — values so fundamental and deeply held that they will change or be compromised seldom, if ever.”

Unfortunately, the term “core values” is over-used and misused by many organizations. Leaders make a list of feel-good adjectives (e.g. “Trustworthy”) or nouns (e.g. “Innovation”) that they think will make outsiders perceive their organization to be honorable, rather than digging deep to name what truly shapes the organization’s behavior. Therefore, the Purpose Pyramid eschews the term “core values” and instead calls these non-negotiable Principles. One way to capture these guardrails is by at least initially phrasing them as “we always” or “we never” followed by an action statement (including a verb). For example “we always put the customer’s needs ahead of the company’s desires” or “we never harm the environment for financial gain”. If you ever violate these principles, those inside and outside the organization should rightly stand up and challenge you.

Developing this list of Principles can take months. This is a great opportunity to put together a small team made up of representatives from diverse parts and various levels in the organization under the direction of the person on the leadership team who most frequently asks questions like “is that really consistent with who we are?”. Task the team with bringing a near-final draft list of Principles back to the leadership team.

A good starting point is a survey of employees and customers asking the simple questions “What do you believe are the guiding principles for the organization? What does the organization always do? What does it never do?” This can be followed by an examination of key decisions made over the past several years. Which of the Principles identified by employees and customers were actually consistently followed and when were there violations? When a principle was violated in a given decision, in retrospect would the organization have been better off if it had been kept? From this research, the task force will likely be able to identify a list of 5–10 candidate non-negotiable Principles that reflect how the organization makes decisions aligned with its values.

It is critical for the leadership team to own these Principles, so I recommend a final step in this process, which is to engage the leadership team in a workshop to narrow the candidate list down to 3–6 Principles to which they are willing to commit. A great tool for this is the Strategy Sieve (to be discussed in a separate article).

Once the list is finalized, these principles need to be shared with the organization. That doesn’t mean merely sending out an e-mail with a bulleted list. It involves acknowledging the contributions of the team members and describing why each Principle made the list. A very powerful way to underscore these Principles is to describe prior decisions that violated them and how that hurt the organization. Another, almost as powerful way, is to describe prior hard decisions where the Principles were held and how that led to the right decision. Both of those approaches not only communicate the Principles but show how they will be used in decision making and demonstrate leadership’s commitment to them.

You might consider holding an all-employee meeting where junior members of the task force describe the process and present the Principles. Members of the leadership team then describe prior decisions, evaluate whether or not the decision aligned with the principles, and how the outcome was shaped by adherence to or violation of the principles. Record the meeting and make the video available to those that can’t attend the meeting or that join the organization in the future.

These principles should not only guide the big decisions made by leadership, but also the day-to-day decisions made by front-line employees. Everyone needs to believe that they will be supported when they make hard decisions in alignment with these Principles. The Principles should attract new team members who align with them and should cause team members who disagree with the Principles to consider finding employment elsewhere.

What I just described for capturing the non-negotiable Principles probably sounds like a much bigger effort than you thought would be necessary for developing a strategy, but without defining an organization’s true values, decisions will be hard and many inconsistent decisions will be made. The good news is that once the Principles are defined for an organization, they can be used to guide all of the organization’s strategies. Optimally they will never change.

Capturing the Panorama is a similarly important and major undertaking. Like the Principles, developing the Panorama once can inform many strategy efforts, however, unlike the Principles, the Panorama needs to be refreshed regularly to capture changes in the external environment.

The point of the Panorama is to acknowledge the factors outside and inside of your organization that will impact your ability to achieve your Purpose. A common way to reflect this is in a SWOT: Strengths, Weaknesses, Opportunities, and Threats. I know some organizations don’t like using the term “weakness” and others have rejected the SWOT framework outright. It doesn’t really matter how you capture it, it is simply essential that you do take the time to consider how your world is changing in ways that will impact your strategy.

I will more fully describe how to complete a Situation Assessment in a future article, but I would recommend that you consider one or more environmental frameworks to make sure that you are thinking holistically about the external factors impacting your strategy. Two common ones worth considering are Porter’s Five Forces and PESTLE.

In the 1980s, Harvard Professor Michael Porter identified five factors that determine the attractiveness of any industry: the threat of new entrants, the power of suppliers, the power of customers, the threat of substitutes, and the level of internal rivalry. PESTLE is an acronym standing for Political, Economic, Societal, Technological, Legal, and Environmental. I prefer a slightly modified version of PESTLE: Demographic, Sociocultural, Political/Legal, Economic, Technological, and Global (unfortunately, that list can’t be simplified to a memorable acronym).

Whatever frameworks you choose, I recommend considering each element one by one — identifying how it impacts your business or organization:

The current situation
Known trends
Areas of uncertainty
Resulting opportunities for you
Resulting threats to you

Completing this matrix will likely require extensive research. It helps to consult with experts in each of these areas as you develop each set of perspectives. What you learn along the way is as valuable as what ends up being captured in the Panorama.

If using the SWOT format, you reflect on the collection of opportunities and threats identified through the external situation assessment to identify the short list of opportunities and threats most relevant to your current strategy effort. This can be done in a leadership team workshop using a tool like multi-voting — give each leader three “opportunity” votes and three “threat” votes and tally the votes to identify those that should most strongly shape the strategy.

Evaluating the internal environment is at least as important as the external environment. Using the SWOT framework, these are captured as “strengths” and “weaknesses”. For a company, these can most clearly be seen from a competitive perspective — in what ways do you outperform and underperform competitors? Some factors are measurable, others will likely need to be learned by asking customers. But it’s also important to identify the internal strengths and weaknesses that may not be readily apparent to customers — does your culture attract top talent? do you have valuable intellectual property? are you slow to make decisions? are your systems outdated? does organizational conflict drive inefficiencies?

Once you’ve documented the external and internal situation for your organization it should help shape all of your strategies, however, depending on the pace of change in your industry you probably will need to refresh it roughly once a year.

With clearly articulated non-negotiable Principles and a deeply understood Panorama, you are ready to define your Purpose.

The Purpose is the simplest statement of the desired outcome of your strategy. No matter the nature of the strategy being developed, the Purpose should:

Be clear and concrete. Have a well-defined “finish line”.
Create compelling value for those funding and executing the strategy
Be achievable but challenging
Be grounded in reality and not a complete departure from the existing focus.

Sometimes the objective of your Purpose is dictated by others, e.g. reduce expenses by 20%. At other times, you set an aspirational objective for yourselves, e.g. become the share leader in our market.

In either case, it’s important to spend time getting the words right for your Purpose statement. Use a thesaurus (or online equivalent) to identify synonyms for each word in your initial draft purpose statement. Pay particular attention to verbs, using active rather than passive verbs. Try to use positive words that people can get excited about. Be precise with your language whenever possible. You can also use tools like ChatGPT and Google Gemini to help with rewording.

Examples (using Gemini):

From “Reduce expenses by 20%” to “Generate an incremental $1M in free cash flow”
From “Become the leader in fitness apps” to “Seize leadership in fitness apps”
From “Seize leadership in fitness apps” to “Seize the #1 app download position in the fitness category”

Once you have nailed down the Purpose, complete the strategy statement by explaining how you will achieve that purpose by defining the Pillars to the strategy. For example, coming out of halftime in a close game, a football coach might set the strategy as “We will outscore our opponents by at least 10 points in the third quarter (Purpose) by dominating time of possession (Pillar 1), shutting down their star receiver (Pillar 2), and establishing our running game (Pillar 3).”

Pillars sit between the Purpose and the Plans. Like the Purpose, they are objectives, but they are intermediate objectives that specifically support the Purpose. Like Plans, they explain what you are going to do, but they summarize the result of your actions (your Plans) in a way that links directly to the Purpose.

While the Purpose can feel like a big, almost impossible stretch, the Pillars should feel more achievable. Your people should be able to say “I believe we can do that.” If you’ve selected the right Pillars, then everyone should believe that, if you successfully accomplish all of the Pillars, then you will achieve your Purpose. They also should believe that, if you fail to accomplish any one of the Pillars, you will likely fail to achieve your Purpose.

The final step in developing the Purpose Pyramid is to identify the initial set of activities within the strategy. These Plans are specific initiatives to be managed towards accomplishing each of the Pillars. This active project list should regularly be refreshed as Plans are completed until each Pillar is completed and the Purpose is achieved.

Making Decisions Within the Strategy

Once the strategy is defined using the Purpose Pyramid, decisions become much easier. Any options that violate the non-negotiable Principles are automatically rejected. Remaining options are weighed against their contributions to advancing the Pillars and eventually achieving the Purpose.

Of course, other factors come into play (financial attractiveness, available resources, leveraging capabilities and strengths, etc.), but ultimately all decisions must align with the strategy. The Strategy Sieve can prove helpful in considering all of these factors and reaching a decision with clarity, consensus, and confidence.

Revisiting the Strategy Over Time