Beyond the specific contribution of each perspective, their highest potential comes by combining the three forms of logic with purpose simultaneously. Take for example the cases of Google, IKEA, and Johnson & Johnson, they demonstrate that success does not come from one perspective of logic alone, but from integrating purpose with all three. In the case of Google, analytical dexterity shows an outstanding fit between purpose and business model innovation, while also winning admiration and legitimacy in social arenas. Consider also the lessons that Yoffie and Cusumano derived from the study of Steve Jobs, Bill Gates, and Andy Grove.Footnote 42 The way in which their strategies were built is a good illustration of how the three forms of logic guide their decisions (e.g. dexterity in analysis, synthesis of information, big picture vision, and using guiding principles to generate game-changing business models).
This approach is consistent with literature that recognizes the multiplicity of logic as a source of strategic heterogeneity and innovation that help strategists develop more consistent purpose-driven strategies.Footnote 43 In this view, beyond the salient logic related to individual characteristics, such as an individual’s role in the organization, motivational affinity, or institutional biography,Footnote 44 purpose-driven strategies call for the combination of each perspective in a harmonious way. From a practical perspective, integrating each logic with purpose can be done by using what we call integrated tools. These are combinations of existing models—for example, SWOT analysis, Porter’s five forces, business model canvas, balanced scorecard—that form new tools and stimulate the integration of each strategic perspective with purpose.Footnote 45
An example of this and a very powerful tool is the Purpose Model Canvas.
It is an integrated tool that we have used with much success in companies of different sectors and sizes, ranging from big multinational corporations to local medium-sized companies. The tool is based on a model developed by Casadesus-Ricart.Footnote 46 This model, extensively explained in previous publications,Footnote 47 links choices and consequences by arrows based on causality theories, enabling users to identify virtuous cycles—feedback loops that strengthen the business model at every iteration. Based on this, the purpose model canvas helps the user contemplate all strategic choices and consequences forming the business model (e.g. pricing, segmentation, cost efficiency, productivity, marketing, customer service, innovation, recruitment). Then it considers the institutional principles of the company—its values, missions, policies, fundamental beliefs.
Once it has identified the key institutional and business model choices and their consequences, the user can identify whether a company’s strategy is coherent enough to enhance purpose fulfillment in these four areas:
Alignment: refers to choices delivering consequences that move the organization toward fulfilling its stated purpose in that it helps to clarify which decisions fit (and which do not) into the organization’s purpose.
Reinforcement: refers to choices that complement each other in the fulfillment of purpose. It takes the best from the existing capabilities to create synergies that amplify the impact of purpose.
Virtuousness: refers to virtuous circles, the feedback loops between choices and consequences, that help purpose to gain strength over time. Virtuousness is like the internal engine of purpose. It pushes purpose forward in every interaction and is the key distinguisher between great and mediocre purpose impact.
Sustainability: refers to the ability to sustain purpose fulfillment over time. It considers the challenges facing purpose that come from the competitive capacities of the business itself (e.g. imitation, substitution) or from the institutional environment (e.g., social shifts, reputation).
Finally, for each criterion, the model deploys analytical logic through indicators that evaluate various key aspects of the model (e.g. reinforcements between choices or virtuous circles). These indicators help to assess both how a company fulfills its purpose as well as the elements that fuel its fulfillment. In sum, the purpose model canvas helps us to see the connection between the “what,” the “how,” and the “why.”
Figure 4.1 shows a simplified and basic example of the purpose model canvas, illustrating the reinforcement of each perspective. First, the business model is depicted by the company’s key virtuous cycle (high volume, economies of scale, low cost, lost value) the key elements that reinforce it (low price reputation, supplier loyalty) and the overall result (high margins). Second, it shows how the institutional principles—environmental awareness, culture of service and cost consciousness—strengthen the virtuous cycle. Finally, it displays the key indicators (customer survey, gross yield per employee) that monitor alignment, reinforcement, virtuousness, and robustness of the whole model.
By using the purpose model canvas, we have seen how companies fuel strategy, reinforcing inspiration with analytical rigor over time. Indeed, this is the strategy we think best fits the example presented at the beginning of the chapter. More than simply coupling the logic of the consultant, president, and CEO with purpose, a purpose-driven strategy calls for jointly integrating each perspective with purpose, helping to establish a harmonious way forward.