Keep your eyes on the stars and keep your feet on the ground.

—Theodore Roosevelt, US president

Congratulations—you’ve made it to the sixth rule. Now we can imagine that you might have reservations about spending your time on reframing your purpose. We have all been through arm-waving visioning exercises that made our eyes roll and led to nothing of significance changing in the companies we’ve worked for. Keep an open mind, as the exercise of reframing your purpose is not one of those time wasters.

You see, reframing your purpose is really about opening up the range of growth options that your company is willing to consider. It is about raising your sights from your current industry position, business model, and product offerings to allow you and your peers to pursue the adjacent market opportunities that digital disruption creates.

It is also about engaging the next generation. In our research for Goliath’s Revenge, we interviewed dozens of millennials to understand how they decide which companies to work for. The key finding is that this generation needs to feel that they are in service to a higher calling than market-share growth and stock-price appreciation. If they are the heart of your future workforce, then reframing your purpose is critical.

Doing so requires six actions: raise your sights, answer the Five Whys, embrace smart cannibalization, engage the next generation, align top down, and lead by example.

Raise Your Sights

Rule 6 is last for a reason. While the first five rules allow for rapid iteration and experimentation, established companies can’t test their purpose and learn from those test results. If you get your purpose right, you will change your company forever in terms of its innovation opportunities, growth trajectory, and access to talent. If you miss the mark, you risk joining the rudderless companies orbiting the corporate world, losing energy with each passing year.

Reframing your purpose involves changes to both your mission and vision. Your mission shapes your organization’s tone and culture. It focuses the energy of the company on how to deliver value to your customers day in and day out. Your vision defines your company’s aspirational goal in terms of the big problems you solve and how solving those problems contributes to the greater good.

Powerful mission and vision statements act as important catalysts for innovation. Figure 9.1 provides examples of how strong statements of purpose can raise the sights of entire organizations.

Your purpose is why you exist as a company. Don’t think about this in terms of the corporate doublespeak of large organizations. Even the smallest company needs to be crystal clear on its reason for being, and the idea that its purpose is broader than its current capabilities. Raising your sights literally provides room for your company, you, and your people to grow. It creates space for exploration, experimentation, and breakthrough innovation. It focuses your attention on serving the needs of existing and new customers alike.

Your company likely has a well-honed model for improving its existing products and current operations. However, innovation around how you make money is a much bigger leap. It opens up the potential risks and vulnerabilities inherent in your current business model. Only companies that have raised their sights have the courage required to pull it off.

Apple Raises Its Sights

An example might help. While you might think of Apple as a product innovation machine, that capability produced the flat line stock price of a company headed to its grave over its first two decades (Figure 9.2).

Only in 2001 did Apple’s stock price head for the stars. That is the year that Apple raised its sights and was willing to take on business model innovation. While the Macintosh was an innovative product, the business model of personal computers was not changed by it.

With the iPod, Apple innovated the exponential growth of a two-sided business model. The iTunes application connected artists with the broad population of Apple device users in an entirely new way. With the iTunes Store’s 99-cent-per-song business model, Apple broke apart the established business model of the music industry—the album. The iTunes innovation redefined the industry’s gives and gets to deliver music lovers a step-change customer outcome: just the songs you love without the filler of the songs you don’t.

The right side of Figure 9.2 tells a pretty convincing story. When Apple dropped “Computer” from its name in 2007, its sights were well and truly raised. Apple’s broader purpose became changing people’s lives for the better. The App Store was Apple’s next business model innovation, helping it go from strength to strength on the path to becoming the first publicly traded company valued at over $1 trillion.

Aspiring Goliaths across other industries are following Apple’s example and raising their sights. GM is morphing into a sustainable transportation leader that happens to include a highly efficient automotive manufacturing business. Discovery Insurance is migrating from a traditional insurance business model to an innovative one based on shared risks and rewards with its customers. Mastercard is broadening its purpose from running a credit card network to enabling modern payment ecosystems. Deere is evolving from manufacturing farm equipment to creating greater crop yield with precision agriculture.

All of these companies started with foresight about where the world is going and raised their sights about the role they could play in helping it get there. Take a moment to reflect on the digital transformation of your industry and the broader mission and vision that could unlock new innovation opportunities for your company.

Answer the Five Whys

Taiichi Ohno, founding father of what has become lean manufacturing, came up with the concept of the Five Whys as a way to understand a company’s true purpose. Think of it as peeling back the layers of an onion to get to the core of why your company even exists. Start with “Why do we do what we do?” before going deeper into your answer with another why question, until you’ve drilled down to the core of your purpose. It generally takes five “why” questions to reach that core.

If you only get one shot at reframing your purpose, then the time required to answer each of the Five Whys is time well spent. Let’s start with the example of a product we have all worn: sneakers. If your company were in the business of producing sneakers, then this might be how you would answer the Five Whys:

• 1. Why do we make sneakers? Because customers want sneakers.
• 2. Why do customers want sneakers? For their athletic activities.
• 3. Why do people engage in athletic activities? To compete and improve.
• 4. Why do people want to compete and improve? To be their personal best.
• 5. Why do people want to be their personal best? To feel good and inspire others.

Now, the purpose of this exercise is to unlock those market adjacencies we discussed in the previous rules. If you are going to set your sights on growth beyond your current core business, the Five Whys is the methodology for how to focus your organization on markets that are truly adjacent versus those that are just wishful thinking.

If you were to overlay that adjacent-market view onto the sneaker example above you would produce a market map, such as the one shown in Figure 9.3.

In line with this example, Nike’s mission is “To bring innovation and inspiration to every athlete in the world.” That broad purpose validates efforts by every Nike organization to innovate new business models far afield from sneakers and apparel. Examples include training services, fitness tracking devices, online gaming, nutrition counseling, athletic performance benchmarks, and innovative subscription business models (such as Peloton’s).

Waze, the wildly popular traffic navigation application with over 65 million users in 185 countries, provides another example. If you ask the executives at Waze what the company’s purpose is, you will find that it is not providing better traffic data. Waze is in service to giving people time back in their lives. It even celebrates how well it is doing—roughly 60 hours per year per customer. By framing its purpose so broadly, Waze is willing to explore additional services that can give customers back more time every day. Current examples include dynamically adjusting suggested routes based on customers’ shopping lists and anticipating mealtimes to know when and where to preorder takeout food during a road trip.

Can you answer the Five Whys for your team, division, business unit, or whole company? Would your peers come up with similar answers? Take the time to find out.

Embrace Smart Cannibalization

When it comes to Big I disruptive innovation, most established companies are on the wrong end of the transition, on the road to becoming the disrupted instead of the disruptor. The paralyzing fear of cannibalizing their current profitable businesses is the single greatest risk they face in the digital age.

By now you know the lessons of what not to do by heart. Kodak invented the digital camera but chose not to commercialize it to protect film margins. Blockbuster lost out to Netflix by protecting the excess margins that came from late fees. Both went bankrupt.

Even when the fear of cannibalizing core businesses was not terminal, it delayed the success that established companies could have had sooner. Examples include Dell turning down an early chance to acquire Apple, Microsoft missing the opportunity to buy Google, and both Lockheed and Boeing underestimating the impact of the Predator drone on their core franchises.

Engage the Next Generation

Today’s 140 million so-called digital natives—the millennials and Gen Z’ers—represent 25% of the workforce and nearly $2 trillion of buying power. These are your future employees, and if your company is consumer facing, your future customers.

Digital natives are always connected and deeply mission driven. They are highly influenced by the social graph and exhibit a swarm-like behavior that multiplies their influence based on the relative size of their personal networks.

Digital natives use social networks to highlight major issues in the world around them but also believe that they have the power to address them. They are not afraid to speak up if they see something wrong with the status quo, particularly when their online networks affirm their opinions and reward their outspokenness.

This next generation tends to expect business leaders to weigh in on important issues, such as immigration, sexual harassment, racial discrimination, and climate change. They yearn to be part of efforts that make our world more inclusive, accepting, socially aware, and environmentally responsible. They hold themselves, their friends, and their employers accountable to these end goals.

Digital natives are at risk of painting all established companies with the same brush: being interested in profits at the expense of their employees and the planet. They don’t see why it’s so hard for companies to be both fiscally and socially responsible. They wonder why there are not more companies like Patagonia, which is helping to prevent deforestation; Warby Parker, which is helping to improve global eye care; and IKEA, which is actively hiring for diversity. In their eyes, it should be the standard for successful organizations to try to give back more than they take.

Reframe your purpose with digital natives in mind. They are the future and you want your updated mission and vision to stand the test of time. Digital natives think money is something you should earn if you do things that matter. Focus your purpose on why you matter to the world and digital natives will be flocking to your door to join the cause.

One way to achieve this is to express your reframed purpose in terms of your triple bottom line—that is, your social, environmental, and financial measures of success. Dow Jones even has its Sustainability Index, which measures how companies perform on this holistic set of measures.

Unilever, Patagonia, and Nestlé are excellent examples of this triple-bottom-line approach. Unilever is specifically developing products tailored to meet the needs of impoverished, developing parts of the world while preventing harm to our environment. Patagonia is extending the reach of its apparel brand with digital natives by promoting the recycling of clothing, equal access to opportunities, and sustainable manufacturing in an industry notorious for poor working conditions and damage to the environment. Nestlé is promoting water accessibility and sustainable food products for everyone on the planet.

Test your reframed purpose out with your kids and their friends. Make sure it passes the smell test for going beyond platitudes and committing your company to the triple bottom line, not a single one.

Align Top Down

Your reframed purpose will not mean much unless you can align your company, from the board level to the frontline staff. Bold statements of purpose open up the confidence to innovate, energize your employee base, and attract new customers, partners, and talent. However, by their nature, bold visions and missions stir up emotions and discomfort.

Carefully consider how to gain the top-down support and alignment needed to fully unleash the power of your new two-speed organization. Focus on the stakeholders who are listed next, in the order presented.

Lead by Example

In order for your troops to line up and march into the midst of digital competition, they will rightly expect your CEO and other leaders to be out in front leading the charge. These times of uncertainty will make your employees value leaders that walk the talk more than ever.

Future leaders must live their lives in a way that reflects the future purpose of the company. The days of your personal life staying separate from your professional one are long past. Leaders must be all in on your reframed purpose. Mary Barra is a great example of this, as she personally is leading the charge on GM’s zero-zero-zero mandate—zero crashes, zero emissions, and zero congestion.

Achieving bold statements of purpose demands humility alongside the confidence. That is the only way for leaders to take the long view when not everything goes right. Former United Technologies CEO George David had it right when he said, “You’re going to be humbled by this job if you’re in it long enough. Remember, it’s about the company, not you—companies live for centuries and you’re only a steward for 10 to 15 years.” Henry Ford touched on a similar theme with “Obstacles are those frightful things you see when you take your eyes off your goal.”

The most authentic leaders live their lives by a personal code that parallels and amplifies their companies’ purpose. Crafting a personal statement of purpose is one of the most difficult things you will ever do. It needs to marry your unique talents, or superpowers, with the cause you feel emotionally in service to: that is, the one you would pursue even if you were not paid to do so.

Aristotle said, “Where your talents and the needs of the world cross, therein lies your vocation.” In short, your legacy will be the results of applying what you are good at to the unmet needs of the world around you. Your personal statement of purpose will become a magnet for you to inspire and attract others to your cause.

As Bill and Melinda Gates have shown with their commitment to solving vexing humanitarian challenges, a personal statement of purpose crisply defined and well communicated can have truly global impact. Leaders that live by their own triple bottom line will be in great demand to run companies pursuing Goliath’s Revenge.

Discovery Reframes Its Purpose¹

Flying below the radar in South Africa, a radically new kind of insurance company has emerged, which is harnessing digital disruption and empowering end users to redefine what insurance companies do.

Adrian Gore does not fit the profile of a typical big company CEO. When he founded Discovery in 1992, South Africa had undergone a historic transformation from apartheid to a democratic system. This presented unique challenges in assessing the health risks of the newly integrated population. For example, there was just not enough historic data about the incidence of injury and disease by demographic segment to accurately price the insurance that Discovery would be underwriting.

Rather than cling to the old health insurance model of getting paid to manage risk, Gore turned the model on its head. He reframed the purpose of an insurance company to making members healthier and improving their lives.

Gore and his leadership team signaled to customers that they needed to be partners in managing their own health. In parallel, Discovery undertook a Big I disruption of epic proportions—reinventing the health insurance industry. Industry peers thought Gore was crazy. “Why mess with an industry business model that had served us all so well?” was a common refrain.

But not Alan Pollard. One of the first leaders Gore recruited to his cause, Pollard immediately realized the significance of Discovery’s bold vision. By 1997, Gore, Pollard, and a tight-knit team of committed designers and developers came up with Vitality, a breakthrough insurance product that incentivized policyholders to live healthier lifestyles.

Pollard and team knew that lifestyle behaviors such as cigarette smoking, poor nutrition choices, and lack of physical activity were directly linked to the chronic diseases (such as diabetes) that cause over 50% of premature deaths. However, they were not naïve. They recognized that getting people to change deeply ingrained lifestyle habits is an incredibly challenging task.

Discovery engaged some of the world’s top experts on what it takes to drive significant behavior change. It tapped into the emerging science of behavioral economics to devise Vitality’s first-of-its-kind points-and-status rewards system for healthy activity. It went beyond health insurance to link its healthy-lives reward system to life insurance as well.

Vitality provided members with points for healthy activities (such as going to the gym) as well as discounts for purchasing healthy food options. It took off like wildfire with members, who were surprised and delighted that their insurance company would actually invest in their health.

The platform scaled rapidly to over 70,000 gym visits per day and hundreds of millions of healthy food purchases. This provided Vitality with a powerful first-mover advantage based on wellness data across large populations.

Discovery was on its way to the perpetual algorithmic advantage covered back in Chapter 3. It continued to refine the Vitality behavior-change model to maximize the healthiness of its covered population at minimum cost.

The rise of smartphones, wearable sensors, and health-related apps followed about a decade later. Vitality remained at the forefront of innovation, successfully integrating those emerging technologies into its program and furthering its reach, simplicity, and appeal.

In fact, Discovery became one of the first wellness companies to partner with Apple and utilize the breakthrough health-related innovations in the Apple Watch. Through the Vitality program, members are now able to purchase an Apple Watch with just a small up-front payment. They can then pay off the balance on their Apple Watch over the following 24 months by meeting specific physical activity targets communicated on the Watch or by using cash. This healthy lives barter has proved to be a step-change customer outcome with increased physical activity levels for over 60% of the members. A major win for Discovery, Apple, and the members themselves.

Discovery’s reframed purpose did not stop with its core market of South Africa. The Vitality platform made possible international expansion. Discovery now participates in the most attractive global insurance markets in the world, through John Hancock in the United States, Manulife in Canada, Generali in Europe, AIA Group in Asia, and Ping An Insurance in China. These relationships, in turn, push more data into the Vitality platform to power the next leg of innovation.

In the United Kingdom, Vitality became the first life insurer whose premiums were adjusted based upon the healthy lifestyle choices of its members. Michael Porter of Harvard Business School cited Vitality as a shining example of a shared-value product: one for which both creator and user share in the risk and benefits of the disruptive solution.

Vitality is now providing a beachhead for Discovery to grow into additional insurance segments, such as automobile insurance. In that market, Vitality is helping users improve their so-called driving DNA to become safer drivers. Once again, Discovery’s broad and compelling corporate purpose opened up an opportunity to grow. It partnered with two MIT professors with expertise in telematics to leverage its shared-value business model to launch a successful behavior-based auto insurance offering.

Gore challenged the established insurance industry mindset that getting users to change their behavior was just too hard. He reframed the purpose of insurance from managing risk to enabling healthy and safer lives. Gore led by example. He took the professional risk of publicly announcing Discovery’s big innovation goals, creating a healthy pressure on his team to deliver on the company’s Big I innovations.

Rule 6: Company and Career Readiness

What aspects of the Discovery case example can you put to work in your organization? Let’s find out as you complete your company and career self-assessments for Rule 6: Reframe your purpose.

Company Readiness Self-Assessment

To complete your company readiness self-assessment, take the time to understand the calibration of minimal, limited, moderate, advanced, and world-class capabilities across each row in Figure 9.4.

Now, assess your company’s demonstrated level of capability on each row9.4. Try to think about your company as a whole, at least in this first pass. If you want to also assess just your team, group, or division, you can come back later and repeat the exercise.

Career Readiness Self-Assessment

Narrow your aperture from your company to your career. What steps are you taking to reframe your personal sense of purpose? Mark your self-assessments on the grid shown in Figure 9.5.

Rule 6 Readiness Summary

Now that you’ve completed your company and career self-assessments for this final rule, you can fill in your readiness summary in Figure 9.6. If you are doing your self-assessments online at www.goliathsrevenge.com, skip this step, as it will be completed automatically.

You’ve completed all six of the new rules that define success in pursuing Goliath’s Revenge. It is time to bring it all together into an action plan for your company in Chapter 10 and for your career in Chapter 11.