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NORTH & NEAR STAR

The North Star represents an organization’s ultimate purpose, extending beyond profits to reflect the desired state for the wider system it operates within. It should inspire, unify, and guide employees, aligning their day-to-day efforts with the company’s higher mission. The North Star should:

  • Reflect the organization’s value through its products and services
  • Inspire employees with a goal beyond profits
  • Motivate and center employees’ day-to-day, yet remain aspirational throughout their careers
  • Be specific enough to connect with, yet abstract enough to include everyone’s efforts

The Near Star is a shorter or near-term goal tied to a specific innovation project. While the North Star remains steady, the Near Star can change and evolve – especially as projects reach maturation. Each Near Star moves the organization closer to its North Star and helps track progress.

More than Mission Statements

Unlike mission or vision statements, the North Star goes beyond defining the organization’s identity. It bridges the gap between corporate goals and world needs, aligning business actions with societal and environmental responsibility (Freeman, 1983; Mayer, 2021) while demonstrating how the organization is embedded within a larger system (Walsh et al., 2006).

Can the North Star Change?

The North Star of an organization should remain relatively constant, as it brings coherence and stability to the organization’s agenda. However, this does not mean it is unchangeable. The North Star can shift if the surrounding environment changes dramatically or if the organization’s desired future evolves. Such changes do not happen frequently, but may arise due to cultural shifts, changing societal needs, or abrupt shocks and disruptions, such as the COVID-19 pandemic.

Why is the North Star Important in Systems Innovation?

During extreme uncertainty, firms often narrow their focus, becoming more egocentric and short-sighted as a way to feel in control. However, this can exacerbate crises, as executives need a broad perspective to navigate complex systems. The North Star helps firms combat this limited perspective.

In addition to creating a sense of unity and direction for employees, research by Innovation North team members (Lee et al., 2023) outlines three other specific benefits of a North Star:

  1. It exposes new insights that are often hidden from view. Organizations often overlook issues like climate change because they lack a broad enough perspective to match its scale and pace. A clear purpose extends a firm’s view spatially and temporally, enabling it to identify and address large, systemic issues.
  2. It helps firms filter information. In uncertain environments, organizations are inundated with data. A corporate purpose helps organizations sift through noise and prioritize relevant information, preventing them from being overwhelmed by complexity.
  3. It sustains focus. In times of extreme uncertainty, corporations can lose focus by chasing new trends or opportunities. A clear purpose helps maintain focus and consistency.

References

Further Reading: Near & North Star

Further Reading: More than Mission Statements

Further Reading: Can the North Star Change?

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