Idea in Brief
The Problem
Despite its sudden elevation in corporate life, “purpose” remains a confusing concept. Finding the right one involves identifying an authentic and motivating basis for alignment among key stakeholder groups.
Why It Exists
Purpose is used in three distinct senses: competence, as in “the function that our product serves”; culture, as in “the intent with which we run our business”; and cause, as in “the social good we aspire to.”
The Solution
Not all companies can save the world. Only a minority should put forward a cause-based purpose. For the rest, a functionally useful business or a strong culture can provide the basis for a meaningful and motivating why.
Today’s business leaders are under pressure to come up with a corporate purpose, much as they were challenged to develop vision and mission statements in the 1980s and 1990s. Although this focus on the role of corporations in the economy and broader society has many positive aspects, a risk is that speed, shortcuts, and spin may take precedence over authentic action. Our goal in this article is to help executive leaders be clear-sighted about what they seek to define: the purpose of their purpose.