What it means to be Purpose Driven

Framing the purpose of a company as beyond making profits for shareholders alone is age-old, but the move to state corporate purpose explicitly is newer. Stating purpose is part of a deeper transformation of a growing number of companies–from being product-driven to becoming purpose-driven. 

Being explicit about purpose is part of an emerging approach to corporate sustainability which is being promoted by investors and, in some cases, even required by regulators. But being purpose-driven is not simply compliance (though it includes that), nor vague good intention expressed in a purpose statement. Being purpose-driven means aligning governance, strategy, and organizational culture; and setting metrics to measure success. This takes an intentional investment of time and resources. 

But the return on that investment can and should be measured; and there are good reasons to believe that it will be positive. This is because the benefits of being purpose-driven flow through two channels: 

• A finance channel where investors and increasingly also lenders will assess the extent to which clarity of purpose promotes sustainability; and 

• An employee channel where purpose-driven companies are better able to retain staff and attract new talent, while potentially improving general productivity.