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Bringing purpose to life

A purpose fit to lead strategy

The purpose of a business is the north star which guides the business, its strategy and inspires those who work in, and with, the organisation. It is the key to ensuring that the business is better tomorrow than it was today, better still in a years’ time and even better in five years’ time. 

Purpose connects what the business believes, says and what it actually does, providing the strategic direction for the business and enabling people to make decisions about what they do, using the purpose as a reference point. For purpose to be authentic there needs to be a clear connection between the purpose, the strategy, the outcomes and the impacts of the strategy.

If a company’s purpose (why it exists and supporting narrative – commonly defined in a purpose statement) is too broad, then almost any strategy can be consistent with it. A  purpose that is too broad also avoids the reality of trade-offs, making purpose-led decision-making in complex dilemmas near impossible.

To lead strategy a company’s purpose must be practical and authentic:

  • To be practical – it needs to be sufficiently specific to enable a decision to be made by reference to the purpose, for example about what products and services are produced, what the company might stop or start doing, or what assets are acquired, retained, or disposed of
  • To be authentic – it needs to be grounded in what the business actually does, and aspires to do

In developing and articulating the company’s purpose, we recommend taking an iterative approach, central to which is testing how a suggested purpose statement may guide difficult strategic decisions in complex scenarios. This also helps road test the leadership and board commitment to being purpose-led.

For more on this see our courses on:

A good purpose is not just about the existing business, but also the future:

It inspires long term strategic commitment, investment and radical innovation, creating opportunities and markets that didn’t exist previously. It’s the answer to the question: How is the world a better place by your company being successful? The best articulation of a company’s purpose acts as a north star for strategy, stretching the company to always generate value for society.

In this HBR article Putting Your Corporate Purpose to Work, Hubert Joly former CEO of from Best Buy discusses how a company can make purpose the cornerstone of strategy through reviewing what the company offers in light of that purpose – thinking about what it should stop, evolve, start and continue including exploring new products/services, expanding into new markets, or realigning how customers are served, as illustrated in the following matrix:

H Joly
H Joly

The role of the Board

In a purpose-led company, the role of the Board is to be the collective trustees of the company’s purpose. Any board discussion, review and sign-off of strategy ought to be anchored to the company’s purpose with a shared understanding of what it means to be purpose-led. It is also worth reviewing how subcommittees of the board contribute to strategy development and value creation, and not solely concerned with remuneration, risk and nomination (a legacy of the exclusive focus on shareholder returns). Governance and the role of the Board is further explored in: Governance