A purpose can be well written, well researched and genuinely resonant, and still make very little difference to how a company runs. Having a strong purpose and being a purpose-driven organisation are two separate things.
In an earlier article, How a strong corporate purpose is really built, I described five characteristics of a strong purpose: grounded in real human insight, authentic inside-out, resonant outside-in, able to inspire and guide initiatives, and activated with discipline. That leaves the obvious follow-up question:
What would we actually see in an organisation if purpose were truly driving it?
I have worked inside organisations where purpose gave people real direction, and in others where it barely registered. I have also spent a good part of my career helping companies translate purpose into strategy, behaviour and management routines. Over time I have settled on one test:
Does purpose change what people notice, choose and do?
If the answer is no, what you have is a purpose statement, however good it is.
What I mean by purpose
Purpose has meant different things to different people over the years, and some of the confusion around it comes from that. The definition I use comes from working with Frank van den Driest, co-author with Marc de Swaan Arons of The Global Brand CEO and now at the Institute for Real Growth: purpose is the meaningful positive impact a company has on the lives of its customers and the world they live in.
That keeps the customer at the centre. Saving the planet or tackling a societal issue can be part of a company's purpose, when that is genuinely where it makes a difference. For most companies the starting point is closer to home: what progress do we help our customers make, and what would be missing from their lives without us?
Inspired, enabled, satisfied
I find it helpful to organise what follows around a simple human arc, loosely borrowed from Simon Sinek. People wake up inspired by the contribution they can make. They come to work in an environment that lets them do good work and use their judgement. And they go home satisfied because the work mattered.
Six characteristics follow from that arc.
A. Wake up inspired
1. Impact is vivid and authentic
Purpose becomes real through stories. The wording matters much less.
In a purpose-driven organisation, people can tell you real stories of progress and friction: a customer, client or other stakeholder was trying to get somewhere, something stood in the way, and the organisation helped.
These stories can differ enormously, and they should. A broad purpose ought to come alive differently across countries, customer groups and business lines, while still pointing back to a recognisable theme. Johnnie Walker's 'Keep Walking' is a good example. The underlying idea of making progress despite headwinds stays constant, but what it means in Thailand, and how it shows up in the advertising there, is very different from China.
What matters is that the impact is specific. What was the person trying to achieve? What made it hard? What changed because we were involved?
Stories like these make visible what usually sits unspoken behind customer decisions. They also reach people emotionally in a way a purpose statement on a slide rarely does. When we introduced a new brand purpose for a fashion company in China, we collected stories about customers and what fashion had done for their lives, including the uncertainties that came with it. They hung all over the building and went out in printed booklets for people to share.
Can people tell stories worth sharing about someone trying to make progress, what stood in their way, and how the organisation helped?
2. Impact resonates externally
Purpose has to work outside-in as well as inside-out. It should connect to something customers, clients and other stakeholders actually care about. If it doesn't, the organisation may be congratulating itself on an impact the outside world never notices or doesn't value.
This gives you a useful mirror:
What we believe we enable ↔ what customers and society experience and value
The gaps between the two are often more instructive than the areas of agreement. Employees may believe a process protects customers while customers experience it as rigid. The company may believe it gives people independence while customers still feel dependent on it.
Does the progress we believe we enable match the progress customers and stakeholders actually experience and value?
B. Do great work in an enabling environment
3. Strategy and transformation follow purpose
Purpose should shape strategy. When it sits alongside strategy on a separate slide, it rarely does much.
It works as a filter:
- Which initiatives fit?
- Which don't?
- What deserves disproportionate investment?
- What should we stop?
- What transformations do we need to keep delivering on the purpose?
At IKEA, the idea of creating a better everyday life for the many people ties directly into a strategic logic around affordability: lower prices bring in more customers and volume, volume brings down costs, and lower costs create room to cut prices again. A company-wide transformation programme we launched there only gained traction once we showed people where the chain from purpose to strategy had broken. That touched both head and heart. People signed up, and the programme overdelivered.
The specific mechanism will differ from company to company. What counts is the coherence between why the company exists and how it chooses to compete and change.
A purpose-driven organisation should therefore be able to point to things it started because of its purpose, and also to things it stopped or deprioritised because they no longer served the progress it exists to enable.
Can we name important strategic choices and transformations that turned out materially different because of purpose?
4. Purpose guides judgement
Purpose earns its keep when reality gets messy.
Most hard choices in organisations involve two legitimate objectives pulling against each other: customer relevance and prudence, speed and care, local freedom and global consistency, commercial performance and long-term customer value.
When these tensions stay implicit, people get caught between competing expectations. One manager rewards one pole, another manager or KPI rewards the other, and execution slows down.
Purpose and values should help people through these situations. Listing which values matter is the easy part. Leaders also need to show what those values look like when they collide.
When two legitimate demands pull in different directions, how do purpose, values and leadership examples help people make a better decision?
The aim is to find ways for the two demands to strengthen each other, which is a much higher bar than splitting the difference.
5. Purpose directs innovation and priorities
A good purpose produces ideas. A great one produces many ideas that converge.
A statement that inspires people to brainstorm anything at all gives them energy without direction. Purpose should help teams recognise which ideas belong and which don't.
One practical way to test this is to build purpose into the planning process and ask every team three questions: What should we Start? What should we Stop? What should we Accelerate?
This shouldn't be limited to Marketing, Product or Innovation. If purpose really gives direction, Finance, HR, Operations and Technology should all be able to explain what they would do differently because of it.
Does purpose generate useful new ideas and help teams decide what to Start, Stop and Accelerate?
To activate purpose, I use a sequence I learned from Frank van den Driest: Inspire → Clarify → Focus → Commit → Build. Inspire people through real impact stories. Clarify what the purpose actually means, and which of the company's past and present actions fit it. Focus by choosing what to do and what to leave. Then commit to observable changes and build the capabilities needed to deliver them.
C. Go home satisfied, having contributed
6. Purpose releases contribution and wider impact
Purpose should draw out more than contractual effort. People bring ideas, judgement, challenge and initiative because they care how things turn out, and much of that falls outside any job description.
Nobody needs to be thinking about work all evening. The point is to create conditions in which people choose to bring their discretionary contribution over and above the task in front of them.
There is a wider societal side to this as well. Purpose-driven organisations can use their underlying cause as the basis for visible giving back. Dulux, for example, has run community painting projects, from favelas in Brazil to sports canteens in England, to make its idea of Colouring Lives tangible.
Generic philanthropy can be worthwhile too. Purpose-led contribution stands apart because it has a recognisable link to what the company stands for and what it is distinctively equipped to offer.
Does purpose lead people to bring more of their initiative, ideas and energy, and does it inspire visible contributions to society that express the same cause?
What the sceptics get right
Purpose has taken a beating in boardrooms. In his January 2022 letter to investors, Terry Smith of Fundsmith argued that a company which felt it had to define the purpose of Hellmann's mayonnaise had "lost the plot", and that Unilever's management cared more about displaying sustainability credentials than about the fundamentals of the business. Unilever's subsequent leadership stepped back from requiring every brand to carry a purpose, and many executives drew the obvious conclusion: purpose is a distraction from performance.
Much of that criticism is fair. Part of the problem is definitional. A lot of the purpose work that drew fire was framed around large societal causes with only a thin connection to the product or the customer. By the definition I use, the first question is always what positive difference the company makes in its customers' lives. A purpose added to a brand as a communications exercise, with no bearing on what the company chooses, funds or stops, deserves the scepticism. It would fail every test in this article.
Where I part company with the sceptics is the conclusion they draw. The cases they cite show what happens when purpose sits on top of the business and never reaches the decisions underneath it. That is the conversion problem the rest of this article is about. For a board, the useful question is narrower than "purpose, yes or no?" Is purpose doing any work in the choices we actually make? If it isn't and can't, scaling it back is a reasonable call. If it could, the job is to find where the conversion breaks.
Purpose gives direction. Adaptability converts it.
Even with all six characteristics in place, performance isn't guaranteed. Another piece of the puzzle matters here.
Purpose tells an organisation what progress it exists to enable. A purpose-driven organisation makes that progress visible in stories, strategy, judgement, innovation, societal contribution and employee energy. Adaptability determines whether the organisation can keep delivering on that purpose as customers, technology, regulation and society change.
This distinction has become increasingly important in our work. You can have people who care deeply about customers, who see exactly what is changing, and who even have good ideas about what to do. And still nothing moves. In that situation the problem often lies somewhere other than purpose.
In the Adaptability Audit™, we look at six organisational conditions that determine whether insight turns into action and sustained performance:
- ENERGY & Contribution: Will people bring their full contribution?
- TRUTH & Sensing: Can the organisation see what is really happening?
- AGENCY & Empowerment: Can people act on what they know?
- CHOICE & Resource Allocation: Does the organisation turn insight into good choices?
- EMBEDDING & Execution: Do good decisions become sustained change?
- RENEWAL: Can the organisation let go and change again?
Purpose supplies meaning and direction. These conditions decide whether that direction survives contact with organisational reality.
Where does the conversion break?
That leads to a practical diagnostic question:
If people understand the purpose and care about the outcome, where does the conversion into performance break?
Four gaps come up again and again. They are examples; your organisation may well have others.
1. Signal loss
Customer and frontline reality exists, but it doesn't reliably reach the places where propositions, policies and strategic choices are made. The people closest to the customer often already know what's wrong, so more research won't necessarily help. The real question is whether uncomfortable information travels, and whether anyone pays attention when it arrives.
2. Permission gap
People know what a better outcome would look like but lack the authority or practical room to act. Rules, approvals, escalation requirements or unclear decision rights make good judgement impossible to exercise.
3. Choice distortion
The right insight reaches the organisation, but the machinery for making choices produces a different result. Targets, KPIs, incentives, budgets or short-term pressure make behaviour rational that contradicts the stated purpose.
4. System snap-back
A good decision gets made, and then the surrounding system recreates the old behaviour. The strategy changes; the process stays the same. The KPI remains. The same approval is still required. The old meeting rhythm carries on. People are asked to work differently inside a system built to produce yesterday's behaviour.
Renewal adds one more question:
Can the organisation actually stop what no longer works, or does it keep layering new priorities on top of old ones?
Diagnose before prescribing
The same visible symptom can call for completely different interventions.
If people can't describe the impact the company exists to create, stronger purpose stories and activation may be the answer. If they see reality but the insight never travels, work on sensing and information flows. If they know what to do but can't act, address decision rights and agency.
If good intentions keep being overridden by targets, look at the management system and resource allocation. If decisions get made but behaviour doesn't stick, change the processes, systems and routines around people. And if old practices keep eating resources, build the discipline to stop, cull and reallocate.
So the distinction I keep coming back to is this:
The purpose-driven lens tells you what appears to be missing. The adaptability lens helps explain why.
Decide what to change only after that.
What purpose-specific interventions can look like
Once you understand the underlying mechanism, purpose interventions can be far more targeted. Depending on the diagnosis, they might include:
- Dilemma Reconciliation and Value-to-Behaviour sessions, where competing legitimate demands keep getting in the way of execution. Teams name the tensions they face, explore how both sides can strengthen each other, and translate the reconciliation into explicit desired and undesired behaviours.
- Leadership workshops to agree the changes needed in the management system: decision rights, targets, incentives, meeting routines, processes, or whatever else is currently working against the purpose.
- Purpose-led Start / Stop / Accelerate sessions, in which teams turn purpose into their own priorities: what to begin, what to stop, and what deserves more attention and resources.
- A Purpose Story System that keeps capturing and sharing real stories of customer, client or societal progress, including the friction that had to be overcome and the part the organisation played.
- Closer integration of internal and external communication, so that customer-impact stories, brand expression and purpose all reinforce the same idea.
- Purpose-linked societal initiatives that use the organisation's capabilities and cause to make its purpose tangible beyond the customer transaction.
Generic purpose activation rarely pays off. Put the effort where the conversion from purpose to performance is actually breaking down.
A final reflection
The test I started with still holds: a company is purpose-driven when purpose changes what people notice, choose and do. You hear it in the stories people tell. You see it in which strategies get funded, how hard calls are made, which ideas get stopped, how much energy people bring, and how the company shows up beyond the transaction.
Even then, purpose needs an adaptable organisation around it. Purpose can point the right way while the organisation stops people from moving. Fixing that second part is where most of the performance sits.