What purpose is, and isn’t

We’ve always believed that companies are an absolute necessity for individuals and society to progress. But they need to contribute more than they take away, and to do that they need to be clear about their purpose. A corporate purpose is a company’s raison d’être: it is the answer to why your business exists today and why it will prosper.

A common misunderstanding is that purpose is only about the societal role of your company. But it should also embody the lasting value that you provide to customers. It’s when a business manages to play a value-adding role in customers’ lives tomorrow, that it secures future relevance and growth.

Your purpose cannot be a side activity; it should be at the core of your business, guiding your business strategy. In times of dramatic change, your purpose is a beacon that guides you when prioritizing and making decisions. It guarantees that you don’t stray from a mutually rewarding customer relationship, while still helping to solve societal challenges.

Purpose should clearly define how your business contributes to people, planet, and society beyond profit. The reward is increased value-creation for shareholders and a solid foundation for employee engagement. This study shows a strong correlation between purpose and brand preference, for example.

Purpose is often confused with CSR, and that risks reducing purpose-driven strategies to something that's detached from the business. If you fail to connect your purpose with your core business, you miss out on the impact it has on both commercial and societal development. Johan Ekelin, Co-founder and Partner at Lynxeye