What is ‘purpose’ when used as a business term and why does it matter? Put simply, it means the goals companies set themselves beyond making money. As to why it matters, purpose is the driving force behind any successful business according to a recent study from marketing and communications agency Radley Yeldar (RY). The agency selected 10 of the top 30 ranking companies from its 2016 Fit for Purpose Index including AstraZeneca, BT, Deloitte, ING, Pearson, Phillips Lighting, RB, Roche, SAP and Syngenta.
In-depth interviews with senior employees of these companies looked at how purpose has made a difference to their organisation, stakeholders and employees.
Discussing how purpose has become a buzzword in comms and expanding on what it means, Paulina Lezama, head of brand strategy at RY says: “Over the last three to five years purpose has become the ‘it’ word in all areas of communication – with an eruption of conversations on the role it plays in areas ranging from brand to advertising, to employee engagement, to sustainability…But what do we mean by purpose? We think of it as the mindset or intention of a company to use its unique position, resources and capabilities to deliver on something that matters to individuals, society or the planet.
“Essentially, stating that the company exists to do more than just make money.”
Lezama says that as it is so integral for success, it is surprising how many businesses do not focus on purpose: “There are hundreds of companies out there who put their shareholders first. Don’t get us wrong, we believe profits are equally as important as purpose. But you don’t need to choose one over the other. Purpose-led organisations still put the interests of all their stakeholders at the fore – from providing employees with meaningful work (a reason to come to work beyond a pay check) to contributing to a better planet, which benefits everyone.
“It’s not a mindset everyone has, but purpose is far more than just a statement that sits at the top of your door. It’s a way of working that allows the company to do good just by doing business.”
Below are ten most common myths about purpose according to the study.
Purpose myths
Myth 1: Purpose is a short-term marketing fad
Myth 2: Purpose is something you’re born with, you cannot become purposeful
Myth 3: Purpose is not a CEO’s job
Myth 4: Purpose is not just for millennials
Myth 5: Purpose is a one-off internal campaign
Myth 6: Purpose can’t be measured
Myth 7: Purpose is only for worthy businesses
Myth 8: Purpose trumps profit
Myth 9: Purpose is the new greenwash
Myth 10: Purpose is just another word for CSR
Overall, the interviewees made it clear that purpose should be factored into every decision, present in every team, and become the reason people believe in a brand.
Lezama concludes: “Purpose is on the rise, and it’ll be critical for companies to get it right and do it properly from now on.”
Further information
For more information on the qualitative research on how purpose is important to brands
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