How Business Leaders Build Purpose-Led Companies
Companies are abandoning traditional profit-first business models and focusing on mission-driven leadership and purpose-driven business. As a result, there is a noticeable shift in the global business market from concentrating on innovative products and services to prioritizing customer experiences and values. Customers want to interact with companies that use their power, influence, and profits to improve the environment, communities, and quality of life for populations worldwide.
Consumers are four times more likely to use a brand's products and services if the company focuses on having a purpose and making a difference. Interestingly, many large companies that generate impressive profits operate with a clear purpose-led strategy, from Airbnb and Meta to Amazon and Google. Learn more about the benefits of leading with purpose, examples of today's top purpose-led organizations, and how business leaders can learn and apply mission-driven leadership.
The Benefits of Purpose-Led Organizations
The annual "Strength of Purpose" study surveyed more than 8,000 consumers and 75 brands across eight global markets in four different languages to determine if consumers prefer purpose-led organizations. In this study, researchers discovered that companies and brands that demonstrate purpose-driven business are:
- Four times more likely to purchase products or services from the brand
- Six times more likely to stand behind the brand during challenging times
- Four and a half times more likely to recommend the brand to others
- Four times more likely to trust the brand
This study is considered ground-breaking because it is the first of its kind to prove that a company's purpose is positively correlated with a strong brand reputation, customer loyalty, and favourable financial returns. In addition, the demand for purpose-led organizations underscores the need for mission-driven leadership. Leaders are integral to crafting a company mission statement, outlining core values, and connecting products and services, operations, and teams to the overarching purpose.
Examples of Purpose-Driven Businesses
Every year, the marketing and advertising agency StrawberryFrog partners with the data company Dynata to survey the top 100 purpose-driven companies. The companies surveyed more than 200 companies across over 50 industries to measure the following:
- The company demonstrates a commitment to a purpose beyond profit
- The company is actively improving lives
- The company looks beyond shareholder priorities and is helping create a better society and world
Although the purpose index recognized 100 companies, familiar organizations were topping the list, including Seventh Generation, Toms, Zoom, Allbirds, and Abbvie. Seventh Generation placed first for the second year in a row. The eco-friendly cleaning company transparently outlines its impact, including reducing fossil fuel-sourced energy, using sustainable agriculture products and zero-waste packaging, and releasing an annual corporate consciousness report.
Like the second-ranked cleaning company, Toms is committed to making a difference through purpose, people, and the planet. Toms invests one-third of its profits towards grassroots causes through grants and partnerships. Additionally, Toms is funding access to mental health resources, ending gun violence, reducing environmental harm, and committing to becoming an anti-racist organization.
The third top-ranked purpose-led company is the software company Zoom Video Communications. Zoom's mission statement is "we deliver happiness," and they do so through their customers, teams, and community. Amid the pandemic, Zoom helped millions of employees shift to hybrid and remote work models. The platform revolutionized virtual connection and the future of work.
These businesses demonstrate a company mission that drives organizational goals beyond profit. Whether the company focuses on the environment or bettering youth's mental health, the most successful organizations prioritize a greater purpose over their financial returns.
What is Mission-Driven Leadership?
Mission-driven leaders prioritize values and purpose in their business decisions and strategy. According to Forbes, mission-driven leaders exhibit five core behaviours; they look at the big picture, avoid abstraction, make ethical decisions, surround themselves with like-minded leaders, and repeatedly discuss their values and purpose. Without purpose-led leaders, organizations would prioritize the bottom line and short-term gains to hit financial objectives. As a result, ethical leaders must direct organizations to pursue a greater good to affect sustainable impact.
Leaders can also infuse their teams and coworkers with a sense of purpose. Studies show that 79% of employees quit due to a lack of appreciation, whereas supportive leadership correlates with a 40% increase in employee effort. Leaders who regularly discuss their purpose and values encourage employees to understand the company's vision and connect their work responsibilities to a worthwhile cause.
How to Build a Purpose-Led Organization
How can organizational leaders move beyond boardroom discussions and execute purpose through business processes? Deloitte outlined a five-step process to roll out a purpose-led business strategy and instruct leaders on how to enact sustained impact. According to the international consulting company, mission-led leadership starts with the following steps:
- Identify how your business can provide value. Conduct research among stakeholders, partners, and consumers to determine how the organization can make an impact and create meaningful benefits for a specific cause or mission.
- Choose a specific organizational focus. After surveying and researching sources of value, organizational leaders must align their business capabilities with desired outcomes, from environmental impact to human rights initiatives. The company mission can be directly related to the organization's sector or a broader cause.
- Create a purpose-led business strategy. A strategy should include the company's mission, values, objectives, stages, timeline, and how results will be measured. In addition, the strategy should present a connective story to explain to consumers, stakeholders, and employees who you are and what you stand for as a business.
- Measure and report environmental, social, and governance (ESG) impact. Consumers and stakeholders appreciate transparent companies that report their progress. Therefore, leaders must use qualitative and quantitative metrics to regularly track, measure, and report outcomes. Additionally, leaders can use these figures to reconfigure future business strategies to achieve their goals effectively.
- Constantly improve performance and efficiency. Leaders should always be open to feedback and revisit results to improve continuously. Launching an organizational purpose and measuring impact may involve a trial-and-error approach.
Deloitte's Purpose-Driven Strategy Framework
Develop Purpose-Led Leadership Skills in Aston University's Online DBA Program
Aston University offers students from around the world an Executive Doctor of Business Administration (DBA) for business leaders who seek to build skills and deliver real-world impact. Aston University's Executive DBA allows students to choose a focused research project that will solve pressing business problems. The part-time distance learning course can be completed in four to six years, and the Research Methods Course (RMC) portion of the course pairs students with expert staff in management research who guide doctoral students through their comprehensive projects.
Overall, graduates from Aston's DBA leave the program as professional researchers with hands-on business skills and a final research proposal and report that can be used throughout their careers. If you're passionate about building a purpose-led organization and executing a value-driven business strategy, you can earn your DBA while finding the answers to your unresolved questions. The Executive DBA is an opportunity to work part-time while developing as a leader in today's complex business world.
Learn more about Aston University's Executive Doctor of Business Administration (DBA).