The Uncomfortable Truth About Corporate Purpose


Many businesses now claim to be purpose-led. Far fewer are aligned with purpose, and some may never be capable of it.

The image accompanying this article is a striking metaphor for the state of corporate purpose today. Two opposing forces pull in opposite directions, with the word ‘purpose’ stretched between them like a rope in a tug of war. That tension captures something many leaders instinctively recognise but rarely articulate. In most organisations, purpose is not absent; it is contested. It exists in a constant struggle between competing priorities, competing incentives and, ultimately, competing beliefs about what business is for.

Over the past decade, purpose has moved from the periphery of corporate conversation to its centre. Boardrooms discuss it. Leadership teams workshop it. Annual reports promote it. Recruitment campaigns lean heavily on it. Almost every major organisation now seems keen to demonstrate that it exists for something more meaningful than the pursuit of profit alone.

This shift is not imaginary, nor is it insignificant. The best available data suggests that the move toward purpose-led business has been underway for several years. In 2020, McKinsey found that 62% of organisations claimed to have a formal purpose statement, yet only 42% believed that purpose meaningfully influenced decisions or outcomes. Given the acceleration in ESG, stakeholder capitalism and governance reform since then, the number of organisations articulating purpose has almost certainly increased. What is far less clear, and far more doubtful, is whether the number genuinely governed by purpose has grown at anything like the same pace.

My own sense, based on more than two decades of working with organisations around the world, is that genuinely purpose-driven organisations remain relatively rare. If the benchmark is not simply having a purpose statement, or even claiming that purpose influences decisions, but being truly aligned and governed by purpose, then the proportion of organisations that currently qualify is probably closer to five to ten percent.

And yet the direction of travel is clear.

Why now? Partly because the world is changing. Trust in institutions has declined. Public frustration with inequality, short-termism and extractive capitalism has grown. Climate risk has moved from abstract concern to lived reality. Populism, polarisation and corporate greed have created a growing sense that something fundamental in the relationship between business and society is broken. Against this backdrop, purpose has emerged as both response and remedy — a recognition that business cannot sustainably prosper in a failing society.

But this is precisely where the first uncomfortable truth appears. Most organisations that adopt purpose never truly align themselves with it.

The reason is simple, though often overlooked: there is a profound difference between ‘having a purpose statement’ and ‘being organised around purpose’.

The former is relatively easy. With sufficient time, budget and facilitation, almost any executive team can craft a purpose statement that sounds inspiring, socially aware and commercially sensible. The latter is considerably harder because it demands change — not in language, but in behaviour.

Purpose only becomes real when it influences difficult decisions. It becomes real when leadership teams must navigate trade-offs between short-term financial performance and long-term value creation. It becomes real when revenue opportunities conflict with stated values. It becomes real when incentive structures need redesigning, governance models need rethinking, and leaders must accept that some profitable activities may no longer be compatible with who they claim to be.

This is why purpose, by itself, changes nothing. What matters is alignment.

Strategy must align with purpose. Culture must align with purpose. Incentives, behaviours, systems, governance and measurement must all align with purpose. Without this alignment, purpose remains little more than carefully managed theatre. Cosmetically attractive to customers, employees and investors perhaps, but largely disconnected from the way the organisation actually functions.

This is the problem with so much corporate purpose today. It often sits above the organisation rather than within it. It inspires presentations while leaving power structures untouched.

A business may declare that it exists to improve customer wellbeing while rewarding employees almost entirely on quarterly sales targets. It may commit to sustainability while continuing to allocate capital toward environmentally destructive activities. It may champion human flourishing while promoting internal cultures built on fear, burnout and aggressive competition. In such circumstances, purpose is not acting as an organising principle. It is acting as decoration.

This brings us to the second, and more uncomfortable truth.

Perhaps the challenge is not always one of execution. Perhaps some businesses are structurally incapable of becoming genuinely purpose-driven.

This is where the debate becomes particularly interesting. A common counterargument is that every organisation has a purpose because every organisation exists to do something. By this logic, purpose is universal. Even criminal enterprises have objectives, intent and direction.

At one level, that argument is correct. But it also renders the concept almost meaningless.

A cartel has purpose. A scam operation has purpose. A weapons trafficker has purpose. If purpose simply means intent, then the word loses all useful distinction. It becomes nothing more than a synonym for objective.

This is precisely why the International Organization for Standardization ISO 37011 – Guidance for the Governance of Organizations by Purpose, due for publication later this year, matters so much. It helps clarify what purpose actually means in a governance context.

Under ISO 37011, purpose is not simply about having an objective or ambition. It is about an organisation’s ‘reason for being’, expressed through the value it creates for stakeholders and society. That distinction is critical because it moves purpose beyond intent and into the realm of legitimacy.

In other words, purpose is not merely about what an organisation seeks to achieve. It is about whether the organisation’s existence creates genuine value beyond shareholder returns. Once viewed through this lens, another uncomfortable truth becomes hard to ignore.

Not every business model is inherently compatible with purpose as a force for societal value creation.

That sentence may unsettle those who believe purpose is universally available to all businesses, but it deserves serious consideration.

Consider industries whose economic models depend heavily on addiction, deception, exploitation or engineered dependency. Tobacco remains the clearest example. A tobacco company can improve governance, reduce emissions, invest in harm reduction products and articulate a sophisticated purpose statement. But if its core economic engine remains dependent on selling addictive products known to damage human health, there is an unavoidable contradiction at the heart of the business model.

The same question increasingly applies to certain parts of the gambling sector, exploitative payday lending, and even aspects of social media whose economics depend on monetising attention through outrage, addiction and division. Likewise, parts of the fossil fuel industry now face a difficult tension. Major oil companies frequently speak of powering a sustainable future, yet in many cases continue allocating the vast majority of capital expenditure toward hydrocarbon extraction. That does not automatically invalidate their intentions, but it does raise a legitimate question — when capital allocation tells a different story from corporate rhetoric, which should we believe?

Usually, the money.

That is not to say such businesses cannot improve. Many can and should become more responsible. Harm can be reduced. Practices can evolve. But becoming more responsible is not necessarily the same as becoming purpose-driven. Unless the underlying economics change, the contradiction often remains.

By contrast, genuinely purpose-driven organisations tend to exhibit something quite different: coherence.

Take Patagonia for example. Whatever one thinks of the brand, there is a clear alignment between what it says and what it does. Its environmental purpose is not confined to marketing language. It is reflected in product design, supply chain choices, activism and governance. When Yvon Chouinard transferred ownership of the company so future profits would support environmental causes, he did something few leaders are willing to do. He aligned governance with purpose. That is the real test that Patagonia can credibly claim to have passed. The company is not perfect—no business is—but it demonstrates something rare: coherence.

Critically, this is also why profit should never be framed as the enemy of purpose. Profit matters enormously. Without profit, businesses cannot survive, invest or create value at scale. But profit is an outcome, not a purpose. Profit is to business what oxygen is to life; essential, but not the reason for living.

The best organisations understand this instinctively. They recognise that enduring commercial success increasingly depends on creating genuine value for society, not extracting value from it.

Ultimately, purpose reveals itself not in language but in trade-offs. It becomes visible when leadership must choose between short-term gain and long-term legitimacy; between what is easy and what is right; between what can be justified financially and what can be defended ethically.

This, perhaps, is the deepest reason purpose remains elusive for so many organisations.
Genuine purpose is demanding precisely because it exposes contradiction. It forces organisations to confront the uncomfortable gap between what they say and what they are structurally designed to do. It requires courage, discipline and, above all, honesty.

And that leads to the question every organisation should periodically ask itself.
If this organisation disappeared tomorrow, would the world lose something of genuine value? Or would there simply be one less mechanism for extracting profit?

That final question cuts through branding with brutal efficiency. Because in the end, purpose is not about sounding good. It’s about being worthy of existence.