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Businesses Need Purposes

At the 14th Global Peter Drucker Forum, Prof. Ranjay Gulati, Paul R. Lawrence MBA Class of 1942 Professor of Business Administration at Harvard Business School, pointed out that answering “what are we doing” no longer suffice for businesses. They must be able to tell unequivocally “why they are doing what they are doing.” Unsurprisingly, this resonates with a study from Edelman, a leading global communication firm, which shows that 72% of global consumers would recommend a company with purpose. Why is this the case, and what can businesses harness from this fact?


Today’s digitization makes people more connected than ever with tremendous amounts of data being accessible. As a result, consumers are spreading the word about corporates’ conduct on social media. According to Forbes, consumers have shown significant “trust deficits” toward businesses, which have been operating with free reign for decades or even centuries. This, combined with people being more caring of the environment and sustainability, businesses need purpose not only to cater to their consumers, but also to mobilize their employees. The Edelman study also shows that 84% of consumers make a cause-related purchase at least annually. On the other hand, from an organizational performance perspective, Harvard Business Review cites that 88% of executives view purpose as vital to their organizations. All these go to show that purpose in business is necessary, both for the consumers and stakeholders of an organization.


During the plenary session “How Purpose Drives Performance” at the forum, Prof. Gulati stated that companies could use purpose to drive performance in terms of both monetary and non-monetary. In other words, they can utilize purpose not only to earn financial benefits but also to drive non-monetary benefits such as partnerships, employees’ capability, and society’s support. Businesses, therefore, should encourage individuals in their stakeholder networks to be purpose-driven and work toward the organizations’ primary goal. This notion is shared by the Chair of the panel, Mary Meaney Haynes, Social Entrepreneur and Philanthropist who added that without action, a purpose is just propaganda.

Moreover, Jean-Philippe Courtois, Executive Vice President and President, National Transformation Partnerships at Microsoft, also agreed and backed up his statement with actions from his company. At Microsoft, purpose turns into results as everyone takes the mission statement of “empowering every person and every organization on the planet to achieve more” seriously. To back this up and demonstrate its resolve, Microsoft created a strategy to transform stakeholders one at a time. With that, the tech giant’s network started to expand and impacts increased from just a few areas to many—driven by synergy and economy of scale when the strategy focused more on broader dimensions. Regarding people, Microsoft ensures its employees understand not only “what” they are doing but also “why” what they do matters. With that, its workforce becomes motivated and energized with a common purpose, for it knows the true value of its contribution.

Finally, the panelists concluded that after executives have implemented concrete plans to make their organizations purpose-driven, they must maintain a clear and accessible line of communication. It is essential for employees to understand the company’s purpose as well as to voice their concerns and even have the chance to recommend their thoughts on the process. With this, businesses become purpose-driven and people-centric. For what is a business but an organization to uplift people’s lives in a way that resonates best with its purpose?

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