I'm often asked by CEOs in the strategic planning process whether their organization needs a purpose. It's a great question, considering organizations have thrived quite well with the traditional planning statements of vision and mission. But do organizations need yet another statement of strategic commitment? The answer – it very well may.
Source: Harvard Business Review
Purpose, vision, and mission answer three very different yet interconnected questions.
Purpose asks “why do you exist” as an organization. It’s a lofty, emotionally-laden question that probes your organization’s role in the lives of society, customers, and employees. It’s a statement rooted in the present. It’s your core reason for being. It’s about MEANING.
Vision asks “what do you want to be” over a planning time horizon, often 3-5 years, relative to competitors and the rest of the industry. It provides direction, motivates long term thinking and can unite teams across functions to achieve a specific, measurable goal. Vision is anchored in the future, can evolve over time and speaks very much to your AMBITION.
Mission is also company-centric and asks, “how will we achieve the vision.” It guides day-to-day decision-making and is very action-oriented. It’s about FOCUS AND EXECUTION.
Let’s examine the specific value and business case of having a compelling purpose statement.
More Than a Slogan
A compelling purpose statement serves as a strategic asset that can drive business results. Unlike mission or vision statements, a purpose statement explicitly articulates why the organization’s work matters. When authentic and well-crafted, purpose statements provide direction, differentiate your brand, and inspire engagement across audiences.
Purpose statements have long been powerful tools in the nonprofit sector, where customers, donors, and employees feel a higher calling to their company and role within it.
Two examples illustrate this perfectly:
Doctors Without Borders:
“To provide lifesaving medical care to people in crisis regardless of race, religion, or political affiliation.”
Patagonia:
“We’re in business to save our home planet.”
Both have elevated these organizations far beyond their industries.
These statements work because they’re simple, jargon-free, emotionally resonant, inspiring yet achievable, and inclusive. This last point is crucial, as Level5 has seen time and time again that feeling “connected to the cause” is one of the most powerful drivers of donation intent.
Successful, profitable organizations have increasingly discovered the power of purpose to drive their growth. Take Walmart, whose entire positioning centers on one clear purpose: “to save people money so they can live better.” This simple, inspiring, measurable, and inclusive statement serves as the lens for every decision at Walmart. From operations to marketing to distribution, this purpose reaches deep into the organization and anchors the company, strategy and operations.
Tech giants follow similar approaches. Microsoft’s purpose is “to empower every person and every organization on the planet to achieve more.” Shopify states their purpose is “to make commerce better for everyone.” All share the same qualities: simple, memorable, inclusive, and strengthened by clear vision and mission statements.
Clear purpose aligns teams internally, strengthening relationships with customers, stakeholders, and donors through provocative storytelling and demonstrations of impact. For nonprofits and profitable organizations alike, purpose provides clarity and reason for being, and CEOs should consider leading with it.
Your People Will Feel the Difference
Evidence shows that a clear purpose statement can anchor organizations during times of crisis, inspire employees, and clarify the organization’s core identity for all stakeholders.
Employees in purpose-driven organizations are more likely to show higher levels of motivation and trust toward their employer[1]. This translates directly to lower turnover costs and higher performance across teams.
With 70% of employees deriving their sense of purpose from the work they do[2], leaders have a powerful opportunity to inspire deeper connection between employees and the organization’s purpose. When people understand why their work matters, they bring more energy and commitment to everything they do.
Beyond Employee Engagement
A clear purpose statement can create competitive advantages that extend beyond your workforce. Customers develop stronger loyalty to brands they trust and believe in, and investors increasingly favor companies with clear social and environmental commitments. It’s about demonstrating that your company cares about more than the bottom line, which is why 52% of customers feel more trust in an organization when it is involved in social causes.[3] In nonprofit work, donors give more generously and consistently to organizations whose purpose they can clearly understand and support.
At Level5, we had the honor of helping West Park Healthcare Centre articulate a powerful purpose and fundraising idea: “to help patients recover from life-changing health challenges and get their lives back.” The central purpose, “get your life back,” struck at the very heart of what patients and their families wanted after enduring a traumatic health-related experience. This purpose not only became a big part of a fundraising campaign that raised over $100 million for a little-known community hospital, but it also gave employees a shared reason to come to work every day.
Clear purpose becomes a filter for decision-making, a rallying point during challenges, and a differentiator in crowded markets.
The Performance Impact
The power of a purpose statement can have positive implications on performance across many drivers of the organization.
On the revenue line, customers value purpose too. 62% of customers say they prefer businesses that support social causes that are important to them, and over half said they would be willing to pay more to do business with a brand that gives back[3].
Organizations with clear purpose statements consistently outperform their competitors. Research shows purpose-driven companies grow faster than others, with 58% achieving over 10% growth in three years compared to just 42% of companies without clear purpose.[4]
Customers even agree that their experience improves, as over half believe that companies that support social causes are more likely to treat customers better.[3]
This isn’t coincidence, it’s the measurable impact of a compelling and inclusive sense of purpose.
The Bottom Line
Purpose-driven organizations often perform better financially, and in an era of increasing disengagement, employees feel better about their work. Higher employee retention, stronger customer loyalty, better relations with their target audience, and clearer strategic direction all contribute to sustainable profitability and growth.
The real question isn’t whether your organization needs a compelling purpose statement. It’s whether you can afford to operate without the competitive advantages, employee engagement, and financial performance that come from having one.
Your purpose statement is an investment in your organization’s future that pays dividends in every aspect of your business.
A final thought: if you are going to embrace purpose, it’s paramount that it be much more than a marketing message – it needs to be operationalized and embraced from leadership to the front lines.
Why does your organization exist?
At Level5 Strategy, an award-winning boutique management consulting firm trusted by leading organizations, we help businesses navigate challenges in organizational purpose with the right tools and insights. Whether you’re exploring our unique approach to find out how to craft a concise purpose statement or looking to learn more about how leaders create purpose-driven organizations, our experienced team delivers the solutions and hands-on support needed to drive lasting success. For more expert perspectives on strategy execution, explore our latest thinking or connect with our team.
[1] Mind the Purpose Gap | Deloitte Insights
[2] Help your employees find purpose-or watch them leave | McKinsey
[3] Why Customers Pay More For Brands With Purpose: The Patagonia Model | Forbes
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