18

Harvard Business Review

March 2022

We Did This: Cases to

Remember

TODAY’S BUSINESS LEADERS are under

pressure to come up with a corporate

purpose, much as they were challenged

to develop vision and mission state-

ments in the 1980 s and 1990 s. Although

this focus on the role of corporations in

the economy and broader society has

many positive aspects, a risk is that

speed, shortcuts, and spin may take pre-

cedence over authentic action. Our goal

in this article is to help executive leaders

be clear-sighted about what they seek to

define: the purpose of their purpose.

Purpose has become something

of a fad and a victim of its own suc-

cess. Companies are aware that their

customers and employees are paying

more attention to it as part of a wider

companies that push for societal change

are more visible. But any of the three

types can be effective when pursued

appropriately. A competence-based

purpose (such as Mercedes’s “First Move

the World”) expresses a clear value prop-

osition to customers and the employees

responsible for delivering on it. A

culture-based purpose (such as Zappos’s

“To Live and Deliver WOW”) can create

internal alignment and collaboration

with key partners. A cause-based pur-

pose (such as Patagonia’s “in business

to save our home planet” or Tesla’s “to

accelerate the world’s transition to sus-

tainable energy”) promotes the idea that

it is possible to do well by doing good. All

three types can create a meaningful why.

What Is the Purpose of

Your Purpose? Your why may

not be what you think it is.

Jonathan

Knowles

Founder, Type

2 Consulting

B. Tom

Hunsaker

Professor,

Thunderbird

School

Hannah

Grove

Non-executive

director, abrdn

Alison

James

Executive

director, BIC

Corporate

Foundation

AUTHORS

reassessment of the role of corporations

in society. BlackRock’s CEO, Larry Fink,

and other major investors are urging

executives to articulate a role for their

companies beyond profit making,

implying that doing so will affect their

valuation. But despite its sudden eleva-

tion in corporate life, purpose remains

a confusing subject of sharply polarized

debate. Our research indicates that a

primary cause of this confusion is that

“purpose” is used in three senses: com-

petence (“the function that our product

serves”); culture (“the intent with which

we run our business”); and cause (“the

social good to which we aspire”).

Cause-based purposes tend to receive

the most attention, largely because

Photograph by CRAIG CUTLER

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36
Harvard Business Review
March–April 2022
Spotlight
“I’m sorry,” Prisha said. “I
don’t want to abandon you all, but
Ishan seems so much happier and
has the potential to make more
money. It’s really tempting to
follow his lead. I have to think of
my own interests.”
So much for family, Diya
thought.
“I see where you’re coming
from,” Diya said, “but let me
present the counterargument.”
She shared all the reasons to stay:
the security, the benefits, the
company’s growth potential, and
yes, the close-knit culture.
But as she was talking, Diya
realized that she wasn’t sure
those upsides were convincing
enough. Would retention bonuses
or pay increases be more compel-
ling? Or was it time to intensify
the downsides of leaving by
instituting a no-working-with-
former-employees rule and
inserting language to the same
effect and noncompetes in all
future employment contracts?
Would carrots or sticks be more
persuasive?
RAKESH BOHRA is the senior VP
and head of projects at Pioneer
Urban Land & Infrastructure Ltd. and
a doctoral student in organizational
behavior and human resources
management at the Management
Development Institute in Gurgaon,
India. JYOTSNA BHATNAGAR is a
professor of organizational behavior
and human resources manage -
ment and dean of research at the
Manage ment Development Institute
in Gurgaon, India.
It’s time for Blackbird to
lean into 21 st-century
management, embrace the
gig economy, and let more
employees go freelance.
Diya and Veer made the right decision
with Ishan, and they’ll attract more
talent, foster greater loyalty, build a bet-
ter culture, and produce more-creative
work by letting others follow suit.
To keep pace with societal and
technological change, companies today
need to be flexible with—and offer
flexibility to—their workforces. Young
people, particularly creatives, want the
autonomy and variety that gig work
offers. And companies like Blackbird
can greatly benefit—first, by reducing
the danger of having people they can’t
keep busy on the payroll and, second,
by serving clients with curated teams
designed for their specific needs. If
your employees are almost exclusively
full-time, you’re stuck with their skills;
How should Diya handle all the
employees who want to follow
Ishan? The exper ts respond.
JOHN H. CHUANG is
the cofounder, chairman,
and CEO of Aquent.
152
Harvard Business Review
March–April 2022
Experience