Driven by a purpose: how to create a purpose-driven business model

Whether a business purpose is big or small, it has to be authentic first and foremost, otherwise it will not sit well across the business model and it will not empower employees to support the mission, says Kelly Hudson

Businesses have long been encouraged to build purpose into what they do. It can bring many benefits as companies unite the best talent, inspire richer innovations and are more attractive to their customers. In fact, 79% of consumers say they are more loyal to purpose-driven brands, according to Cone and Porter Novelli’s research. A separate study reveals that 94% of global consumers say it is important for them to engage with companies that have a strong purpose, but unfortunately, only 37% of consumers believe that businesses have one.

Creating and promoting a purpose-driven culture is a challenging task as a purpose can often become just an add-on or another buzzword with no actual meaning or action behind it. Thanks to technology and greater media exposure, businesses are also under the spotlight like never before to show what they care about and what impact they are making to improve our lives. However, the era of total visibility has also given individuals the power and the platform to stand up for their opinions and beliefs on a grand scale. Whilst some people foster the notion that operating with a purpose is morally and commercially a no-brainer, sadly others view purpose as nothing more than a marketing tagline. Therefore, companies face pressures to prove to their customers that their purpose is indeed authentic and not driven by profits.

Many companies developed a purpose in the past just for the sake of having it, and that hasn’t worked due to the lack of authenticity or mistaking purpose for a business strategy. Take the Volkswagen emissions scandal, for example. The company promoted their vehicles as clean alternatives, however, their actions were driven by business interests and short-term profit rather than a true belief in doing the right thing to save the planet.

As we emerge from the pandemic, it is now more important than ever for organisations to transform their business models and look at defining or redefining their purpose to make a difference in society.

Why is it important to have a purpose?

To answer the question in short – because purpose is everything. It is an organisation’s soul and identity. It defines the company and forms its DNA. It answers the all-important question – Why does a company exist? That crucial answer becomes a conscious expression of how the business intends to conduct itself ethically and helps guide all decision-making processes, recruitment strategies, new partnerships, and future directions for the business.

Today’s consumers want to engage with brands that know what they stand for, have a true passion, support and give back to their communities. They also want to buy from brands that align with their values, with a recent study finding that has become even more important for 83% of millennials. Of course, not all businesses will be driven by reducing the environmental footprint, fighting to end child labour or helping low-income families with free online education. Similarly, not all customers will care about or identify with those issues. The point, however, is not to try and align the business purpose to what will attract the most customer interest – that is one of the benefits that comes later as a result. The focus should be on finding the single reason as to why the business was formed in the first place and how it can inspire a call to action. Only then can businesses reap the benefits and make an impact.

The benefits of being a purpose-driven business

Businesses can realise many noticeable benefits of adopting a purpose-driven business model. One of the main ones is the ability to bring together a like-minded and talented pool of candidates who are working towards the same goal. A recent survey by McKinsey has found that nearly half of US employees are reconsidering the kind of work they do because of the pandemic, with millennials three times more likely to say they are re-evaluating work. This proves that businesses with a purpose are better equipped to retain their skilled workforce, and more companies should offer jobs that bring that sense of purpose. Otherwise they will lose talent to companies that will.

Purpose acts like a glue and has the power to attract people who share the same passion, enthusiasm and dedication to the same cause. As that happens, companies can see significant improvements in their business culture and increased sense of recognition and reward amongst their employees. This in turn leads to higher employee retention as people are happier in their workplace, driven by the same mission and committed to making a real impact in the community. Lower churn rates have their own benefits as employees leaving a business can be disruptive to operations, affecting the bottom line during the time it takes to find and train a replacement.

As employees are more engaged and productive, they directly and positively impact customer satisfaction and are able to provide best-in-class experiences. Values and beliefs are all mirrored in how employees interact with customers, and as they share them, trust and loyalty is formed. With more customers returning and spending money, the business can increase profits, pride itself in good reputation and gain a competitive edge. This directly correlates with the business’ ability to form new and fruitful partnerships and great stakeholder relationships. Lastly, if purpose is rooted throughout the business, it allows employees people to feel empowered to act creatively, taking measured risks and driving innovation forward.

Creating a purpose-driven business

Forming a business model driven by a specific purpose cannot be a tick box exercise. The purpose has to be connected to the heart of the organisation, as well as being personal and authentic. To help with the discovery process, it is often worth going back to why the company was created and what problem it is trying to solve. What it stands for and what positive impact it wants to have in its industry and community. Sometimes that purpose will be clear and organically formed through the product or service. Other times the product will be a leverage point from which to solve a wider problem. For example, the sustainable toilet paper brand Who Gives a Crap and the drinks container brand, Corkcicle. Both companies are on a mission to tackle the environmental challenges and are helping us reduce our impact with their sustainable products.

Just defining the purpose, however, will not instantly make the business purpose-driven. Business leaders should align the organisation with the identified purpose, embed it into the core strategy, live by it and lead as an example. Only that way will it be believable for customers as well as employees. When the leadership is in full alignment, their decisions will be made accordingly to fulfil a mission. In addition, they will be better equipped to communicate and promote the purpose within the teams, making sure everyone is on the same page and takes proactive steps to drive the company forward and achieve the common goal.

Going one step further

Authentic purpose-driven businesses have the power to give something back to their community, industry or society. Whilst the service or product they offer has been created to solve a real customer pain-point, it is always worth going one step further and finding other organisations who are driven by a similar purpose to make a bigger impact. For example, technology businesses passionate about empowering older generations to live independently can seek to collaborate with other forward-thinking organisations and local authorities to support the social care system. Through such a powerful alliance, businesses and councils can extend their reach to help more people who otherwise would not receive the help need to lead a longer and better quality of life. Moreover, collaboration opens up the doors to new business and funding opportunities, driving new ideas and innovation forward to make a further positive impact in the community.


Whether a business purpose is big or small, it has to be authentic first and foremost, otherwise it will not sit well across the business model and it will not empower employees to support the mission. Purpose-driven businesses can realise many commercial and financial benefits, from higher employee engagement and diversified workforce to better competitiveness and improved profitability. However, having a purpose should never be about profitability alone. It should be about making a positive impact in the society, giving back and providing a good example for future generations. This can be done on an individual business level through employees and the leadership, or through various partnerships and collaborations with other like-minded organisations and local authorities. However businesses decide to approach their mission, it needs to be embedded into the core strategy and promoted across teams. Only then will the purpose-driven model be successful and the business able to realise its tangible benefits.

Kelly Hudson is Chief Strategy Officer at Lilli

Kelly Hudson is Chief Strategy Officer at Lilli

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