What Does a Purpose-Driven Company Do? (With Definition)

By Indeed Editorial Team

Published November 14, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

An organization's purpose is the fundamental reason for its creation and existence. It's important because it provides direction and focus and serves as the framework for planning, operating, and measuring success. Learning about the characteristics of companies with a clear purpose may help you identify which organizations align with your values and career goals and enable you to determine if they're a good fit for you. In this article, we define what a purpose-driven company is, discuss what they do, and provide tips for integrating purpose within an organization.

What is a purpose-driven company?

A purpose-driven company is an organization with a clear purpose or defining statement that guides its strategy and decision making. This purpose describes its values and goals and helps employees understand their role in achieving the organization's vision. A company reflects it through its culture and policies. An organization may also demonstrate it through its products and services and the initiatives and programs it supports.

In many instances, purpose-driven companies place importance on sustainability, social responsibility, the environment, and the well-being of their employees. They may also commit to being responsible corporate citizens and use their influence to improve the community in which they operate. Some purpose-driven companies have a formalized strategy for integrating purpose into their business, while others have a philosophy that permeates their culture and decision-making process.

Related: How to Write a Purpose Statement in 8 Steps (With Examples)

What do purpose-driven companies do?

Creating a positive impact is often a priority for purpose-driven companies. This often means launching programs and initiatives that help them achieve their purpose. They may also do this by supporting other organizations whose mission aligns with theirs. Here are six other ways they may enact their purpose:

1. Encourage innovation in the organization

Purpose-driven organizations often promote innovation within their workforce to encourage employees to work toward achieving their collective goals, which may include realizing their vision and mission. Innovation within a company may positively impact society because it may address relevant issues that affect the community. For example, when an employee identifies a better way to provide a service or product, they may share the idea with their colleagues to help build a better system and improve the lives of their customers.

Innovation can also be evident in the products and services that a company offers. For example, an organization may use its platform to provide a service that benefits the wider population, such as giving impoverished communities access to clean drinking water. This is innovative because the company found a way to provide a currently unavailable service.

Related: What Is an Innovative Culture? (With Essential Features)

2. Engage with partners for more impact

Businesses driven by purpose find new and better ways to engage with communities and society. To do this, they may partner with other organizations and seek out collaborations. For example, a company may team up with a foundation to provide aid to a community affected by a natural disaster. They may also collaborate with other companies to create a new product or service that benefits a group of people by addressing a specific need or donating a percentage of their sales to a non-profit organization that helps their target community.

Collaborations with partner organizations benefit both parties involved and the community. Teaming up with another company allows the purpose-driven organization to expand its reach and make a more significant impact. It also allows both organizations to achieve their goals and their mutual purpose. The target community benefits because they receive the services, products, and programs necessary to improve their lives.

3. Understand their purpose

While purpose-driven organizations may differ in their focus, they're similar because they clearly understand their purpose, mission, and vision. They also know how their purpose relates to their business model and how they can achieve this. For example, a purpose-driven coffee company may understand its purpose is to provide coffee growers with a fair profit to enable them to provide a better life for their families. The coffee company also knows it can achieve this by sourcing beans from suppliers who pay a fair wage and sell coffee at a reasonable price.

Companies with a clear vision often implement policies adding long-term value to the company and the people they wish to impact. They may invest resources into programs that help employees improve their skills and qualifications. This may result in higher productivity and greater job satisfaction, which may lead to better performance for the company. They may also invest in developing new products and services that benefit the wider community. For example, a purpose-driven coffee company may introduce a new product that benefits the environment with fully compostable, biodegradable packaging.

Related: The Importance of Employee Training and Development

4. Act to protect the future

Purpose-driven companies value protecting their future and the subject of their purpose. They often use their resources to ensure they remain strong and continue improving. They may also achieve this through policies that help the company and the community grow and prosper. For example, a purpose-driven coffee company may invest in a new roasting facility that enables it to provide its customers with a great product. It may also provide the farmers it supports with new equipment to help them improve their productivity, reduce their environmental impact, and increase their profits.

5. Practise philanthropy

A purpose-driven organization may engage in acts of philanthropy, such as donating to causes and non-profit organizations, providing products and services to those in need, and offering financial support to individuals and communities. The resources it uses to achieve its purpose may come from various sources, including sales, investments, and partnerships. It may also receive additional funding from individuals, organizations, and governments that share its purpose. Some purpose-driven organizations may even have a philanthropic department through which they raise money for causes and direct resources to the communities they wish to help.

Related: What Is Corporate Philanthropy? (With Types and Benefits)

6. Focus on consumer education

Purpose-driven organizations often put great effort into educating their customers about their purpose. The goal is to encourage consumers to actively support the company's initiatives, primarily using their purchasing power. Consumer education may take the form of online content, such as blogs and social media posts, printed materials, such as brochures and pamphlets, and other methods, such as classroom presentations, speaking engagements, and events.

While this may be an effective strategy for generating interest in products and services and increasing sales, it may also be valuable for helping people understand how their purchases can make a difference. When people are aware of the impact of their choices, they're more likely to feel invested in the company and the community it serves. This may encourage them to increase their purchases, share their experiences with others, and help spread awareness about the issues the organization is trying to address.

Related: Understanding Corporate Responsibility (Types and Examples)

Tips for integrating purpose within an organization

Purpose provides organizations with a clear sense of direction, enables them to define their brand, and helps them attract and retain the right people who can contribute to their success. If you're part of a company's leadership or management team, you may want to consider ways in which you can integrate purpose within the organization. When doing this, it's important to think about how purpose can help the organization improve its performance and bring about positive change. Here are several tips you may follow:

Promote a shared vision

One of the best ways to integrate purpose into an organization is by promoting a shared vision among its members. This is a shared understanding of its purpose and direction. It's also a clear sense of the values and principles that guide the company's decision-making process. This helps ensure that all members of the organization work together to achieve the same goals.

Integrate the vision into the organization's daily activities

Purpose-driven organizations integrate their vision into their day-to-day operations in several ways. These may include embedding the purpose statement into company literature, providing employees with opportunities to share their understanding of it with others, and encouraging consumers to take an active role in supporting the organization's efforts. When companies do this, they can identify key areas in which their actions can help fulfill their purpose and create positive change.

Set goals

Creating goals is one of the best ways to integrate purpose into an organization. Goals help define the direction the company is taking and ensure it's making progress toward its objectives. These may also help establish accountability, identify areas where the company can improve its performance, and build on its strengths.

Related: How to Write a SMART Goal (With Importance and Examples)

Share the company's purpose with the public and key stakeholders

It's important for organizations to share their purpose with their customers, partners, and other key stakeholders, such as suppliers and investors. This enables them to build a sense of goodwill and encourage others to support their efforts. It may also help them to identify other ways in which they can positively impact their communities.

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