Business Purpose: From Narrative to Strategic Business Decision

Business Purpose: From Narrative to Strategic Business Decision

By Carmen Montes, Senior Consultant at Almabrands

The corporate purpose remains relevant, but it is losing its ability to influence the business.

The latest findings from the “Evolution of Corporate Purpose” study show that while 87% of companies report having a purpose, its strategic importance has fallen from 77% to 66%. Evidence suggests that the impact of purpose has been concentrated in culture and brand, while its influence on the business remains weaker. The question, then, is no longer about the relevance of purpose, but rather about realizing its potential not only in culture and brand, but also in strategic development guidelines.

Reestablishing Purpose as a Strategic Asset

In situations where there is pressure to deliver short-term financial results, organizations tend to prioritize decisions and initiatives that have a rapid and direct impact on their financial performance. The logic and implementation of purpose, on the other hand, require a broader perspective. When the short term and the long term are mutually exclusive and purpose ceases to align with business ambition, the likelihood that it will become an effective tool across all areas of the company begins to diminish.

Reestablishing purpose as a strategic asset requires a shift in perspective: moving away from viewing it as a declarative framework and beginning to manage it as a tool that guides growth, differentiation, and innovation. It is at that moment—when purpose influences which businesses to develop, which investments to prioritize, or which opportunities to explore—that it shifts from being merely inspiration to becoming strategy.

Measuring to Highlight the Power of Purpose in Driving Business Growth

The second factor that appears to be undermining the ability of purpose to connect with the business is the lack of associated KPIs. Without measurement tools, purpose cannot participate on an equal footing in strategic discussions. In this analysis, the study reinforces that the lack of metrics remains one of the main barriers to the willingness to implement it. And this has a direct consequence: what isn’t measured isn’t managed. And what isn’t managed doesn’t compete.

The challenge, then, is not only to monitor its role in the cultural or reputational sphere, but also to assess, in a visible and concrete way, its impact on business results: growth, innovation, and efficiency, to name a few. Only then does the purpose cease to be an inspiring but intangible phrase and become something that can be managed.

Governance: Purpose at the Table Where Strategic Decisions Are Made

The third challenge is governance. When purpose shifts away from senior management or remains confined to specific areas, it loses its ability to be integrated into and drive relevant decisions. The Almabrands study shows that its management is shifting toward the Human Resources department, with the risk of being limited to the cultural sphere. The problem isn’t who manages it; the problem is where decisions are made. If purpose isn’t present on boards of directors, strategic committees, and in business planning forums, it cannot fulfill its role.

Reestablishing its governance at those tables is not symbolic; it is structural.

The challenge lies both in strategic vision and in execution

For years, the conversation centered on defining a meaningful purpose; today, the challenge is different: to bring that purpose to life in every aspect of the company—its culture, its brand, and, most importantly, its business strategy. Because in an environment where everything competes for attention and resources, a purpose won’t sustain itself on conviction alone.

The meaning, role, and transformative impact of purpose in companies will unfold and be sustained when it is valued and validated (hence the metrics) as part of the business strategy. And that is the real challenge today for companies that have defined their purpose and seek to grow and have a positive impact on their business, as well as on people and society.

Download the full study here