The document discusses how defining a clear purpose is important for business success. It identifies four types of purposes that successful companies have: discovery, excellence, heroism, and altruism. A strong, well-communicated corporate purpose can lead to up to 17% better financial performance. However, only 10% of managers take truly purposeful action, while many procrastinate or are distracted.

1. PURPOSE
A sense of purpose is increasingly
recognised as essential for
business and personal success.
© Copyright 2012 London Business School

2. Purpose, defined by Douglas Ready
and Emily Stecker Truelove is
“the company’s reason for being;
why it exists; its core mission as an
enterprise”.
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3. Nikos Mourkogiannis, author of
Purpose: The Starting Point of
Great Companies says
successful companies define
purpose in one of four ways.
1 2 3 4
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4. Discovery - This type of purpose involves a love of the
1 new and innovative, and it animates many
technological businesses. Seeking the new does not
mean constantly changing course.
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5. Excellence - Excellent businesses prefer to turn away
2 customers than compromise their quality standards.
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6. Heroism - Think of Henry Ford’s creation of his world-
3 changing motor company or Bill Gates’ Microsoft.
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7. Altruism - This purpose could take the form of
4 personal service beyond that normally expected,
delivering products at affordable prices, or using
technology and ideas to improve lives.
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8. Purpose in numbers
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9. A strong, strategically coherent
and well communicated corporate
purpose is associated with up to
17% better financial performance.
IMD/Burson Marsteller Corporate Purpose Impact Study 2010
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10. Only 10% of managers take purposeful
action — a powerful combination of
energy and focus. Meanwhile, 30% of
managers procrastinate, 20% show
detached behaviour and 40% exhibit
distracted behaviour.
Sumantra Ghoshal and Heike Bruch
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11. “Management was, is, and always
will be the same thing: the art of
getting things done.”
Bob Eccles and Nitin Nohria, Beyond the Hype.
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12. Only 40% of employees understand
their organisation’s strategy.
Accenture High Performance Workplace Study
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13. 88% of highly engaged employees
believe they can positively impact
the quality of their organisation’s
products; only 38% of disengaged
employees think so.
Towers Perrin 2008
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14. “You cannot foster true innovation
without engaged employees.”
Julian Birkinshaw, MLab and London Business School
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15. Only 4% of UK workers exhibit the
highest level of engagement with
their work.
Corporate Leadership Council
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16. “The purpose of business is to
create a customer.”
Peter Drucker
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17. 40% of a company’s reputation is
determined by its purpose and
60% by performance.
Burson Marsteller/Penn, Schoen & Berland, 2008
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18. This report was part of Business Strategy Review,
Volume 22 – Issue 3 2011
Visit our website www.london.edu/bsr
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