In an era characterised by rapid change, economic uncertainty, and evolving expectations from stakeholders, businesses can no longer solely depend on financial performance for sustained success. Purpose-driven leadership acts as a guiding principle, enabling organisations to inspire their workforce, cultivate trust with customers, and attract investors who are increasingly looking beyond short-term profits. Companies that operate with a clear and authentic purpose tend to outperform their competitors and develop greater resilience, foster innovation, and exhibit better adaptability when faced with regulatory and policy shifts.

Despite recognising the significance of purpose, many leaders struggle to articulate what their company truly represents beyond the pursuit of profitability. Even when a strong purpose exists, challenges arise in effectively communicating it across the organisation, integrating it into daily operations, and ensuring that employees feel a genuine connection to and investment in that purpose. Without a well-defined strategy, purpose can risk becoming a superficial buzzword rather than a fundamental force that shapes business decisions, enhances employee engagement, and drives sustainable growth.

Defining purpose requires a deeper introspection into the organisation’s reason for existence and the value it aims to create for all stakeholders, including the wider society and the environment. It involves understanding the long-term well-being for all and how the organisation’s activities contribute to or detract from this. This process often involves frank discussions about the organisation’s impact, both positive and negative, and a commitment to making decisions that maximise positive contributions while minimising harm.

ISO standards, such as ISO 37000 (Governance of Organizations), provide a globally agreed framework for what constitutes good governance. It establishes principles like direction, oversight, and accountability, which are crucial for ensuring that an organisation acts in alignment with its stated purpose. The upcoming ISO 37011 specifically focuses on standards for purpose-driven organisations, aiming to guide how organisations can govern themselves to routinely make decisions that enhance long-term well-being for all and avoid causing harm. These standards serve as a basis for reforming laws and enabling the development of organisations that contribute positively to society and the planet.

Laws generally represent society’s lowest common denominator of acceptable behaviour, outlining minimum requirements and penalties for non-compliance. ISO standards, on the other hand, often go beyond these minimums, providing guidance on best practices and how organisations can strive for excellence in areas like governance and purpose. While laws establish mandatory compliance, standards can be seen as aspirational, helping organisations understand what “doing their best” looks like and facilitating a “soft testing” of norms before they potentially become formalised in law.

Becoming truly purpose-driven requires a fundamental shift in mindset and governance. Organisations need to move beyond a primary focus on short-term financial self-interest and consciously align their strategies and operations with a clearly defined purpose that contributes to long-term well-being for all. Initial steps include fostering frank discussions within the organisation about its true reason for being, understanding its impact on all stakeholders, and ensuring that the governing body and management have a shared understanding and commitment to the stated purpose. Embedding the purpose into the organisation’s values and making it a central parameter for decision-making are also crucial early actions.

“Long-term well-being for all” is presented as the overarching goal of a sustainable world and the fundamental aim that should underpin the purpose of organisations. It encompasses not only the well-being of current and future generations but also the health of the planet and non-human life. A purpose-driven organisation is one that exists and operates in a way that its resources are used to positively contribute to this long-term well-being, while actively ensuring it does not cause harm in the process. This perspective integrates environmental, social, and governance considerations holistically, moving beyond a narrow focus on individual issues.

Younger generations entering the workforce are increasingly seeking employment with companies whose values and purpose align with their own, often prioritising purpose over the traditional notion of long-term job security within a single organisation. This shift in talent preference can significantly benefit purpose-driven organisations, as they are more likely to attract and retain motivated and engaged employees. Ultimately, this can lead to these organisations becoming more successful and valuable in the long term, as their commitment to purpose resonates with employees, customers, and increasingly, investors who recognise the importance of sustainable and ethical business practices.