Has Purpose Peaked?

In the second episode of our new podcast series, Insight to Impact, FGS’ Sir Craig Oliver and Louisa Moreton sat down with Oliver Shah, Associate Editor at The Sunday Times, to discuss whether the business case for purpose has peaked – and what comes next.

In recent years, purpose has become a buzzword in the business community. But investors are increasingly asking if it has been overblown. Some are now arguing for a sharper focus on finances, and various states have withdrawn funds from managers who do not prioritize the bottom line above all.

Shah believes purpose should be seen as simply “what a business does and the way it does it.” He warns leaders against conversations about purpose that do little to change an underlying business. A company’s purpose should be obvious, he says, adding: “If it’s not clear to the staff and customers…it probably isn’t real.”

While ESG can be key to that, the focus must be on profitability, products and services, and actually responding to what clients need – integrating purpose into operations as much as into communications, Moreton says.

As for the future, purpose will remain on the agenda, but in altered form. “Faux purpose or purpose-washing – people talking about it in an airy-fairy way – is going to be seen through more and more,” says Shah. “Companies that genuinely bake good behavior – rather than purpose and good future planning around what they’re going to be – into their business models will be the ones that will do well.”

As Moreton summarized, “Purpose has not peaked – but marketing-driven purpose has.”

Listen to the podcast here.