Strategic Alignment Reconciles Purpose and Profitability

Sustained performance requires a company purpose that is validated in the market.

- By Jonathan Trevor

FOR MANY LEADERSHIP TEAMS AND boards, discussions about a business’s corporate purpose are mired in conflict. All too often, the participants position purpose and profit as opposing priorities — and, in doing so, sideline purpose as an indispensable driver of strategic alignment and sustainable performance.

A corporation with no avowed purpose other than to earn profits for shareholders is a hollow endeavor — one with no guiding star for formulating strategy and little to encourage the intrinsic motivation that is critical for employees to perform at their best. At the same time, highly idealistic statements of company purpose that managers and employees perceive as disconnected from their day-to-day work likely function as little more than window dressing.¹

At an enterprise level, purpose and profitability are both vital components of a strategic alignment equation that defines a company’s raison d’être, how it is striving to fulfill its purpose against the demands of the marketplace, and how it defines and measures success.

While profit is an important measure of a company executing its purpose well, it can never be the purpose itself. An enterprise’s purpose is what it exists to do as an organization, and why doing it well matters. A wellunderstood and meaningful purpose should be a unifying force common to all within and without the enterprise. It helps employees intuitively understand why they matter in the larger context.² It also provides the ultimate definition of strategic success, which should never be confused with measures of success — including profitability.