What Is Purpose? 4 Key Points to Understand It

Below, we will walk through the following four points in order.
(1) The definition of purpose
(2) The societal background driving the need for purpose
(3) Purpose from an individual perspective
(4) Case studies of purpose-driven management

“Purpose,” when translated literally, means “objective” or “aim.” However, in the context of business management, it is more appropriately understood as a company’s “reason for being” or “raison d’être.” Put simply, it is a concise expression of why a company exists.

Concepts similar to purpose include vision, mission, and values. How, then, does purpose differ from these?

A vision articulates the “future” a company seeks to realize. Purpose, by contrast, expresses the reason a company exists across the continuum of past, present, and future. While vision is oriented toward what lies ahead, purpose is more fundamental—it represents the company’s point of origin.

Mission, meanwhile, is often considered closest to purpose. There are various interpretations of the distinction, but one particularly compelling view is this: mission carries a stronger outward-facing implication, describing what a company seeks to undertake or deliver. Purpose, on the other hand, emerges from within—it reflects the organization’s inner conviction and its guiding aspiration. Purpose fosters empathy, drawing both internal and external audiences into a deeper affinity with the company. From this foundation, the mission—what the company sets out to accomplish—naturally takes shape. This perspective offers a clear and intuitive way to understand their relationship.

Values refer to the principles and beliefs a company holds dear, articulated in words. This may be easier to grasp through a concrete example. Consider comparing Sony’s “Sony’s Purpose & Values.”

Image source: “About Sony Group: Sony’s Purpose & Values”
https://www.sony.com/ja/SonyInfo/CorporateInfo/purpose_and_values/

As this illustrates, purpose represents the fundamental “way of being” of a company. Values, on the other hand, articulate the organization’s unique “character”—the qualities that define how it expresses itself.

Why has purpose-driven management gained such prominence today?

A major factor lies in the shift in societal values. In 1972, the international think tank the Club of Rome published a report warning that if trends such as population growth and environmental pollution continued, the limits to growth on Earth would be reached within a century. Fifty years on, as social challenges grow increasingly severe, more people are paying close attention to whether companies are genuinely committed to addressing these issues. An era has arrived in which businesses that pursue profit alone are quickly seen through—and are no longer supported by their customers.

Global circumstances also play a role. The COVID-19 pandemic, the increasing frequency of natural disasters, and the rapid advance of digitalization—reducing physical constraints—have created an environment that is constantly shifting and difficult to predict. In navigating such uncertainty, companies need a distinctive and irreplaceable value in order to be chosen by consumers. When a clearly defined purpose articulates a company’s reason for being, it serves as a guiding principle for decision-making. It enables organizations to select strategies that align with their identity and, in turn, strengthen their brand.

Stepping slightly away from a purely managerial perspective, let us consider the “purpose” of each individual working within an organization. When viewed through the lens of work, individual purpose can be understood as the “meaning behind one’s work.” In an era where people have greater freedom to choose careers that bring them a sense of fulfillment, it has become increasingly important for individuals to define their own purpose and make career choices in alignment with it. This is something the author has personally experienced through transitioning into a new industry. In interviews, candidates are invariably asked about their motivation for applying; when this is clearly connected to one’s personal purpose, it carries far greater conviction. One might even say that such questions serve to assess whether an individual’s purpose aligns with the company’s direction.

At the same time, many may wonder, “How can I discover my own purpose in work?” Based on the author’s personal experience, one helpful approach is to list various values related to work and arrange them in order of priority. This process can bring clarity by revealing what you truly value and what matters less, allowing for a more relative and structured understanding. If this proves useful, all the better.

Working in alignment with one’s purpose is said to bring effects such as the following:

When individuals work in environments where their purpose is fulfilled, both satisfaction and performance tend to improve—creating positive outcomes for both the individual and the organization. It is, in essence, a mutually beneficial relationship. From this perspective as well, it becomes clear that companies must clearly articulate their purpose: to attract those who resonate with their stance, and to enable individuals to truly experience a sense of meaning in their work.

Finally, let us look at a real-world example of a company that has clearly articulated its purpose.

Here is a case from overseas. In 2015, Warby Parker was ranked No. 1 in Fast Company’s list of the “World’s 50 Most Innovative Companies,” surpassing firms such as Google and Apple. It was praised as “the first great brand of the internet age.” What enabled the company to gain such widespread popularity?

One key reason lies in Warby Parker’s purpose-driven approach to management. Guided by the belief that “buying glasses should be easy and fun,” the company has made eyewear more affordable while creating a seamless purchasing experience. In addition, under the slogan “Everyone has the right to see,” it operates the “Buy a Pair, Give a Pair” program. For every pair of glasses purchased, another is distributed to people in developing countries through nonprofit partners. These initiatives have resonated with many, contributing to the company’s continued growth.

This example illustrates how a company can evolve into a beloved brand by consistently building its business around a clearly defined purpose. By communicating ideas that are genuinely rooted within the organization—rather than superficial messaging—it has successfully cultivated a strong base of supporters.

Image source: “Warby Parker”
https://www.warbyparker.com/

As an example of a brand whose products are also available in Japan, consider ECOALF, a fashion label originating in Europe. Guided by the message “BECAUSE THERE IS NO PLANET B,” ECOALF creates all of its items using recycled or low-impact materials. Founded in Spain in 2009, the brand emerged from a sense of urgency about the fashion industry’s heavy consumption of natural resources, with the aim of building a truly sustainable fashion brand.

By employing technologies that make it difficult to distinguish recycled materials from conventional ones, ECOALF enables consumers to enjoy fashion that is both environmentally responsible and aesthetically refined. Its project “UPCYCLING THE OCEANS,” which collects marine plastic waste and gives it new life as clothing, has drawn attention for establishing an unprecedented production cycle.

As these examples suggest, purpose is most compelling not when it exists merely as a statement, but when its essence is visibly embedded in concrete business practices. When that alignment is clear, it naturally inspires people to support the company.

Image source: “ECOALF”
https://ecoalf.jp/

Image source: “ECOALF”
https://ecoalf.jp/

While Lily Medtech does not explicitly frame its purpose through a single phrase or narrative, it can still be seen as a compelling example of purpose-driven management—one grounded in deeply held conviction and expressed through the company’s actions and words.

Image source: “Lily Medtech”
https://www.lilymedtech.com/

We have explored the concept of purpose from several angles—what are your thoughts?

At first glance, “purpose” may seem like a relatively new idea. In reality, however, similar philosophies have long existed within Japanese business culture. Examples include Eiichi Shibusawa’s concept of “The Analects and the Abacus,” the Ohmi merchants’ principle of “Sanpō-yoshi” (good for the seller, good for the buyer, and good for society), and Konosuke Matsushita’s well-known belief that “a company is a public entity of society.” These ideas reflect a longstanding emphasis in Japan on the relationship between businesses and society, as well as between companies and their employees.

In this sense, purpose is not an unfamiliar concept for Japanese companies. By revisiting and reinterpreting it in today’s context, it may offer valuable insights into management approaches that are better aligned with the demands of our time.

References
Eiko Ibuki & Yukito Konishi (2022), Practical Purpose Management Through Case Studies, Nikkei Publishing
Mikiko Saito (2021), Purpose Branding: Starting with “Why,” Not “What”, Sendenkaigi
Takashi Nawa (2021), Purpose Management: Viewing the Present from a 30-Year Perspective, Toyo Keizai
Kunimori Saso (2021), PURPOSE: Why Does a Company Exist? Why Do You Work There?, Diamond Inc.
Harvard Business Review Editorial Department (2021), The Purpose of Work, Diamond Inc.

References
Eiko Ibuki & Yukito Konishi (2022), Practical Purpose Management Through Case Studies, Nikkei Publishing
Mikiko Saito (2021), Purpose Branding: Starting with “Why,” Not “What”, Sendenkaigi
Takashi Nawa (2021), Purpose Management: Viewing the Present from a 30-Year Perspective, Toyo Keizai
Kunimori Saso (2021), PURPOSE: Why Does a Company Exist? Why Do You Work There?, Diamond Inc.
Harvard Business Review Editorial Department (2021), The Purpose of Work, Diamond Inc.