What is “Purpose” and the power it holds for changing a company’s future

Purpose

Purpose – means asking, “Why do we exist?”. For a company, purpose is not just about profit or revenue, but about what value we provide to society or customers, and what future we want to build.

Purpose Branding

Purpose Branding – is the strategy of placing this purpose at the core of brand strategy, and embedding it throughout everything the company does: its products/services, communication, culture and behaviour.

Unlike traditional branding (which often focuses on “how we look” or “what image we project”), purpose-branding emphasises the why (why this company exists) and builds strong relationships with stakeholders (inside and outside the company).

The Difference Between Purpose Branding and Traditional Brand Strategy

While Purpose Branding focuses not only on visual expression, VI (Visual Identity), and brand experience, its true characteristic lies in placing a company’s purpose — its reason for being — at the center. It aims to build strong, lasting relationships with stakeholders, both inside and outside the organization.
There are several other differences between Purpose Branding and what has traditionally been considered brand strategy.

One key reason Purpose Branding has gained attention is the shift in why consumers and users choose brands. Advances in technology — such as generative AI and the metaverse — have also played a major role.
Although a company’s attitude and meaning have always influenced brand value, the kinds of values people care about have changed across generations.

In conventional brand strategy, the main focus is on “how to stand out in the market” and “how to differ from competitors”, by analysing customer needs, optimising products, and delivering messages accordingly. On the other hand, in purpose-branding, the focus shifts to “why the company exists” and “what meaning it holds in society”. It cares more about “what people empathise with” rather than “what they buy”.

Regarding objectives, conventional brand strategy typically emphasises economic outcomes — expanding brand awareness, increasing sales/share, improving customer loyalty, etc. In purpose-branding, the goal is not only short-term profit, but the creation of “social value” such as contributing to society or solving global issues. As a result of creating social value, strong long-term trust with customers, employees, and investors is born, leading to sustainable growth.

In conventional branding, marketing often centres on functional/emotional benefits (e.g., “This shampoo will make your hair smooth”) and product attractiveness. In purpose-branding, rather than emphasising the product’s appeal, companies highlight how the product relates to society and what philosophy it is built upon (e.g., “This shampoo uses low-environment-impact ingredients and is sourced from fair-trade suppliers”), emphasising empathy with the purpose.

In conventional branding, brand identity (logo, colours, slogans, etc.) or advertising expression make up the core of brand building. In purpose-branding, the company’s culture, everyday behaviour, and practices are the brand. That is, instead of “how we look,” the question becomes “how we act” — and that is what builds brand trust.

For example, a company that claims to protect the environment must actually implement paperless operations or energy-reduction inside the organisation; otherwise the purpose-branding fails. The key is to show and speak through action, not only through words.

Benefits That Purpose Brings to a Company

By formulating a purpose, a company can expect the following benefits:

1. Improved brand loyalty through social empathy

By generating empathy, the company is less likely to be pulled into price competition.

2. Attraction and retention of talented personnel

Especially for Gen Z and α-Generation, the tendency to seek “meaningful work” is strong; therefore, company purpose has a major influence on recruitment activities.

3. Stable long-term earnings

According to the Harvard Business Review, companies driven by purpose achieve more than 3% higher annual stock returns compared with competitors.

What is Being Asked of Companies in the Current Era?

From recognising the benefits of purpose formulation and the importance of declaring the company’s existence value (purpose) both inside and outside the company, we see how much today’s society is rooted in meaning. What companies must ask themselves now is: “Is our company really needed by society?” For employees: “Why do we exist? Why are we in this company?”

Answering this “Why?” is the foundation for building a brand that earns consumer empathy. Furthermore, for consumers to cultivate empathy toward a brand, the company’s purpose and business direction must align. In other words: words must match actions. Above all, honesty is essential, even if the results are inconvenient.

Also, empathy toward a company is related to the partner-like view of employees (who are the company’s closest stakeholders). It is therefore vitally important to consider measures from both employee and customer perspectives.

The Process of Purpose-Branding

The first step is to formulate the purpose — in a company, this means reviewing: Why do we exist? Why are we here?

パーパスを策定するにあたり用いられる基本の型は以下の通りです。

自分たちが考える自社の強みだけでなく、社外のステークホルダーから評価される客観的な強みを改めて明確にすることです。そして自社の強みが、どういった社会課題にどういった貢献をし、またステークホルダーから共感を得られるのか？を突き詰めて検討することが必要です。パーパスを策定する上で重要なポイントは、経営陣だけでなく、どのステークホルダーにとって納得できるものであることです。時に、自社が築き上げてきた歴史をさかのぼることも必要となります。

パーパス・ブランディングのプロセスは以下の４ステップです。パーパスの策定なしでは前に進めないので、ステップ１が最も重要です。

Step 1: Formulate Purpose

・Inner reflection & dialogue by top management
・Workshops with internal and external stakeholders
・Re-discovering history/founding origin

Step 2: Integrate into Brand Strategy

・Incorporate purpose into the value system of the brand
・Review tone & manner

Step 3: Spread Internally

・Employee education and programs to deepen understanding of the mission
・Reflect purpose in code of conduct and performance evaluation

Step 4: Communicate to Customers & Society

・PR and publicity based on purpose
・Sustainability reports and integrated reports

Important Points to Make the Formulated Purpose Work

Even after creating the purpose, just formulation is not enough — it is like standing still at the start line. Here are the key points to make it permeate and function:

・Consistency with actual practice is crucial

If actions or business do not match the purpose, there is a risk of “purpose-wash” (a variant of green-wash).

・Coherence and continuity

It must be a long-term attitude rather than a one-off campaign. Since it takes time for purpose to penetrate and function.

・Integration with corporate culture

Every employee must see the purpose as their own, and it must become a daily decision-making criterion. For internal penetration, measures from internal branding are also useful.

Here too, “walking the talk,” “consistency,” “duration,” and “cultivating culture and worldview” are key. Reviewing and embodying your company’s existence value (purpose) in your brand — that is what will become your company’s “weapon” in the era ahead.

Purpose Branding is not just a passing trend — it is becoming a core idea in brand strategy for the future. A company’s purpose serves as its North Star. When that star shines clearly, everyone — employees, partners, and stakeholders — can move in the same direction.
In an era where profit and social value must go hand in hand, purpose branding becomes the true source of growth and trust for companies.

Before defining your purpose, start by looking inward. Ask yourselves the following questions:

・What is our reason for being?
・Why is our company needed by society?
・What is the true purpose of our business?
・How can we contribute more meaningfully to the world?

Reference:
・Harvard Business Review – Companies that prioritize purpose outperform competitors in long-term shareholder returns.